Hotels and Travel, Tourism and Leisure Businesses 18 the Accor Share 78 Services 19 KEY FIGURES Corporate Directory

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annual report

2004 December 26, 2004

The unprecedented tsunami that struck South Asia on December 26, 2004 was one of the most destructive in history, leaving more than 300,000 casualties in its wake. Based on what we know today*, 164 guests and 54 employees at the Sofitel Khao Lak in Thailand are either dead or missing.

This is the worst tragedy that Accor has ever experienced.

The victims’ families have suffered immensely, and Accor will continue to assist them in every way possible. The entire Group would once again like to express to them its deep sympathy and sorrow.

*April 15, 2005. CORPORATE PROFILE STRATEGIC VISION SUSTAINABLE 2 Message from the Founding 30 Consolidating Market Share DEVELOPMENT Co-Chairmen and Accelerating Expansion 94 Customers 4 Message from the Chairman 36 Attracting and Retaining 98 Employees of the Management Board Customers 104 Suppliers 8 Management Board 48 Developing Our Human 106 The Environment 10 Supervisory Board Capital 114 Host Communities 11 Group Management 120 Social and Environmental 13 Corporate Governance BUSINESSES Indicators 17 Shareholder Structure 54 Hotels and Travel, Tourism and Leisure Businesses 18 The Accor Share 78 Services 19 KEY FIGURES Corporate Directory

2004 Accor is present in 140 countries with 168,500 employees worldwide.

Building on its Hotels business (4,000 hotels under the Sofitel, Novotel, Mercure, Suitehotel, Coralia Club, Ibis, Etap Hotel and Formule 1 brands, and in the United States, the Motel 6 and Red Roof Inn brands), Accor is today a major player in the global travel and tourism industry with its partners in the leisure segment (Club Méditerranée and the Lucien Barrière casinos) and travel agencies (Carlson Wagonlit Travel), as well as its restaurants and catering services (Lenôtre, Gemeaz Cusin, Compagnie des Wagons-Lits).

Accor is also the benchmark brand in Services for companies and public institutions, with 19 million people in 34 countries using its services every day. From its base in meal and food vouchers, the portfolio of services to the private and public sectors has been expanded to include a broad range of innovative human resources and social program management solutions that meet employee and constituent needs. Message from Paul Dubrule and Gérard Pélisson Founding Co-Chairmen

America, Africa and Europe, the rebound was less pronounced but nonetheless real, except in France where the number of foreign visitors was unchanged from 2003.

Accor also returned to growth, with most countries reporting increases in every business indicator—occupancy rates, average room rates, revenue per available room—in upscale and midscale The tsunami that devastated South Asia on December 26 is hotels as well as in the economy segment. undoubtedly the most disastrous event in Accor’s history. Many customers and employees were lost, and words are meaningless in The year’s strategic advances strengthened our positioning in all the face of such a large-scale tragedy. We would simply like to pay our businesses. Accor continued along the path that it has tribute to the victims, their families and loved ones. always followed, pursuing a strategic commitment to balanced, long-term growth. The alliance with Club Without this tragic ending, 2004 would have been remembered— Méditerranée is fully in line with this strategy. The heightened for Accor in particular and the tourism industry in general—as the awareness and extensive synergies generated by this partnership year of the turnaround that has been eagerly awaited for more than will enable Accor to respond more effectively to demand in the three years. leisure segment, which enjoys tremendous growth potential and is According to World Tourism Organization estimates, the number increasingly integrated in business tourism. The diversification of of international tourist arrivals increased by 10% in 2004 to an all- the Accor Services portfolio into the area of human resources time record of 760 million, with the sharpest increases in the Asia- management also responds to sharp growth in the needs of Pacific region, the Middle East and South America. In North companies and public institutions, especially in Europe.

WWW.ACCOR.COM 2 “The number of international tourist arrivals

increased by This heightened brand recognition and enhanced image are under- 10% in 2004 pinned by the high-quality products and services offered by Accor to an all-time and its brands, in employee training for example, as well as by the record of “Nothing is more professionalism and capacity for innovation of its teams and their important to ability to share skills with our partners. They also reflect a com- 760 million.” mitment on the part of Accor and its employees to the prin- a company’s ciples of sustainable development through an array of success than measures to protect the environment, diversify the workforce and the motivation support humanitarian actions and social programs. of its people.” We’re delighted to note that this commitment, which we were already well aware of, is now supported by performance indicators that are helping to strengthen tracking and control, and consequently the credibility of our actions.

Our confidence in Accor’s future is all the stronger in that it is shared by international investors, as demonstrated by Colony Capital’s recent decision to invest €1 billion in Accor. This operation, which will enable us to complete an investment program Our geographic expansion is being driven by programs to originally planned over five years in just three, was very favorably strengthen the network in high potential regions. In a number of received, not only by the Supervisory Board but also by employees, destinations, the growth dynamic we’ve been pursuing is already who appreciate seeing the Group obtain the resources it needs to producing results, notably in China, Russia, North Africa and the meet its goals. Middle East. We’ve also been laying foundations in other promising countries, such as Turkey, Iran, India, Mexico, Chile and Venezuela. Nothing is more important to a company’s success than the motiva- Lastly, countries like Ethiopia, Sudan and Madagascar are experi- tion of its people. This is especially true of a services company like encing fast-growing demographics and political changes that offer ours, where human resources represent the most important source interesting prospects for the future. of value. Coming from a wide range of personal and educational backgrounds, Accor’s employees, many of whom are young, need Another observation we’ve made in our travels abroad is that to be offered career opportunities that facilitate their professional awareness and perception of Accor and its brands are con- development. With regard to our growth, from a strategic and finan- tinuing to make rapid gains. This is true in economy hotels, as cial perspective, Colony Capital’s investment in Accor is an demonstrated by the resounding success of the first Ibis hotel in extremely positive development and we are pleased to welcome China and the Ibis/Novotel complex in Dubai. But we’ve also seen their representatives as members of our Supervisory Board. it in the upscale segment, where the most noteworthy example is the recent selection of Sofitel, following an international call for On behalf of the Board, we would like to warmly congratulate Jean- bids, to manage the largest, most luxurious hotel in the Middle Marc Espalioux and the Management Board, as well as their team East/Africa region—the Zam Zam Sofitel Grand Suites in Mecca, members, for effectively guiding Accor through three difficult years Saudi Arabia. and preparing it in 2004 for a promising future.

WWW.ACCOR.COM 3 Message from Jean-Marc Espalioux Chairman of the Management Board

Our Services business enjoyed another year of sustained growth, thanks to firm market demand and the creativity of its teams. Our program to reduce corporate overheads also produced A NEW DYNAMIC results. Although we reported a decline in net income, this was due to a non-recurring impairment loss on the Compass shares we still own. In addition, we improved our balance sheet. Overall, this new start, which we hope to build upon in 2005, is our main reason for For all of us at Accor, 2004 will forever be remembered satisfaction. as the year of the terrible tragedy that struck South Asia, and particularly Khao Lak. Our thoughts go out to our guests During the year, we pursued our strategy of balanced, long-term and colleagues lost in the disaster. On behalf of everyone in our growth without taking excessive risks in order to gradually reverse organization, we would like to pay tribute to the victims and express the effects of the past three difficult years for the global tourism industry. We opened 188 new hotels—one every two days—and our heart-felt sadness to their families, who have suffered so much. increased renovation capex by 15%, with such programs as Thanks to our efforts over the past three years, 2004 saw the first Novotel’s Novation room, Sofitel’s MyBed and the new Red Roof signs of an upturn in our earnings. Profit before tax rose by more Inn room. Another example of our assertive development was the than 13% during the year, at the upper end of the range forecast opening in January of the first Ibis in China, located in Tianjin, when interim results were released in September following an Beijing’s seaport. Like other global hotel chains, we previously especially disappointing summer in several European countries. operated only luxury or upscale properties in the country, so the This performance reflects a recovery in the worldwide hotel Tianjin opening represented a bet—a winning bet with a big payoff, industry that is gradually spreading across Europe. as it turns out, since the hotel’s occupancy rate rose very quickly to

WWW.ACCOR.COM 4 “We extended Accor’s scope by pursuing “During the year, a number we pursued of strategic our strategy opportunities.” increase revenues and reduce costs. Both companies’ customers of balanced, are delighted with the alliance. In this same leisure segment, we played a key role in the creation of the new Groupe Lucien long-term growth Barrière, a European leader in casinos, in which we own a 34% without taking stake. We are also closely involved in the new company’s strategic excessive risks.” decisions and management. In the travel agency business, Carlson Wagonlit Travel, in which we hold a 50% stake, strengthened its global number-two ranking through targeted acquisitions in the United States and France.

Our strategic focus on profitable growth has two foundations. Building on our hotels business and highly regarded brands with our partners in the leisure industry (Club Méditerranée and Lucien Barrière), restaurants (Lenôtre, Compagnie des Wagons-Lits and Gemeaz Cusin in Italy) and travel agencies (Carlson Wagonlit Travel), we are building a major player in travel and tourism. Already the world’s largest industry, the travel and tourism sector also benefits from fundamentals that point to growth in both developed and emerging markets. From our base in meal and food 95% and has remained at that remarkable level ever since. We’ve vouchers, in which we pioneered and have maintained our lead, decided to launch a major Ibis expansion program in China. In our we’ve developed innovative human resources management other core business, we enhanced the Services portfolio with a support services in the areas of wellness, incentives and pro- number of targeted acquisitions, notably Capital Incentives, the ductivity that have established Accor as the benchmark in services UK’s leading issuer of gift vouchers, giving us a foothold in for companies and public institutions. These two strategic busi- Europe’s largest incentive products market. nesses, both firmly rooted in Accor’s past, offer a wealth of strategic fits and growth drivers for the future. We extended Accor’s scope by pursuing a number of strategic opportunities. With the support of Caisse des Dépôts et From a financial viewpoint, two transactions announced simulta- Consignations, we became Club Méditerranée’s leading industry neously in March 2005 have confirmed our strategic vision and shareholder by acquiring a 29% stake in the company. As part of demonstrated investor confidence in Accor, as we reach what is this transaction, Caisse des Dépôts et Consignations became our very probably a turning point following three difficult years. largest long-term shareholder and increased its number of seats A consortium of leading financial partners has acquired 128 of our on the Supervisory Board. hotel properties in France for €1 billion. This transaction enables us The close fit between Accor and Club Méditerranée teams has to capitalize on our expertise, our reputation, and the spectacular enabled us to very quickly identify mutually beneficial synergies to rise in property prices, without creating any operating constraints

WWW.ACCOR.COM 5 MESSAGE FROM JEAN-MARC ESPALIOUX

since the hotels will be leased back under very favorable terms and Our improved results, ongoing expansion, strategic advances and extremely long contracts. This new approach to real estate support from leading investors are all encouraging signs that coin- management is, in a way, a world first, since we are transforming cide with the launch of our corporate project and signify a new fixed-rent leases, which cannot be adjusted to fluctuations in the dynamic. Following our “Accor 2000, Succeeding Together” proj- economy, into variable-rent leases based on a percentage of ect, which enabled us to make a “technological leap forward,” the revenues with no guaranteed minimum. new project focuses on our business fundamentals. It will help us to create new products and services for increasingly selective, Even more noteworthy, a renowned US international invest- demanding clients with constantly changing needs, such as the ment fund, Colony Capital, has invested €1 billion in Accor. Suitehotel chain and the Bien-Être à la Carte services offer, both of A long-time partner, Colony Capital was involved in Accor Casinos which have recently proven to be highly successful. Together, we and, more recently, in the new Groupe Lucien Barrière. The investment, which consists of redeemable and convertible bonds, provides us with substantial resources to speed our development and successfully complete our corporate project. In the words of a Colony Capital spokesperson, it represents a vote of confidence for Accor’s management team and strategic vision, which will make us more attractive to financial decision-makers. In addition, we will benefit from our partner’s expertise in real estate and hotel assets management, especially in Asia and the United States.

Thanks to these developments, we now enjoy the flexibility to step up the pace of growth, while improving our financial position. This will enable us to complete projects in three “We now enjoy years that would otherwise have taken five. The focus will be on developing our economy hotel business in Europe and on expand- the flexibility ing in such emerging markets as China, India, Russia, Latin America to step up the and the Middle East, as well as in the high-potential markets for pace of growth, human resources management and people care services. while improving Reflecting this new growth momentum and confirmed business turnaround, we are asking shareholders to approve the payment of our financial an ordinary dividend of €1.05, the same as last year, as well as an position.” exceptional dividend of €0.25, for a total payout of €1.30. “A renowned US international investment fund, Colony Capital, has invested €1 billion in Accor.”

WWW.ACCOR.COM 6 will develop local management, which, while driving business per- I would also like to thank our employees for their efforts that have formance, respects cultural diversity and encourages individual ini- enabled us to revitalize our forward momentum, as well as my col- tiatives. We will also seek to more fully share our vision and our leagues on the Management Board for their exceptional unity and motivation with shareholders and financial partners. Our “Accor, A commitment. New Dynamic” project will also be an opportunity to deepen the As always, we’ve set ambitious goals that reflect both our past involvement of the Group and its employees in supporting sus- achievements and our future potential. So, while 2004 was the year tainable development initiatives and our core values. of the turnaround, 2005 will represent a major step forward in I would like to warmly thank our Founding Co-Chairmen, Paul our successful development, for the benefit of our customers, Dubrule and Gérard Pélisson, whose support is so invaluable. As employees and shareholders. Accor’s leading “ambassadors to the world,” they’ve played a crucial role in our breakthroughs in China and the Middle East.

(from left to right)

André Martinez Member of the Management Board

Benjamin Cohen Executive Vice-Chairman of the Management Board

Jean-Marc Espalioux Chairman of the Management Board

John Du Monceau Senior Vice-Chairman of the Management Board

WWW.ACCOR.COM 7 Management

FOUNDING CO-CHAIRMEN Board

Paul Dubrule Gérard Pélisson Jean-Marc Espalioux Chairman

Born on July 6, 1934 in Born on February 9, Born on March 18, 1952. Tourcoing (France). 1932 in Lyon (France). Law and Economics Graduate of the Institut Engineering degree from degree from Institut des Hautes Études the École Centrale des d’Études Politiques de Commerciales, University Arts et Manufactures, Paris and graduate of of Geneva. Co-Founder Paris, and Master of France’s École Nationale and Co-Chairman of the Science in Industrial d’Administration, Paris Novotel chain in 1963 Management, (1978). Inspecteur des with Gérard Pélisson, Massachusetts Institute Finances at the French Co-Chairman and Chief of Technology (USA). Ministry of Finance from Executive Officer of Co-Founder and Co- 1978 to 1982. Joined the Novotel S.I.E.H. Chairman of the Novotel Compagnie Générale des Group (1971-1983). chain in 1963 with Paul Eaux (now Vivendi Co-Founder and Dubrule, Co-Chairman Universal) in 1984, where Co-Chairman of the of the Novotel S.I.E.H. he served as Chief Accor Group (1983- Group (1971-1983). Financial Officer (1987), 1997). Paul Dubrule has Co-Founder and Co- Member of the Executive also been Chairman of Chairman of the Accor Committee (1994) and Entreprise et Progrès Group (1983-1997). Executive Vice-President since 1997 and is Gérard Pélisson is also (1996). Director of Accor Co-Founder of the World Chairman of the Council since 1988, chosen by Travel and Tourism on French Investment in the Co-Founders, Paul Council (WTTC). In Africa (CIAN), Chairman Dubrule and Gérard 2002, the Paul Dubrule of the Union of French Pélisson, to become the Chair in Sustainable Citizens Abroad (UFE), Chairman of the Development was Chairman of the Paul Management Board created at INSEAD, the Bocuse Institute, Co- on January 7, 1997. international business Founder and Vice- Jean-Marc Espalioux is school. Paul Dubrule Chairman of the World also Director and member also personally opened Travel and Tourism of the Accounts, a hotel school at Siem Council (WTTC) and Audit and Commitments Reap, in Cambodia. President of the École Committee of Veolia He is Chairman of Supérieure de Commerce Environnement, Director Maison de la France. of Lyon (1990-1996). and Chairman of At the Annual Meeting Gérard Pélisson is the Compensation on May 3, 2005, Chairman of the Accor Committee of Air France- shareholders will be Supervisory Board. KLM, member of the invited to elect Paul Supervisory Board and Dubrule as a member of Chairman of the Strategy the Supervisory Board. Committee of Club Méditerranée, representative of Accor on the Supervisory Board of Groupe Lucien Barrière SAS and non-voting member of the Supervisory Board of Caisse Nationale des Caisses d’Épargne.

WWW.ACCOR.COM 8 Benjamin Cohen John Du Monceau André Martinez Jacques Stern Executive Vice-Chairman Senior Vice-Chairman Member of the Member of the Management Board Management Board

Born on April 29, 1939 Born on April 6, 1938 in Born on January 10, Born on September 19, in Castres (France). Belgium. Degree in 1953. Graduate of the 1964. A certified public Graduate of the École Commercial and Maritime École des Hautes Études accountant and graduate of des Hautes Études Sciences, (Antwerp, Commerciales (1975), the École Supérieure de Commerciales (1961). Belgium). Joined Unilever Institut d’Études Commerce de Lille. Began Joined Jacques Borel (1961), holding various politiques de Paris his career with Price International (1964), positions in food product (1977), Masters in Waterhouse as an external appointed Vice-President, marketing, then joined Economics from the auditor. Joined Accor in Public Restaurants Jacques Borel Assas Paris II Faculty of 1992 as Consolidation (1968), Member of the International (1973) and Law (1977). Joined Officer and became Group Management Committee became Managing Airbus Industries in 1979 Financial Planning Officer and Chief Executive Director of Ticket before moving to Société in 1996. Appointed Group Officer (1975), Vice- Restaurant France (1978- des Hôtels Méridien, Controller (2000), Chairman and Chief 1983). At Accor, since where he became Chief Executive Deputy Chief Executive Officer (1975). 1983 he has served as Executive Officer (1989- Financial Officer (2002), Chairman and Chief Managing Director, 1995). Since joining then Chief Financial Officer Executive Officer of Service Vouchers and Accor in 1997, Chief (2003). On a motion by Sofitel (1977) and Union Group Executive Vice- Executive Officer of Jean-Marc Espalioux, the Touristique et Hôtelière President, Service Compagnie des Wagons- Supervisory Board (UTH) (1979). He was Vouchers and Eurest. Lits (1997-2002), Group appointed him Member of appointed Executive John Du Monceau has Executive Vice-President, the Management Board Vice-President, Hotels been a Member of the Hotel Development and since March 8, 2005. and Member of the Management Board since Strategy (1999-2001), Management Committee January 7, 1997 and Chief Executive Officer of Accor (1983), Senior Vice-Chairman of Economy Hotels (2002). Chairman of Croisières the Management Board Member of the Paquet (1987) and Accor in charge of Services, Management Board in Group Executive Vice- Human Resources, charge of hotel President (1989). Sustainable Development operations in Europe, Member of the Accor and Compagnie des Africa and the Middle Management Board since Wagons-Lits since East since January 3, 1997 and Executive January 3, 2003. 2003. Vice-Chairman of the Management Board since 2003, Benjamin Cohen is also Chairman of the Brazil Committee of MEDEF International, Co-Chairman of the Board of Directors of Carlson Wagonlit Travel and Vice-Chairman of the Supervisory Board of Groupe Lucien Barrière SAS.

WWW.ACCOR.COM 9 Supervisory Board

Gérard Pélisson, Sébastien Bazin**, Dominique Marcel**, Jérôme Seydoux*, Chairman Principal Managing Director Vice-President, Finance and Chairman and Member of the Europe and Chief Executive Strategy, and member of the Supervisory Board of Pathé Étienne Davignon*, Officer Europe of Colony Executive Committee of Caisse SAS. Jérôme Seydoux is also Vice-Chairman. Capital SAS, the company’s des Dépôts et Consignations. Director of Danone and Vice- Étienne Davignon is also European subsidiary. Sébastien Dominique Marcel is also Chairman, Chief Executive Vice-Chairman of Suez and Bazin is also Director of Lucia member of the Supervisory Officer and Director of Chairman of Fortis. and member of the Supervisory Board and Audit Committee of Chargeurs SA. BNP-Paribas, Board of Groupe Lucien Caisse Nationale des Caisses Barrière SAS. d’Épargne and member of the Maurice Simond*, Represented by Baudouin Prot, Former Group Director Director and Chief Operating Supervisory Board of Crédit Isabelle Bouillot*, Foncier. of IBM Europe. Officer. Baudouin Prot is Director of Saint-Gobain and also Director of Veolia La Poste. Francis Mayer, Société Générale, Environnement and member Chief Executive Officer of Represented by Philippe of the Supervisory Board of Paul Dubrule**, Caisse des Dépôts et Citerne, Director and Chief Pinault-Printemps-Redoute. Founding Co-Chairman of Consignations. Francis Mayer Operating Officer. Philippe Accor, Chairman of Entreprise Citerne is also Director of Thomas J. Barrack**, is also Vice-Chairman of the et Progrès, and Chairman of Supervisory Board of Caisse Unicredito Italiano and Crédit Founder, Chairman and Chief Maison de la France. du Nord. Executive Officer of Colony Nationale des Caisses Capital LLC and formerly Chief Renaud d’Élissagaray*, d’Épargne, and Director of Casino Guichard-Perrachon, Executive Officer of Robert M. Former member of the Secretary of the Bass Group. Thomas J. Management Board of Banque Dexia and Veolia Environnement. Management Board Barrack is also Director of Louis Dreyfus and Director of and the Supervisory Board Continental Airlines and First Arca-Banque du Pays Basque Franck Riboud*, Pierre Todorov. Republic Bank. and various mutual funds. Chairman and Chief Executive Gabriele Galateri di Officer, of the Danone Group Genola*, and Chairman of the Chairman of Mediobanca SpA Appointments and Gabriele Galateri di Genola Compensation Committee. is also Vice-Chairman of Franck Riboud is also Director Assicurazioni Generali SpA, of Renault and L’Oréal, and and Director of IFI SpA, member of the Supervisory Commerzbank and Pirelli Board of Eurazeo. & C. SpA.

*Independent members. The Supervisory Board’s bylaws state that a majority of members must be independent, defined as persons who have no relations with the Group or its senior executives that would in any way compromise their freedom of judgment.

**To be elected by shareholders at the Annual Meeting on May 3, 2005.

WWW.ACCOR.COM 10 Group Management

MANAGEMENT BOARD CORPORATE FUNCTIONS HOTELS

Jean-Marc Espalioux Cathy Kopp Firmin António Chairman of the Management Human Resources Accor Brazil and Hotel Board Hervé Bertrand Operations in South America Benjamin Cohen Accor Academy Executive Vice-Chairman of the Gérald Ferrier David Baffsky Management Board, in charge Labor Relations Accor Asia-Pacific of Finance and Hotel Development, Leisure and Jacques Stern Roberto Cusin Tourism, Casinos, Brazil and Corporate Finance Accor Italy Hotel Operations in South America. Jean-Michel Barbier Tax Affairs Christian Karaoglanian John Du Monceau Christian Gary Development Senior Vice-Chairman of the Treasury and Finance Management Board, in charge Jean Luchet of Services, Human Resources, Georges Le Mener Real Estate Financing Sustainable Development, and Accor North America Compagnie des Wagons-Lits. Éliane Rouyer Investor Relations and Serge Ragozin André Martinez Financial Communication Technologies, Reservations, Member of the Management Sophie Stabile Board, in charge of Hotel Marketing, Partnerships, Consolidation and Purchasing and Technical Operations in Europe, Africa Information Systems and the Middle East. Affairs Marc Vieilledent Patrick Bonnetain Jacques Stern Corporate Finance Construction and Hotel Member of the Management Assets Board, in charge of Finance Pierre Todorov Gilles Bonnin (as of March 8, 2005) General Secretary Information Technologies and Catherine Bertini Telecommunications Corporate Legal Services Jean-Louis Dubrule Catherine Levy Key Accounts and Strategic Legal Affairs Partnerships Dominique Esnault Internet, Customer Relations Jacques Charbit and Loyalty Programs Communications and External Relations Joël Vatan Purchasing

René-Georges Querry Safety and Risk Prevention

Hélène Roques Sustainable Development

WWW.ACCOR.COM 11 Group Management

HOTELS EUROPE, OPERATIONS SERVICES AFRICA AND AMERICAS, ASIA THE MIDDLE EAST AND AUSTRALIA

Christian Achard Robert Bardoux Novotel and Mercure France Roland de Bonadona Northern and Hotels South America Central Europe Agnès Bourguignon Sofitel France Oswaldo Melantonio Philippe Bertinchamps Services Brazil Accentiv’ Évelyne Chabrot Human Resources Michael Issenberg Thierry Gaches Hotels Asia-Pacific Marketing and Development Jean-Louis Claveau Hotels Benelux, Jim Amorosia Jean-Marc Loustalet Spain & Portugal Motel 6, Studio 6 Northern and Hispanic America Bruno Coudry Carol Kirby Formule 1, Etap Hotel France Marketing Yves Picchi Accor Lodging North America Information Systems Marie-Laure Deligarde Legal Affairs David O’Shaughnessy Olivier de Surville Sofitel and Finance, Administration Olivier Devys Novotel North America and Human Resources Suitehotel Joe Wheeling Laurent Thérézien Michael Flaxman Red Roof Inn Northern Europe Hotels Northern, Central and Asia-Pacific and Eastern Europe Christophe Guillemot Finance LEISURE OTHER Gilles Larrivé AND TOURISM BUSINESSES Formule 1, Etap Hotel France

Jean-Luc Motot Jacques Barré Hubert Joly Hotels Africa and Middle East Finance Carlson Wagonlit Travel Jean-Paul Philippon Ferhan Gorgün Philippe Hamon Ibis France Operations Compagnie des Wagons-Lits Marco Pimentel Carlos Da Silva Patrick Scicard Hotel Marketing Go Voyages Lenôtre Denys Sappey Fabrice Mauny Hotel Sales Operations Europe & French Olivier Weill Overseas Possessions Projects, Communication and Franchises André Witschi Hotels Germany

WWW.ACCOR.COM 12 This segregation of powers between the Supervisory Corporate Board and the Management Governance Board guarantees effective, ongoing supervision of the Company’s business activities. Accor is a limited liability company governed by a Management Board and Supervisory Board. This structure, chosen by many French companies, complies fully with the principles of good corporate governance as currently defined in French legislation. It encourages a clear separation between the financial and strategic management functions, which are handled by the Management Board, and oversight and control functions, which are the responsibility of the Supervisory Board, acting on behalf of shareholders. This segregation of powers provides shareholders with the assurance that their interests are protected, by guaranteeing transparency and effective, ongoing supervision of the Company’s business activities. In practice, the Supervisory Board and the Management Board interact on a regular, ongoing basis in a mutual commitment to good governance practices. The composition of the Supervisory Board helps to ensure that the The respective roles and responsibilities of the Supervisory Board Board is objective and exercises effective control over the running and the Management Board are set out in the bylaws and two for- of the Company. Seven of its eleven members are independent, as mal rules. These rules define the composition and terms of refer- defined in the Board’s bylaws, that is, directors with no ties to the ence of each board, the procedures to be followed at their Group or its management that would be likely to influence their respective meetings and their rights to information. They also set judgment. The definition of “independence” applicable to out the rights and obligations of members, dealing with such issues Supervisory Board members takes into account the criteria that are as conflicts of interest, confidentiality, personal shareholdings, com- set out in the AFEP-MEDEF report on corporate governance of pliance with stock exchange guidelines concerning transactions in listed companies and have been adapted to the Company’s dual Accor shares, the obligation of diligence and the limit on the number governance structure. of directorships in other companies. According to the bylaws, mem- Based on this definition, members of the Supervisory Board who are bers of the Supervisory Board must hold at least 500 Accor shares. in any of the following situations are not considered as independent:

WWW.ACCOR.COM 13 CORPORATE GOVERNANCE

The membership • Members who have—or have had at any time in the five years and procedures preceding their election to the Supervisory Board—an employment of the specialized contract with the Company or any other Group entity. • Members who have personal ties with the Company or any other committees submitted to Group entity in the form of a business contract. ensure that topics the Supervisory • Members who have any ties whatever with a significant and regular Board have been business or financial partner of the Company or any other Group entity. thoroughly • Members who have any close family ties with the Chairman or prepared. other member of the Management Board. • Members who have worked on the audit of the accounts of the Company or any other Group entity in any of the five years preceding their election to the Supervisory Board. • Members who control the Company’s capital, alone or in concert with other shareholders, or who represent any such shareholders. • Members who are a Chairman, Chief Executive Officer, Chairman or member of the Management Board of a listed subsidiary or of SUPERVISORY BOARD MEETINGS PREPARED any affiliated company not controlled by the Group. BY TWO SPECIALIZED COMMITTEES • Members who are a Chairman, Chief Executive Officer, Chairman In line with the principles of good corporate governance, Accor has or member of the Management Board of a non-Group company of formed two specialized standing committees of the Supervisory which the Company is a director or member of the Supervisory Board, whose activities are governed by specific charters and the Board or of which the Chairman or any member of the Management Board’s bylaws: Board is a director or member of the Supervisory Board. • The Compensation and Nominations Committee, which met Based on the above criteria, the following seven members of the once in 2004, is comprised of three members: Supervisory Board Supervisory Board are deemed to be independent: Isabelle Chairman Gérard Pélisson and two independent members, Étienne Bouillot, Étienne Davignon, Renaud d’Elissagaray, Gabriele Galateri Davignon and Jérôme Seydoux, who is the Committee’s Chairman. di Genola, Franck Riboud, Jérôme Seydoux and Maurice Simond. The Committee prepares the Supervisory Board agenda regarding the appointment of the Chairman and members of the Management Board, candidates for election to the Supervisory Board, the compensation to be paid to the Chairman of the Supervisory Board and the Chairman and members of the Management Board, and the Group’s executive stock options policy. In 2004, it reviewed the terms of the January 7, 2004 stock option plan.

WWW.ACCOR.COM 14 • The Audit Committee comprises four members, including the MANAGEMENT Chairman of the Supervisory Board, Gérard Pélisson, and three COMPENSATION POLICY independent members, Étienne Davignon, who serves as Committee Accor’s management compensation policy complies with good Chairman, Isabelle Bouillot and Renaud d’Elissagaray. The Audit corporate governance practices. Committee met three times in 2004, in each case at least two days Compensation paid to the Chairman and members of the before the corresponding Supervisory Board meetings. It ensures that Management Board is determined by the Supervisory Board based accounting policies are appropriate and applied consistently, and on the recommendations of the Compensation and Nominations verifies that financial disclosures are complete and accurate. To this Committee, as formulated after reviewing the results of a survey of end, the Committee assesses the quality of the external auditors’ compensation practices among major French and European work and the level of their fees. It also reviews internal control companies, performed by an independent consulting firm. procedures, which are based on the principles laid down in the This compensation comprises a fixed portion, set annually, and a Group’s Internal Audit Charter. variable portion, also set annually, based on the recommendations of the Compensation and Nominations Committee. For the Chairman In 2004, the Audit Committee prepared the Supervisory Board’s of the Management Board, the variable portion depends on profit review of the annual and interim financial statements approved by the before tax and net income performance, judged in the prevailing Management Board, and devoted one meeting to reviewing the business environment and taking into account the effectiveness of internal control system, including the methods used to identify risks. measures introduced during the year. For the other members of the In addition to Audit Committee members, meetings are also attended Management Board, the amount of the variable portion depends by the Chairman and Vice-Chairman of the Management Board, the on Accor’s financial performance, judged according to the same Chief Financial Officer, who acts as Committee secretary, the external criteria, and on the achievement of personal objectives set by the auditors and, where necessary, the internal auditors. Chairman of the Management Board. The variable portion may not exceed 80% of the individual’s fixed compensation and the total variable compensation is capped at an amount equal to 120% of the individual’s fixed compensation. Attendance fees are allocated among the members of the Supervisory Board on the following basis: the legitimate • Members of each of the two specialized committees receive a demands of fixed amount for serving on these committees. Accor’s corporate shareholders and • Of the balance, 50% is shared equally among all the members of the Supervisory Board and 50% is allocated prorata to each governance society for member’s attendance record at Board meetings. complies fully transparency. Total compensation paid to Accor SA corporate officers is indicated with the on page 129 of the Reference Document. recommendations of the Viénot and Bouton reports and responds to

WWW.ACCOR.COM 15 CORPORATE GOVERNANCE

A RIGOROUS INTERNAL CONTROL PROCESS In addition to the Audit Committee, the Group Internal Control Internal control is a process implemented to provide reasonable Committee, the Risk Prevention Committee, the Investments assurance that the following objectives are fulfilled: Committee, the main entities of the Group Finance Department, • Execution and optimization of transactions. the Group Internal Audit and its local departments are also involved • Production of reliable financial information. in managing the internal control process. • Compliance with the applicable laws and regulations. In accordance with the provisions of the Commercial Code, internal One of the aims of the internal control system is to anticipate and control procedures are described in the report of the Chairman of control the risks arising in the course of the Company’s business, the Supervisory Board contained in the Reference Document. as well as the risk of errors or fraud, particularly relating to accounting Accor’s corporate governance complies in large part with the and other financial matters. However, no control system can provide recommendations of the Viénot and Bouton reports and responds absolute assurance that these risks have been completely eliminated. to the legitimate demands of shareholders and society for transparency.

3 QUESTIONS FOR PIERRE TODOROV SECRETARY OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD

How is the Supervisory Board kept informed of the Between meetings, Supervisory Board members are regularly Company’s operations? informed of events and operations that have particular Every quarter, the Management Board presents a detailed importance for the Company. They receive all Accor press business report intended to help the Supervisory Board fulfill releases as well as special messages issued by the Chairman its responsibilities. Based on an analysis of complete, accurate of the Management Board, as warranted by circumstances. information, the Supervisory Board authorizes major capital How many times did the Supervisory Board meet in spending projects and strategic transactions. It also authorizes 2004? any decision that may impact the Company’s capital, notably Six times, with each meeting lasting an average of two and a the issue of stock option plans as stipulated in shareholder- half hours. approved authorizations granted to the Management Board. In addition to allowing the Board to carry out its responsibilities Do members attend regularly? as required by French law and Company bylaws, meetings also Attendance averaged 80%. To emphasize the importance of provide an opportunity for the Chairman and members their participation, 50% of total attendance fees are allocated of the Management Board, and sometimes senior executives, prorata to each member’s attendance record. to report on major projects and developments concerning the Company’s business.

WWW.ACCOR.COM 16 Shareholder Accor’s shareholder base includes a Structure large number of non-French investors, who own a majority of outstanding shares. The free float represents 85.6% of outstanding shares, held by institutions and individual investors, including employees. NUMBER OF SHAREHOLDERS (ACCOR ESTIMATE SINCE 2001)

205,000 180,000 170,000 160,000 155,000

INVESTOR INFORMATION (at Dec. 31, 2004)

Share capital €620,131,527 Shares outstanding 206,710,509 Voting rights outstanding 219,999,082 2000 2001 2002 2003 2004

The analysis of the shareholder structure at December 31, 2004 The 1.8-point increase in the percentage held by members of the is based on holders of registered shares and identifiable holders Supervisory Board resulted from Caisse des Dépôts et of bearer shares, as identified by a Euroclear survey of financial Consignations’ increased shareholding when Accor acquired an institutions holding at least 200,000 shares and investors holding equity stake in Club Méditerranée. Caisse des Dépôts et more than 250 shares. The total number of shareholders is Consignations took up 96.4% of the redeemable bonds estimated on the basis of changes in the typology of the (ORANE) issued to finance the acquisition, which led to the shareholder base. creation of nearly seven million new shares. The percentage of shares held by French investors rose by 1.4 points, while the percentage of shares held by international institutions declined by 2.6 points. Among international institutions, US and British investors ranked first and second.

EMPLOYEE SHAREHOLDERS SHAREHOLDER STRUCTURE AT DECEMBER 31, 2004 23,660 employees hold a combined 1.73% stake in Accor, including 0.92% 51.3% International institutional investors through the employee savings plan. Of which: United States 25.0% Netherlands 1.2% United Kingdom 10.0% Japan 0.9% CAISSE DES DÉPÔTS ET Switzerland 3.4% Canada 0.9% CONSIGNATIONS, ACCOR’S Germany 1.6% Other countries 8.3% LARGEST LONG-TERM SHAREHOLDER Following Accor’s acquisition of an 22.7% French institutional investors equity interest in Club Méditerranée, (of which mutual funds represent 14%) Caisse des Dépôts et Consignations now holds 7.6% of Accor shares and has increased its number of seats on 14.4% Supervisory Board and Management Board the Supervisory Board. Caisse des Caisse des Dépôts BNP-Paribas 0.6% Dépôts et Consignations is Accor’s 11.6% Individual investors et Consignations 7.6% Other 0.3% largest long-term shareholder. Co-Founders 3.5% Held in treasury 0.7% Société Générale 1.7%

WWW.ACCOR.COM/FINANCE 17 The Accor Share Following a lackluster performance in 2004, the Accor share rose considerably in early 2005, as the market took note of encouraging signs of a business upturn and the Group’s renewed growth dynamic.

THE ACCOR SHARE IN 2004 2004 EV/EBITDA: ACCOR UNDERVALUED COMPARED TO ITS COMPETITORS Source: JCF Quant, ACCOR –10.4% Adjusted CAC 40/Accor share price CAC 40 +7.4% Source: JCF Quant

Early 2005 (Closed at €38 on March 29) 18 ACCOR +18.0% Marriott 17.0x CAC 40 +6.7% Starwood 14.8 x 42 16 Host Marriott 14.0 x Hilton Corp. 12.8 x 40 14 ACCOR 8.1 x

38 12

36 10

34 8

6 32 2000 2001 2002 2003 2004

30 J F M A M J J A S O N D J F M Hilton Group 9.7x 2004 2005 13 NH Hoteles 9.4x Intercontinental 9.1x 12 ACCOR 8.1x SHARE PERFORMANCE CAC 40 7.3 x 11

IN € 2000 2000 2001 2002 2003 2004 10

Accor Year-end closing 45.00 40.83 28.86 35.90 32.21 9 High for the year 51.00 52.40 49.00 37.43 37.36 8 Low for the year 35.39 25.72 26.75 25.01 30.37 7 % change for the year –6% –9% –29% +24% –10% 6

Market value (€ billions) 8.9 8.1 5.8 7.2 6.7 5 2000 2001 2002 2003 2004 Net yield (1) 2.2% 2.6% 3.6% 2.9% 3.3%(2) EV = Enterprise value (market value + net debt). CAC 40 % change for the year –0.5% –22% –34% +16% +7% EBITDA (Earnings before interest, taxes, depreciation and amortization) (1) Based on year-end closing. (2) 3.3% on the ordinary dividend, presented for shareholder approval at the Annual = revenues – operating expense – rental expense). Meeting on May 3, 2005; 4% including the exceptional dividend of €0.25.

SHARE DATA Registered shares held by Included in the following indexes Société Générale CAC 40, Euronext 100, FTSEurofirst 100, Listed on 32, rue du Champ-de-Tir – BP 81236 FTSEurofirst 80, DJ Stoxx Large, Euronext Paris SA — Eurolist 44312 Nantes Cedex 03, France DJ EuroStoxx Large, Bloomberg Compartment A Tel: +33 (0) 2 51 85 67 89 European 500, S&P Europe 350, ISIN code www.nominet.socgen.com S&P Global 1200, MSCI World FR0000120404 ADR Accor Included in the following Initial public offering ACRFY code sustainability indexes July 19, 1983 CUSIP 00435 F 101 ASPI, FTSE 4 Good, (Merger of JBI and Novotel SIEH) The Bank of New York DJSI World & DJSI Stoxx, ESI www.bankofny.com

WWW.ACCOR.COM/FINANCE 18 Complete financial data can be found in the 2004 Reference Document filed with France’s securities regulator (AMF). The document is available on request by phone at +33 (0) 1 45 38 86 94 or Key by e-mail at [email protected]. It can also be downloaded from Figures www.accor.com/finance

Revenues: €7,123 million Profit before tax: €592 million Net income, Group share: €239 million Earnings per share: €1.20

Dividend*: €1.30 KEY FIGURES

(including an exceptional dividend of €0.25) q *Pending approval by shareholders at the Annual Meeting on May 3, 2005. KEY FIGURES Group Despite uneven business conditions Results in its main markets, Accor returned to growth in 2004, met its announced targets (indicative of a significant turnaround) and continued to improve its balance sheet.

Consolidated revenues rose by 4.3% REVENUES as reported. On a like-for-like basis BY BUSINESS REVENUES (excluding the impact of changes in scope (IN € MILLIONS) of consolidation and exchange rates), the 71% Hotels € Up 4.3% increase was 4.6%, reflecting firm demand 5,036 million across the Group’s operations. Expansion 7% Services 7,007 7,290 7,139 6,828 7,123 € contributed 3% to growth while the currency 507 million effect (essentially due to the dollar’s decline 22% Other activities €1,580 million against the euro) and disposals reduced 6% Travel agencies revenue, respectively, by 2% and 1.2%. 3% Casinos 6% Restaurants 4% Onboard train services 3% Other

REVENUES BY REGION

2000 2001 2002 2003 2004 Europe North America France (excluding France) 17% 34% 35%

Latin America 6% Other countries 8%

EBITDAR Ebitdar margin improved by a slight In the US economy segment, Ebitdar (IN € MILLIONS) 0.2 points to 26.1%. In upscale and margin contracted by 1.2 points to 36% Up 5.1% midscale hotels, Ebitdar margin under the adverse impact of non-recurring 1,891 1,971 1,936 1,769 1,859 improved to 24.4%, although the increase costs related to industrial accident risks varied by market: in California. Excluding these costs, • Ebitdar increased in 35% of country the margin would have been 37.1%, markets, with margins improving by an unchanged from 2003. average 3.3 points. • Growth was still weak in 65% of country 27.0 27.0 27.1 26.1% of 25.9 revenues markets, with margins declining by an average 1.1 points. In the United States, Ebitdar margin rose EBITDAR BY BUSINESS 5.4 points, representing a €16 million 2000 2001 2002 2003 2004 increase in Ebitdar like-for-like.

The improvement was driven by 17.8% 80% Hotels Ebitdar (earnings before interest, taxes, growth in revenues. €1,481 million depreciation, amortization and rental In economy hotels outside the US, 11% Services expense) represents a key performance Ebitdar margin held firm at a high 36.1% €208 million indicator. It increased by more than despite an increase in salary costs in €90 million for the year. 9% Other businesses most European countries. €170 million

WWW.ACCOR.COM/FINANCE 20 PROFIT BEFORE TAX NET INCOME, GROUP SHARE (IN € MILLIONS) (IN € MILLIONS) Up 13.2% Down 11.5%

751 758 703 523 592 447 474 430 270 239

10.7 10.4 9.8 8.3% of revenues 7.7

QUARTER-ON-QUARTER GROWTH IN 2004 REVENUE ON A LIKE-FOR-LIKE BASIS: 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 UP 4.6% FOR THE YEAR

+4.3% +6.1% +2.9% +5.1% Profit before tax, corresponding to Ebit Net income, Group share less net interest expense plus income declined by 11.5%. It was impacted from companies accounted for by the by the recognition of a non-recurring equity method, represents the result of €58-million impairment loss on operations after the cost of financing Compass shares. Group businesses and before tax. In

2004, profit before tax was at the upper KEY FIGURES end of the €570-590 million range

forecast when interim results were q released in September 2004. The

1st quarter 2nd quarter 3rd quarter 4th quarter improvement marks a return to growth after declining in the two previous years. EARNINGS PER SHARE (IN €) Down 11.8%

2.28 2.40 2.18 1.36 1.20

2004 Dividend

With the new growth DIVIDEND dynamic and encouraging (IN €) signs of an upturn in 1.00 1.05 1.05 1.05 1.30 business, at the Combined Annual and Extraordinary

0.25 Meeting on May 3, shareholders will be asked 2000 2001 2002 2003 2004 to approve the payment of an ordinary dividend of Earnings per share stood at €1.05 plus an exceptional €1.20, based on the weighted 1.05 € dividend of 0.25. This average 199,125,799 shares amounts to a total dividend outstanding during 2004. of €1.30 per share, which, if approved, will be paid on 2000 2001 2002 2003 2004 May 17, 2005.

COMPLETE FINANCIAL DATA CAN BE FOUND IN THE 2004 REFERENCE DOCUMENT FILED WITH FRANCE’S SECURITIES REGULATOR (AMF). THE DOCUMENT IS AVAILABLE ON REQUEST BY PHONE AT +33 (0) 1 45 38 86 94 OR BY E-MAIL AT [email protected]. IT CAN ALSO BE DOWNLOADED FROM WWW.ACCOR.COM/FINANCE

WWW.ACCOR.COM/FINANCE 21 KEY FIGURES Cash Flows

RENOVATION AND MAINTENANCE FREE CASH FLOW DEVELOPMENT EXPENDITURES EXPENDITURES (IN € MILLIONS) (IN € MILLIONS) (IN € MILLIONS)

422 405 316 284 326 562 600 645 563 580 1,251 923 802 586 738

2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004

Renovation and maintenance Funds from operations increased 7% Development expenditures expenditures rose by nearly 15% during to €906 million. Free cash flow (after totaled €738 million, including €308 million the year, and represented 4.6% renovation and maintenance expenditures) for the acquisition of a 28.9% stake in Club of revenues. It included the Red Roof Inn amounted to €580 million. Méditerranée. renovation program in the United States, which drove an increase in revenues per available room (RevPAR).

NET DEBT (IN € MILLIONS)

2,547 2,849 2,802 2,462 2,092 Net debt continued to decline, with a further €370 million reduction in 2004. Excluding the currency effect, debt was reduced by €344 million in 2004, after €167 million in 2003 and €107 million in 2002. The average interest rate on Group debt was 3.35% in 2004, compared with 3.29% the previous year, with 56% at fixed rates (average 3.19%) and 44% at variable rates (average 3.56%).

2000 2001 2002 2003 2004

WWW.ACCOR.COM/FINANCE 22 FINANCIAL RATIOS

2000 2001 2002 2003 2004

Gearing 64% 67% 70% 67% 55% Adjusted funds from operations/adjusted net debt Interest cover x 5.1 x 5.4 x 5.6 x 5.6 x 5.6 Adjusted funds from operations corresponds to funds from operations Adjusted funds from operations/ 17.9% 17.3% 16.5% 15.7% 16.8% adjusted net debt after adding back two-thirds of rental expense. Based on the method used by Gearing ratio Interest cover the main rating agencies, net debt is With shareholders’ equity including Adjusted interest cover (corresponding adjusted by adding back eight times annual minority interests of €3,833 million to Ebitdar expressed as a multiple of rental expense. At year-end, the adjusted and net debt of €2,092 million at interest expense plus one-third of rental funds from operations/adjusted net debt December 31, 2004, the gearing ratio expense) was 5.6 in 2004, unchanged ratio had improved by 1.1 point, to 16.8% amounted to 55% versus 67% a year earlier. from the previous year. from 15.7% at December 31, 2003. KEY FIGURES q

VALUE CREATION 265 291 278 208 219

Value created is based on return on capital employed (ROCE) after tax minus weighted average cost of capital (WACC) multiplied by capital employed (€11.5 billion). Return on capital employed (ROCE), corresponding to adjusted Ebitda expressed as a percentage of fixed assets at cost plus working capital, rose to 10% in 2004 from 9.2% the previous year. Excluding hotels under construction, ROCE would have stood at 10.2% versus 9.4%. Based on an ROCE after tax of 8.3%, a weighted average cost of 2000 2001 2002 2003 2004 capital of 6.4% and capital employed of €11.5 billion, the value created by Accor (Economic Value Added, EVA®) totaled €219 million, versus ROCE before tax 11.7% 11.5% 10.7% 9.2% 10.0% €208 million in 2003, an increase of 5.3%. ROCE after tax 9.0% 9.1% 8.6% 7.6% 8.3% WACC 6.7% 6.6% 6.2% 5.8% 6.4%

WWW.ACCOR.COM/FINANCE 23 KEY FIGURES

Summary Complete financial data can be found in the 2004 Reference Document filed with France’s Financial securities regulator (AMF). The document is available on request by Statements phone at +33 (0) 1 45 38 86 94 or by e-mail at [email protected]. It can also be downloaded from www.accor.com/finance

CONSOLIDATED INCOME STATEMENTS

IN € MILLIONS 2000 2001 2002 2003 2004 Consolidated revenues 7,007 7,290 7,139 6,828 7,123 Ebitdar 1,891 1,971 1,936 1,769 1,859 Rental expense (616) (698) (726) (730) (760) Ebitda 1,275 1,273 1,210 1,039 1,099 Ebit 847 830 755 603 662 Net interest expense (121) (92) (66) (74) (80) Income/(loss) from companies accounted for by the equity method 25 20 14 (6) 10 Profit before tax 751 758 703 523 592 Gains and losses on disposal of hotel properties 19 29 54 68 (26) Gains and losses on disposal of other assets 23 66 (30) (17) (115) Amortization of goodwill (96) (102) (109) (107) (115) Income taxes (256) (246) (234) (163) (158) Exceptional items (net of tax and minority interests) 35 – 68 – 83 Consolidated net income 475 505 452 304 261 Minority interests (28) (31) (22) (34) (22) Net income, Group share 447 474 430 270 239

IN € Earnings per share 2.28 2.40 2.18 1.36 1.20 Dividend per share 1.00 1.05 1.05 1.05 1.30*

*Pending approval by shareholders at the Annual Meeting on May 3, 2005; ordinary dividend of €1.05, plus an exceptional dividend of €0.25.

CONSOLIDATED BALANCE SHEETS

IN € MILLIONS 2000 2001 2002 2003 2004 Assets Goodwill 1,911 1,879 1,679 1,719 1,758 Intangible fixed assets 581 533 479 384 364 Property, plant and equipment 4,696 5,026 4,521 4,133 3,950 Financial assets 773 882 1,165 1,038 1,077 Fixed assets 7,961 8,320 7,844 7,274 7,149 Current assets 3,993 3,780 3,431 3,682 4,361 Total assets 11,954 12,100 11,275 10,956 11,510 Liabilities and shareholders’ equity Shareholders’ equity 3,843 4,139 3,893 3,587 3,755 Shareholders’ equity and minority interests 3,984 4,279 3,984 3,683 3,833 Long-term debt 3,397 3,441 3,372 3,344 3,371 Non-current liabilities and shareholders’ equity 7,990 8,257 7,884 7,578 7,757 Current liabilities 3,964 3,843 3,391 3,378 3,753 Total liabilities and shareholders’ equity 11,954 12,100 11,275 10,956 11,510

WWW.ACCOR.COM/FINANCE 24 Summary Management Review

CONSOLIDATED FINANCIAL STATEMENTS • Income taxes came to €158 million versus €163 million in 2003. The effective tax rate (expressed as a percentage of profit before tax) • Consolidated revenues rose by €295 million to €7,123 million. On was 27.9% compared with 27.6%. a like-for-like basis (excluding the impact of changes in scope of consolidation and exchange rates), revenues were up 4.6% for the • The capital gain on the sale of Accor Casinos in connection with the year and 5.1% in the fourth quarter alone, reflecting firm demand creation of Groupe Lucien Barrière SAS, in which Accor holds a 34% across the Group’s operations. stake, is reported in exceptional income for an amount of €83 million. The Group did not have any exceptional income or expenses in 2003. • Ebitdar (earnings before interest, taxes, depreciation, amortization and rental expense) totaled €1,859 million in 2004, an increase of 5.1% • After deducting minority interests in the amount of €22 million, net or €90 million over the previous year’s €1,769 million. Ebitdar margin income Group share came in at €239 million, down 11.5% on 2003. improved by a slight 0.2 points to 26.1%. • Earnings per share stood at €1.20 versus €1.36, based on the • Ebit amounted to €662 million, versus €603 million in 2003. weighted average 199,125,799 shares outstanding during 2004. Depreciation expense represented 11.1% of the net book value of property, plant and equipment. CASH FLOW • Profit before tax represents the result of operations after the cost of • € financing Group businesses and before tax. In 2004, it rose by 13.2%, Funds from operations increased 7% to 906 million in 2004. returning to growth after two consecutive years of decline. • Capital expenditure for renovation and maintenance rose by nearly € • Net interest expense rose to €80 million from €74 million. It comprises 15% to 326 million during the year, and represented 4.6% Free cash flow interest expense, which increased to €79 million from €71 million, of revenues, versus 4.2% in 2003. amounted to € and non-interest revenues and expenses, including exchange gains 580 million. of €10 million versus €6 million in 2003. • Capital expenditure for expansion totaled €738 million, versus € € • Total fixed asset holding costs (rental expenses plus depreciation 586 million in 2003. It included 308 million for the acquisition € € of a 28.9% stake in Club Méditerranée, of which €295 million was and interest) rose to 1,277 million from 1,240 million, but were KEY FIGURES € € unchanged in relative terms at 18% of revenues. paid in shares. The 308 million also includes a 56 million earn- out payment, of which €17 million will be payable in shares. Excluding • Companies accounted for by the equity method made a positive the Club Méditerranée acquisition, expansion capex amounted to q € contribution of 10 million as opposed to a negative contribution of €430 million for the year. €6 million in 2003. • Asset disposals generated proceeds of €456 million versus • Gains and losses on management of hotel properties, €461 million in 2003. corresponding to sales carried out in the normal course of managing • Net debt € the hotel properties, represented a net loss of €26 million in 2004 continued to decline, with a further 370 million reduction as opposed to a net gain of €68 million the previous year. Gains on in 2004. Excluding the currency effect, debt was reduced by € € € sales of hotel properties were considerably higher in 2003, at 344 million in 2004, after 167 million in 2003 and 107 million gearing €102 million versus only €13 million last year. In addition, provisions in 2002. The ratio stood at 55% versus 67% a year earlier. of €39 million were set aside in 2004. • Return on capital employed (ROCE), corresponding to adjusted • Gains and losses on management of other assets represented a Ebitda expressed as a percentage of fixed assets at cost plus loss of €115 million compared with a €17 million loss in 2003. A working capital, rose to 10% in 2004 from 9.2% the previous year. provision of €58 million was booked to cover the impairment in value Excluding hotels under construction, ROCE would have stood at of Compass shares. Non-operating gains and losses reported under 10.2% versus 9.4% in 2003. this caption included €29 million in restructuring costs.

CONSOLIDATED STATEMENTS OF CASH FLOWS

IN € MILLIONS 2000 2001 2002 2003 2004 Funds from operations 984 1,005 961 847 906 Renovation and maintenance expenditures (422) (405) (316) (284) (326) Free cash flow 562 600 645 563 580 Capital expenditure for expansion and technology (1,251) (923) (802) (586) (738) Proceeds from disposal of assets 843 535 660 461 456 Change in working capital and other 213 (243) (130) 196 357 Dividends (248) (271) (326) (294) (285) Decrease (increase) in net debt 119 (302) 47 340 370

WWW.ACCOR.COM/FINANCE 25 KEY FIGURES

IAS/IFRS As from January 1, 2005, companies listed on a stock market in the European Union are required to Transition prepare their consolidated financial statements in accordance with International Financial Reporting Standards (IFRS).

In general, IFRS emphasize the economic reality of transactions The impact, applied retrospectively from the initial date of the contract rather than their legal form. This “economic” vision introduces the signing, was booked as equity and will be recognized in the income notion of valuing assets and liabilities on the basis of future worth statement in the future. (fair value), whereas previously they were based on past worth (historic value). Accor began preparing for the application of IFRS in 2002 and STRAIGHT-LINE RECOGNITION OF LEASE PAYMENTS has proactively managed the transition by deploying a single, inte- Transition to IFRS Adjusted lease payments grated information system and new consolidation software. The new standards do not impact the Group’s cash position. In preparation for the publication of IFRS financial statements in 2005, and as recommended by the French securities regulator 2005 2008

(AMF) concerning financial communications during the transition Straight-line lease payments period, Accor has estimated the adjustments to be made to its 2004 French GAAP accounts to prepare the comparative 2004 Impact on equity (retrospective application) IFRS balance sheet and income statement. Impact on the income statement On the balance sheet, application of IFRS decreases shareholders’ equity and increases debt. On the income statement, the effect on the bottom line is limited, because the increase in certain costs is partly offset by the elimination of goodwill amortization. • Property, plant and equipment, which were booked in the balance sheet at their historic cost minus depreciation and value impairment, are now separated, with the various components depreciated 2004 CONSOLIDATED FINANCIAL STATEMENTS according to their own useful lives. French Impact IFRS GAAP Statement of Income PROPERTY, PLANT AND EQUIPMENT (COMPONENTS METHOD) Revenues 7,123 (59) 7,064 Current practice IAS/IFRS Ebitdar 1,859 (34) 1,825 Building depreciated Separate components are depreciated according over 35 to 50 years to their own useful lives. Ebit 1,099 (64) 1,035 No residual value Profit before tax 592 (79) 513 Net income, Group share 239 (6) 233 Roof frame 50 years Balance Sheet Shareholders’ equity 3,833 (635) 3,198 Elevators 15 years Building Net debt 2,092 186 2,278 HVAC 20 years

Gearing 55% – 71.2% Shell 50 years Statement of Cash Flows Funds from operations 906 – 906 Free cash flow 580 – 580 • The elimination of amortization of goodwill, which is now tested for impairment annually. • The recognition as expenses of start-up and certain other MAIN IMPACT OF THE SWITCH TO IFRS costs that previously qualified as deferred charges and were These impacts are related to: amortized over three to five years. • The recognition of leases: lease contracts that transfer to the • The depreciation of certain hotel assets due to a change in the lessee substantially all of the risks and rewards incidental to definition of a cash-generating unit in the budget hotel segment. ownership of the property (finance leases) are booked as assets. Operating leases are recognized in profit and loss. • The measurement at fair value of derivative instruments: the Of the 1,553 leases in progress, 34 met the criteria for classification most significant impact concerns convertible/exchangeable bonds as finance leases and were booked as an asset as of January 1, (including OCEANEs), whose components may be recognized 2004. In addition, IFRS eliminates lease payment adjustments for separately as equity or debt. the effect of escalation clauses based on the construction cost • The recognition as expenses of the benefits provided to index or inflation in favor of a system under which lease payments employees under employee stock option plans that were granted represent a constant amount over the entire lease term. after November 7, 2002 and under employee stock ownership plans.

WWW.ACCOR.COM/FINANCE 26 Information and Transparency is one of Accor’s five traditional values, along with confidence, responsibility, Transparency professionalism and innovation. As part of the Group’s commitment to transparency, institutional and individual investors, employees, customers, suppliers and partners are kept informed of events and developments through meetings, publications and dedicated services adapted to the needs of each stakeholder group.

To maintain close contact with the financial community, Accor organizes meetings in addition to the traditional meetings held when interim and full-year results are released. In 2004, meetings were held with financial analysts, institutional investors and individual shareholders to provide them with information about the Group’s businesses, strategic objectives and results. Easily accessible FREQUENT, VARIED MEETINGS shareholder information In all, meetings were held with 234 institutions and 21 roadshows were organized in Europe and the United States. These events THE WWW.ACCOR.COM/FINANCE WEBSITE KEY FIGURES included theme presentations and hotel tours for investors and www.accor.com/finance is designed as a practical guide and extensive portfolio managers, enabling them to meet with frontline managers library. It carries live and deferred webcasts of annual and interim earn- q and more fully understand Group management practices. ings presentations and of the Annual Meeting. Visitors can download a Accor also took part in three international hotel industry confer- variety of corporate publications, track the Accor share price (updated ences and, as it does every year, participated in a number of events every fifteen minutes), review the calendar of Group events and financial for individual investors, including the Actionaria trade show in Paris releases, and browse through the “shareholder information” page. The and a shareholders’ meeting in Annecy. site received more than 100,000 visits in 2004.

AN ACTIVE SHAREHOLDERS CLUB A WIDE ARRAY OF INFORMATIVE DOCUMENTS Created in May 2000, the Accor Shareholders Club included A wide array of documents, whose information exceeds regulatory require- ments, is available to stakeholders upon request or on the Accor investor 6,600 members as of December 31, 2004. Members, who must relations website, www.accor.com/finance: hold at least 50 bearer shares or one registered share, benefit from • The Reference Document filed with the Autorité des Marchés Financiers a number of advantages. During the year, they receive regular news (AMF), France’s securities regulator. and are invited to take part in meetings and site tours. • The Corporate Profile, which provides a brief introduction to Accor along In addition to receiving information through in-house publications with illustrations. and the intranet, employee shareholders take part in meetings in • The Letter to Shareholders, mailed twice a year to shareholders owning Paris when interim and full-year results are released. at least 250 bearer shares and to all shareholders listed in the Company’s share register, as well as to members of the Accor Shareholders Club. A special edition translated into eight languages is sent to employee-shareholders. • Revenues, earnings and other financial announcements published in the RECOGNITION FROM CLUB CARD French press. THE FINANCIAL • COMMUNITY Since 2002, the Shareholders Information memoranda filled with AMF concerning financial transac- Club membership card has also tions. In 2004, for the second year allowed holders to benefit from • The Shareholder Guide. running, Accor’s Director of the advantages offered by the • Notices of shareholder meetings. Investor Relations and Financial Mouvango network, as well as Communications, Éliane Rouyer, other special deals. was voted “Best Investor Relations Officer – Eurostoxx 200” by the UK magazine, A HOTLINE FOR SHAREHOLDERS IN FRANCE Investor Relations. During the Shareholders in France can call 0 811 01 02 03 (calls charged at local rate) or +33 1 45 38 86 94 at any time to obtain general year, Éliane Rouyer was also information about the Group, the latest share price, practical guidelines for private shareholders and, since early 2005, the new appointed Chairman of CLIFF, accounting standards. Investor relations staff can also be contacted at this number throughout the week. In addition, Société the French Investor Relations Générale, as Accor’s agent bank, offers a number of services for holders of registered shares, including a call center for shareholders Association. in France at 0 825 820 000 (0.15 €/min. incl. VAT) or +33 2 51 85 67 89 and the www.nominet.socgen.com website.

WWW.ACCOR.COM/FINANCE 27 STRATEGY

WWW.ACCOR.COM 28 solutions thatmeetemployee andconstituentneeds. range ofinnovativehuman resourcesandsocialprogrammanagement vouchers, theservicesportfoliohasbeen diversifiedtoincludeabroad 34 countriesusingitsserviceseveryday. From itsbaseinmealandfood for companiesandlocalcommunities,with19 millionpeoplein Compagnie desWagons-Lits). Itisalsothebenchmark brandinservices as wellitsrestaurantsandcateringservices (Lenôtre, Gemeaz Cusin, Lucien Barrièrecasinos)andtravelagencies(CarlsonWagonlit Travel), with itspartnersinleisureactivities(ClubMéditerranée andGroupe Hotels business,Accorisamajorplayerinthe travelandtourismindustry actionbutneverexcessive risk.Buildingonits sometimes takingbold strategy ofbalancedgrowthandaconstantfocusonthelongterm— In 2004,Accorpursueditsexpansion andpreparedforthefuture,witha Strategy perspective a new and taking strengths Building on WWW.ACCOR.COM 29

q STRATEGY STRATEGY

Consolidating Market Share and Accelerating Expansion

GERMANY, DORINT SOFITEL BAYERPOST, MUNICH

WWW.ACCOR.COM 30 increased by11.8%yearonyear. countries,especially inLatinAmerica,wherebusiness growth in34 which islesscyclicalinnaturethanHotels, continueditssustained and geopoliticalrisksinhost countries. The Servicesbusiness, current andfuturetouristdemand helpslimitexposuretoeconomic regions. Aligningthegeographicalpresenceofhotelbase with strengthening itspositionsinthemostattractivemarketsother Accor isconsolidatingitsundisputedleadershipinEurope and portfolio business balanced A geographically it’s alreadyareality. slowly aswellinthosewhere business recoveryistakinghold positions incountrieswherethe strategy, Accor isconsolidatingits commitment topursuingalong-term resources services,aswella hospitality industryandhuman perspective” ontourism,the growth strategy. Thanks toa“new skills andapartnership-based of constantlyupgradedprofessional operating structures,awiderange balanced portfolio,avarietyofhotel businesses, ageographically These includestructurallyaligned strengths, which remainunchanged. Continuity, withitstraditional array ofnewproductsandservices. to salesandmarketing, andavast a completelyrevitalizedapproach into touristmarkets ofthefuture, Innovation, withasuccessfulentry of innovationandcontinuity. For Accor, wasayear 2004 booking systems,marketingand expertskills. operating underamanagement contract,itbenefitsfromAccor’s Justlikeahotel and incompliancewiththechain’s standards. owner, whousesoneoftheAccorbrandsin exchange forafee Franchised: in developingcountries. expert skillsinexchange forafee.This structureismostoftenused owner, whobenefitsfromAccor’sbookingsystems,marketingand Managed: economies. Midscale andEconomysegmentsincountrieswithstable try andtheproduct.This arrangementisusedmainlyinthe investor andpaysafixedorvariablerent,dependingonthecoun- Leased: economies. generally usedinregionswiththemoststable Owned: each regiondependingonrelatedcountryandproductrisk. ooptimizeprofitability, hoteloperatingstructuresareselectedin To structures operating financing and hotelof A variety Rather thanowningthebuilding,Accorleasesitfroman Accor ownsthelandandbuilding.This structureis Accor managesthehotelunderoneofitsbrandsforan A franchised hotelismanagedbyanindependent WWW.ACCOR.COM 31

q STRATEGY CONSOLIDATING MARKET SHARE AND ACCELERATING EXPANSION STRATEGY

Accor is pursuing its development to maintain Expanding its leadership in Europe, the world’s largest tourist Far beyond bricks into new market, while expanding into the markets of and mortar,“ markets tomorrow. Accor combines vision with execution.

Tom Barrack, Founder, Chairman and Chief Executive Officer of Colony Capital

ONGOING ORGANIC GROWTH IN ECONOMICALLY MATURE REGIONS, ” MAINLY EUROPE

The business hotel segment continued its sustained development, with a total of 8,000 rooms added to the hotel base during the year. In all, 40 new hotels opened in France, 20 in Germany (including the 400-room Dorint Sofitel Bayerpost Munich and the 600-room Etap- Ibis-Suitehotel complex in Berlin), nine in Spain, eight in Italy, six in the United Kingdom, five in Switzerland and two in Central Europe (the first Novotel in Vilnius, Lithuania and the third Ibis in Prague, Czech Republic). For 2005-2006, Spain has the most scheduled openings, with 20 projects underway (more than half for Ibis), followed by the United Kingdom (12 projects) and Italy (eight). In most cases, these hotels are owned, except in France, where they are generally operated under franchise agreements.

RAPID EXPANSION IN COUNTRIES THAT WILL DRIVE FUTURE GROWTH, THANKS TO THEIR STRONG BUSINESS AND LEISURE TOURISM POTENTIAL

CHINA According to World Tourism Organization estimates, China will be the number-one tourist destination in 2020, with 130 million visitors, compared with 33 million in 2003. It will also be one of the most important tourist-generating countries, with 120 million proactively responded to the resounding success of this propri- Chinese traveling outside their country in 2020, versus 16 million etary location by launching a major construction program for the today. However, not all of tomorrow’s inbound and outbound trav- chain, which is expected to comprise around 50 locations by 2010. elers will enjoy the same high purchasing power as most of today’s Four hotels are already under construction. Moreover, partnerships travelers. Many will want to find accommodations that are com- have been created with local companies to support this develop- fortable but hardly luxurious. At the same time, changes in the ment. Sofitel and Novotel are also active in China, where roughly domestic clientele will have to be taken into consideration. More ten management contracts have been signed. Overall, Accor and more Chinese are traveling within their country and the vast expects to have 10,000 rooms in China in 2006. majority of those staying in hotels will choose economy or midscale Present in China for the past five years, Accor Services is studying establishments. The country’s first Ibis, which opened in Tianjin in the market before introducing new products and will also take part early 2004, already has an occupancy rate of over 95%. Accor has in a review of the country’s healthcare system and social programs.

WWW.ACCOR.COM 32 and four-star hotelsareinshort supply.and four-star (twoNovotel inMoscow)andwherethree operated since1992 inRussia,whereAccorhas properties willopenin2005-2006 Three Petersburg Novotel in2006. beginning withMoscowandSaint development inroughly15cities withoveronemillioninhabitants, Two ofIbis’ recentlysignedjointventuressignal thestart-up RUSSIA units. nearly130 totals hotels.With thenetworknow theopeningof15hotelsin2004, 40 local leadershipbylaunching amajorprograminvolvingmorethan oftheeconomicturnaroundtoconsolidate its advantage taking With multi-brandpresenceinthecountry, along-standing, Accoris BRAZIL isscheduled forfirst-half2005. Bangalore rooms)inDelhi,Puneand breaking forthefirstthreehotels(600 andground- nership withalocalcompanywassignedinlate2004 country thatseemstobefollowingapathsimilarChina’s.Apart- upoperationsinIndia,ahighpotential Ibis isalsoplanningtostart INDIA Group toleverageColonyCapital’sworld-classexpertise inhoteldevelopment. The transactionwillstrengthenAccor’scapitalbase,drivefasterexpansion andenablethe the past14years)reflectsseniormanagement’sconfidenceinAccor’sstrategyandfuture. Colony Capital’smajorinvestment( have beeninthehotelandleisureindustry. $12.5 billion,generatinganaverageannualreturnofover20%.One-thirditsinvestments Colonyhasinvested increase thevalueofretirementfundsitmanages.Since1991, internationalinvestmentfirmwhosemissionisto Colony Capitalisaprivate,US-based Lucien BarrièreSAS. Casinos. Morerecently, thetwocompaniesjoinedforcesincreationofGroupe Libertel hotels,theNovotelParis Tour Eiffel (formerlytheHôtelNikko)andastakeinAccor Demeureand acquiringtheSofitel Colony CapitalhaspartneredwithAccorsince1998, transaction mustbeapprovedbyshareholdersattheAnnualMeetingonMay3,2005. The andconvertiblebonds. ment inAccorthroughtwoseparateissuesofredeemablebonds With theunanimousapprovalofAccorSupervisoryBoard,ColonyCapitalmadeaninvest- € Colony Capital 1 billioninAccor invests € 1 billion,orroughlyone-tenthofitstotaloutlaysover BASE IN 2004 HOTEL OF THE EXPANSION Europe. leased hotelsaremainlyin countries, whileownedand generally usedinemerging Management contractsare franchise agreementsfor25%. and accounted for38% while managementcontracts expansion projectsin2004, represented 37% ofallhotel many assets,ownedproperties strategy ofnotcarryingtoo In linewiththeGroup’s HOTEL EXPANSION FRANCHISED 38% 25% 37% MANAGED OWNED

q STRATEGY CONSOLIDATING MARKET SHARE AND ACCELERATING EXPANSION STRATEGY An innovative real estate management strategy with Foncière des Murs

The sale and leaseback program announced on March 9, 2005 represents a turning point in Accor’s real estate management strategy by providing resources to optimize hotel operations and speed development. The new strategy is to be implemented as follows: • In the Upscale segment, certain Sofitel properties are to be sold and operated under a management contract, sometimes with a minority stake. The objective is for 75% of all Sofitel units to be under management contract in 2006, versus 55% in 2004. • In Midscale hotels, fixed-rent leases will be transformed into variable-rent leases based on a percentage of revenues with no guaranteed minimum. By 2006, 15% of Novotel and Mercure hotels should be under management contract, versus 1% today. An initial transaction concerning 128 hotels in France has been signed with Foncière des Murs, a consortium of investors comprising Foncière des Régions, Generali, Assurances Crédit Mutuel Vie and Predica (a member of the Crédit Agricole Group). The new asset management strategy is expected to generate an additional €400 million in cash over the next 18 months.

RETURN TO GROWTH IN A NUMBER ENHANCING THE LEISURE AND OF OTHER REGIONS RECREATION PORTFOLIO

JAPAN The alliances with Club Méditerranée and Groupe Lucien Barrière The partnership with Mitsui Real Estate, a leading property devel- have strengthened Accor’s position in the leisure and recreation oper, offers major opportunities for expansion in this reputedly dif- tourism segment, which is expected to grow considerably in the ficult market. A second Mercure operated under a lease agreement coming years. was recently opened in Tokyo’s downtown Ginza district.

AFRICA Expansion is also continuing in Africa. In the high-potential Algerian market, a joint venture was created with the Mehri Group to develop 30 hotels under the Ibis and Novotel brands. In addition to the Sofitel Alger and the Grand Hôtel Mercure Alger Aéroport, land A PARTNERSHIP WITH A PROMISING FUTURE has been purchased near the Algiers airport for the construction of an Ibis and five other plots have been identified. In sub-Saharan In December 2004, following Africa, Accor opened its first two hotels in Addis Ababa, Ethiopia approval by the appropriate and a Novotel in Port Harcourt, Nigeria. authorities and in line with the agreement signed early in the which the renowned Fouquet’s MIDDLE EAST year, Accor, the Desseigne- on the Champs-Élysées in Paris Barrière family and Colony is among the most outstanding— Approximately ten new contracts Capital finalized the creation of Groupe Lucien Barrière extends were signed in Persian Gulf coun- Groupe Lucien Barrière SAS, a the Accor portfolio while not tries, notably for the 210-room European leader in casinos with competing with it. Featuring such unique destinations as Novotel Al Anoud in Riyadh and, in 39 gaming establishments* and 5,000 slot machines. The Montreux in Switzerland and early 2005, for the 1,250-suite Zam Desseigne-Barrière family owns Deauville, Le Touquet, La Baule, Zam Sofitel Grand Suites in Mecca, a 51% stake in the new Enghien, Nice and Cannes in which will be the largest hotel in the company, with Accor holding France, the new group will fully Middle East-Africa region. 34% and Colony Capital 15%. leverage its shareholders’ sales, With 16 luxury hotels and a production and financial large number of restaurants—of expertise to attract new customers, improve margins *The hotels and casinos in Cannes and pursue the consolidation of SAUDI ARABIA, have sales agreements ZAM ZAM SOFITEL GRAND SUITES with Groupe Lucien Barrière. Europe’s casino industry.

WWW.ACCOR.COM 34 have beenidentifiedandimplemented pace, ledbythemanysynergiesthat shouldcontinueatafaster in 2004 segment. The turnaroundinearnings on theupscale,friendly, multicultural to modernizeandrefocusitsoperations in abetterpositiontopursueinitiatives shareholder, Club Méditerranéeis With Accorasitsleadingindustry 35 countries. in operates 200establishments leisure segment,inwhich italready enhances Accor’spresenceinthe locations, thealliancesignificantly related expertiseandoftenexceptional globally recognizedbrand,closely Thanks toClubMéditerranée’s PARTNERSHIP AN “INCOMPARABLE” the twocompaniesisjustifiedfor for synergies,thealliancebetween expertise. Inadditiontothepotential purchasing, andsharingskills increasing revenues,optimizing mutually beneficialsynergiesinvolve The threemost promisingareasfor of bothheadquartersandfrontlinestaff. andcomprised in second-half2004 workinggroupssetup provided by30 These figures arebasedonestimates and in 2007 (ofwhich € expected gainsof with project teams,andquantitative, immediately createdbybothcompanies’ constructive workingenvironment thankstothe are bothqualitative, by thetwopartners.These synergies 33 million in 2006 and 33 millionin2006 € 30 millionforClubMéditerranée). 30 € € 16 millionforAccor 17 millionin2005, € 46 million 46 leisure tourismmarket. capitalize onthefast-growing will enablethemtofully companies withleveragethat investment providesboth just apartnership,thisequity Méditerranée. Much morethan of a28.9%stake inClub authorized Accor’s acquisition European Commission the On October19,2004, close contact withcustomers. close contact operations thatbringemployeesinto cultural diversityandafocuson including aninternationalpresence, factors commontobothcompanies, partnership isalsosupportedbyother asset forachieving thatgoal.The resources tobetheirmostimportant customers andconsiderhuman both arecommittedtosatisfying competing. Asservicescompanies, strategically relatedactivitieswithout and ClubMéditerranéeoperatein players intravelandtourism,Accor approach andbehavior. Asmajor interests andsimilaritiesintheir theirconverging other reasons,notably WWW.ACCOR.COM 35

q STRATEGY CONSOLIDATING MARKET SHARE AND ACCELERATING EXPANSION STRATEGY

Attracting and Retaining Customers

WWW.ACCOR.COM 36 customers in2004. drive anearlytwofoldincrease in thenumberofSpanish-speaking isnow accessible inSpanish,which helped German, theportal InadditiontoFrench, Englishand national accorhotels.comportal. functions werealsoaddedtothe varioussites,especiallytheinter- these bookingsweremadedirectlyonAccorhotelwebsites.New business volume,comparedwith5.6%in2003.Overall,81% of to morethan continued duringtheyear, withonlinerevenuesincreasingby44% driver oftheInternetasaconsumersales The risingimportance TARGETING CONSUMERS andmarketing. approach tosales lined, targeted customersthroughastream- focused onattractingandretaining In additiontoexpandingitsgeographicalpresence,Accorisalso marketing and sales to approach A targeted € 431 million.This representednearly8%oflodging by 87% fortheyear. increased tions, asthenumberofroomnights bookedviatheportal The campaignalsohelpeddrivesharpgrowth inonlinereserva- on otherbrandsites,rising42points inMayand22pointsJune. Traffic than increasedmoresharplyontheaccorhotels.comportal brand increasedbysixpointsfollowingtheseven-weekcampaign. who organizetheirownleisureholidays,whoseawarenessof the group,comprisedofpeople This wasespeciallytrueforthetarget withregardtothecampaign’sbudgetandduration. satisfactory conducted inFrancebySofresshowedthattheresultswere very impact study traffic.ASeptember2004 brand andincreaseportal campaign wasintendedtoraiseawarenessoftheaccorhotels.com print media,theInternet,hoteladvertisinganddirectmarketing, the Netherlands, Belgium,Austria,SwitzerlandandSweden.Using Germany, France,theUnitedKingdom,Ireland,Luxembourg, An “Unlock yourdreams”advertisingcampaignwasrolledoutin ADVERT ACCORHOTELS.COM THE alities andhotelbrandpreferences. which includesinformationonnation- been addedtothedatabase, andhave Some 132,000participantsprovidedpersonaldetails from tencountriestookpartinacontesttowinfreevacationstays. having fun.FromApril23toJuly22,nearly200,000sitevisitors whether forsports,relaxing,beingtogether, newdiscoveriesorjust tinations andhotelsspecificallyadaptedtocustomer“dreams,” Accor’s leisureportfolio,thenewsiteincludesaselectionofdes- around thethemeof“Unlock yourdreams.” Intendedtospotlight revampedfunctions,sectionsandservices,built identity andtotally were greetedbyanewhomepagethatfeaturedgraphic inJanuary2004 The 55,000visitorstotheaccorhotels.comportal DREAMS” ATTRACTIVE MORE W A SIMPLER, EBSITE TO “UNLOCK YOUR TO “UNLOCK EBSITE ISING CAMPAIGN WWW.ACCOR.COM 37

q STRATEGY ATTRACTING AND RETAINING CUSTOMERS STRATEGY

REVENUE MANAGEMENT CHALLENGE

The Revenue Management Challenge is a simple evaluation and motivation method applicable to all operational staff, from the country chief executive to hotel reception teams. Based on self-assessment rather than evaluation by an outside expert, this unique training program covers such topics as anticipating demand, monitoring results on a day-to-day basis and making recommendations to front desk teams, tracking future bookings, and effectively managing revenue per available room (RevPAR).

• The integration of 50,000 holders of the Europcar Europoints Card into the Mouvango network, created by Accor and Total in 2002, thus enhancing the loyalty offer for all three companies’ common customers.

TARGETING COMPANIES

The Accor Sales Application (ASA) system is built around an international customer database accessible to 1,500 hotels and 650 online sales representatives in 20 countries in Europe, the Americas and Asia, including Australia. The system contains data on 70,000 companies, travel agencies, tour operators and other B2B accounts, as well as on 140,000 customer contacts, including purchasers, specifiers and reservation agents. Implementation GROWING POPULARITY OF LOYALTY CARDS of ASA began in 2003 and was continued in 2004. The system Loyalty cards are a key component of Accor’s strategy. At year-end has greatly facilitated sales administration, management of negoti- 2004, holders of loyalty cards totaled 1.8 million, a 26% increase ated rates and contracts, operational management and business over the previous year. For the cards included in the joint volume tracking. Compliments from Accor Hotels program since 2001 (notably A new version of the Travel Accor Reservation System (TARS) Accor Mouvango, Accor Favorite Guest and Sofitel Privileged centralized booking system was deployed in 2004. It has greatly Guest), the number of holders totaled 660,000 in 2004, a 49% accelerated the distribution of sales decisions, with new contracts increase over the previous year, while the number of hotel nights listed and accessible to travel agencies around the world the day generated by the cards amounted to 4.8 million, a 14% rise. after they are signed. By harmonizing the different systems for sales New products (ASA), booking (TARS) and distribution (GDS, the Internet and call • The Accor Favorite Guest Corporate Card, which offers room centers), Accor has achieved a level of efficiency rarely equaled by rate discounts, itemized hotel expenditure statements, guaranteed the competition. Thanks to the upgraded booking system and the availability, a personalized welcome and many other services. development of customer interfaces with the Internet and travel • The inclusion of the Ibis Card in the Accor Favorite Guest pro- agency booking systems, more than ten million room nights in gram, enabling holders to earn Compliments points not only with Accor hotels were booked with TARS during the year, compared Ibis but in all Accor hotels. with roughly eight million in 2003.

WWW.ACCOR.COM 38 showcasing itsvalueformoneyandclose-to-the-customerservice. Hotelchain overhauleditsadvertisingin2004, 2002, theEtap cheerier roomandanexpandedreceptionareaservicesofferin After introducinganeasier-to-see-and-readlogo,abrighter, OF PRODUCTSANDSERVICES A NEWGENERATION ETAP HOTEL and otherobjectscanbepurchased. Sofitel’sonlineshoppingwebsite,whereMyBed items Boutique, can learnabouttheproduct.Lastly, alinkisincludedtoSo not onlytothegeneralpublicbutalsotravelagents,sothatthey an onlinecontestwithgiftvouchers asprizes.The contestisopen alistofhotelsalreadyofferingthenewbedand uct presentation, section hasbeenpostedonthebrand’swebsite.Itincludesaprod- 2005. To supporttheofficiallaunch oftheSofitelMyBed,anew European countrieswillbeequippedwithMyBedbyyear-end dards ofhygieneandcomfort.MostSofitelinFranceother forter—all anti-allergytreated—which guaranteeimpeccablestan- featherbed, fourlargedownpillows,andaduvetcom- addition toabox springandextrathick mattress,itincludesa priority, MyBedwasdesignedtoprovideexceptionalcomfort.In Meeting Room.Becauseagoodnight’ssleepiscustomer’stop products,graphicidentity,complimentary libraryandBoard gourmet cuisine,breakfasttray, uniforms, flowerarrangements,staff key componentsoftheSofitelbrandidentity, alongsidethechain’s MyBed isthenewsleepingconceptthathasbecomeoneof REINVENTING SLEEPWITHMyBed SOFITEL OIE AI OT ESÈVRES DE PORTE PARIS SOFITEL AEBACKPACKERS BASE POSTER MYBED H NETHERLANDS THE HOTELS , , TPHOTEL ETAP , MTRA AIRPORT AMSTERDAM women-only. or adormitory, someofthem choose eitheraprivateroom hostel prices.Customerscan at highlycompetitiveyouth hotel-style comfortandservices accommodation conceptoffers a youthhostel,theinnovative Positioned betweenahoteland were openedinAustralia. twonewunits exceeds 90%, where theoccupancyrate 2003 launch inNewZealand, chain. Following itssuccessful share intheBaseBackpackers Accor managesandownsa CONCEPT ACCOMMODATION AN INNOVATIVE IN AUSTRALIA BASE BACKPACKERS WWW.ACCOR.COM 39

q STRATEGY ATTRACTING AND RETAINING CUSTOMERS STRATEGY

RESTAURANTS

NOVOTEL CAFÉ 21ST CENTURY FOOD SERVICES

A key component of the Novotel brand and image, the chain’s food service offering was entirely reworked in response to changing customer profiles and expectations: • Product quality and service consistency are ensured by the latest production processes and through innovative menus designed by Lenôtre. • The food services offering takes into account new eating habits. For example, most dishes are now made using the Spanish “à la plancha” cooking technique to meet customer demand for naturally, simply prepared foods. Customers can get something to eat at any time and have meals in their room (Coffret Liberté meal box or room service), in the Novotel Café (with its multiple dining options) or in the traditional setting of a classic Côté Jardin restaurant. The new concept was introduced in 40 Novotel locations in 2004 and will be extended across the entire network of 120 hotels in France by June 2006. MERCURE LE BISTROT DE L’ÉCHANSON: CAFÉ PASTA & CIE INNOVATING IN THE A TASTE OF TUSCANY AT IBIS TRADITIONAL STYLE Ibis offers a multitude of food service formulas. These include Already famous for its wine list, restaurants, such as La Table, l’Estaminet and Sud et Cie, featuring Mercure has now innovated a wide range of menus served at usual dining hours; the Bar with a new restaurant concept. Rendez-vous, with its innovative selection of easy-to-prepare dishes Customers begin by choosing their wine and are then advised served around the clock; and theme cafés, like Café Bière & Cie, PARIS-ROISSY, DORINT AIRPORT HOTEL as to what dish would go well Vin & Cie and Café Bistrot, offering limited-selection menus from with their selection. The formula 6:00 to 11:00 p.m. The latest addition to the café concept is Café promotes local wines while Pasta & Cie, developed jointly with Barilla, Europe’s leading pasta following the general trend producer. This easy-to-manage concept guarantees consistent towards drinking less at lunch, product quality. Dishes are prepared in just over one minute and in since wine is served by the glass. Building on the concept’s front of the customer, adding a touch of conviviality and entertain- initial success at the Mercure ment. The atmosphere is further enhanced by ocher and red-toned Grand Hôtel in Nantes, where decoration, inspired by Tuscan villas, as well as black granite floors. restaurant traffic increased from The first Café Pasta opened at the Ibis Paris Berthier and will be 18 to 52 meals a day, other followed by several others in the coming months. Bistrot de l’Échanson units were opened during the year. Openings scheduled for 2005 include Mercure hotels in Paris’ Montparnasse district, as well as in Budapest and Tokyo.

WWW.ACCOR.COM 40 tively leveraging individual talents toimprovecollectivewellbeing. tively leveragingindividualtalents enhanced resourceswillbedeployed,withthegoalofmoreeffec- newmanagementtechniques and project. In2004-2005, duced inhotelsthe12Europeancountriesinvolved bers submittedmorethan5,000ideas,someofwhich wereintro- on “simplyenjoyingthetravelexperience.” Participatingteammem- was oncreativityandinitiativeindevelopinganewvision,based thefocus the processratherthanjustacceptingit.In2003-2004, ment andinvitesemployeestohelpcreatechange andinvestin the conceptshiftsfocusfromproductqualitytopersonalenjoy- Garden—a referencetothegardener’spassionandnurturingcare— Hotel andFormule 1economychains. CalledtheExtraordinary intheIbis,Etap launched in2003andactivelypursued2004 A newapproach tocustomerrelationshipmanagementwas EXPERIENCE” “SIMPLY ENJOYINGTHETRAVEL THE EXTRAORDINARYGARDEN customers Chinese Welcoming INTERVIEW example, morethan100Accorhotelsnow In France andotherEuropeancountries,for number ofservicestomakethem feel welcome. will stayinAccorhotelsandhave introduceda forecast for2020.We hopethatmanyofthem a yearatpresentandmorethan120million traveling outsidetheircountry—nearly20million It’s truethatmoreandChineseare What’s Accor doingtowelcomethem? The number ofChinesetouristsisontherise. ROSITA YIU SALES DIRECTOR EU DIRECTOR SALES ROPE INCOMING ASIAROPE INCOMING 5,000 in theproject. countries involved the 12European duced inhotels which wereintro- ideas, someof Chinese breakfastmenus. the world,tohelpthemdevelop specifically I oftenvisitthesehotels,andothers around kettle—since theChinesedrink so much tea. indispensable cookingutensil—anelectric staff whospeakstheirlanguageandan include atleastonememberofthereception television station.Very often,thesehotels tourism newspaper, aswellthePhoenixCNE receive rvladTaeinEurope, Travel andTrade NERP MAGAZINE EUROPE IN CHINA WWW.ACCOR.COM ’ RVLADTRADE AND TRAVEL S the Chinese 41

q STRATEGY ATTRACTING AND RETAINING CUSTOMERS STRATEGY

SERVICES TO COMPANIES TICKET RESTAURANT ONLINE AND PUBLIC INSTITUTIONS ORDERING

Since December 2003, Accor Services’ corporate customers in France—like their counterparts in Belgium, Brazil, Germany, Spain, Sweden and Venezuela—can order meal, home services and other vouchers on the ACCOR SERVICES TR On Line website. In 2004, LAUNCH OF THE ACCOR SERVICES more than 35,000 orders EMPLOYEE WELL-BEING BAROMETER were placed via the site.

Ever sensitive to changing employee behavior and expectations, and to the need to adjust its product portfolio accordingly, Accor Services conducted its first annual barometer of employee well- being and involvement in the workplace. The barometer provides a system for observing the behavior of employees and their relations both with the company and with work in general. The 2004 barometer, whose results were released on November 18, revealed two major trends-growing demand for companies to take into account individual needs and the emergence of “employee-consumers.” FOOD VOUCHERS NEW GROWTH PROSPECTS FOR ACCOR LAUNCHED SERVICES IN THE UNITED KINGDOM IN PERU

Accentiv’, Accor Services’ relationship marketing agency, acquired Introduced in the country UK-based Capital Incentives during the year, thereby strengthening in May 2004, the Ticket its international network and establishing a foothold in Europe’s Alimentación® food voucher largest market for gift vouchers (€1.6 billion) and incentive products. is now distributed by eight large Peruvian companies Already present in the United Kingdom since 1985 in two key and accepted in a network aspects of human resources management—Meeting Life Essentials of 500 restaurants, and Enhancing Well-Being—Accor Services has now extended its supermarkets, catering local services offer to include the third aspect—Improving companies and other Performance. affiliated establishments.

TESORUS RETRAITE A NEW CORPORATE PENSION PLAN FROM ACCOR SERVICES

In September 2004, Accor Services launched Tesorus® Retraite, a new corporate pension plan (PERCO) voucher. As easy to use as BIEN-ÊTRE À LA CARTE ® a Ticket Restaurant meal voucher, the new product provides small LIFESTYLE SUPPORT SERVICES and mid-sized company employees with a supplementary retirement INTRODUCED AT SUITEHOTEL program that allows them to independently manage how often and how much they invest. Retiring employees can choose either a tax- As of July 1, 2004, customers staying more than one month in a able lifetime annuity or a one-time, tax-free payment, while employ- Suitehotel are entitled to a range of personalized assistance services ers are exempt from certain payroll charges and can deduct from Bien-Être à la Carte, developed as part of the hotel chain’s program contributions from their taxable income. By revitalizing com- “extended stay” offer in France. Just a simple, toll-free phone call and pany human resources management practices, Tesorus® Retraite customers can access an array of services, ranging from childcare and makes it easier for small and mid-sized entrepreneurs to hire, retain car maintenance solutions to tax and legal counseling and information and motivate people. about government programs.

WWW.ACCOR.COM 42 visibility ofAccor’sbrandsand forgecloserlinkswithcustomers. Department conductsactions alongside partnerstoincreasethe tions programs.Guidedbythis principle, theStrategicPartnerships with theGroup,thusprovidingopportunities forjointcustomerrela- ate infieldsthatarecloselyrelatedtoAccor’s,butdonotcompete phone servicesandpaymentmedia.Alloftheseindustriesoper- mobile global companiesintheareasoftravel,transportation, The priorityfocusisoncreatingorexpandingpartnershipswith to existingservices. access for customersbydevelopingnewservicesandfacilitating enhancing visibilityandawarenessofitsbrands,creatingvalue increasingmarketshare, Accor isfirmlycommittedtoprofitably a strategic sales priority Partnerships: computerized, compared to 50% previously.computerized, comparedto50% service hasbeenimprovedwith 95%ofthetracking systemnow to managetheseprogramshas beenreducedandcustomer hotels inAustralia.Moreover, thetimeneeded byhotelstaff makeiteasiertopromoteFrench home countrieswill,forexample, toshareroutesbetweentheir signed byAirFranceandQantas sible torespondfasteropportunities.The recentagreement airline andAccorheadofficesregionalteamstomakeit pos- cooperationwasstrengthenedbetween Japan AirLines.In2004, AirNewZealand,Thai Airwaysand Singapore Airlines,Qantas, aswellAmericanAirlines,CathayPacific, and Czech carrierCSA) AirLines, Aeromexico Delta Skyteam Alliance(AirFrance,Alitalia, lines aroundtheworld.These includeitsstrategicpartnersinthe Accor participatesinthefrequentflyerprogramsofroughlyten air- AIRLINES WWW.ACCOR.COM 43

q STRATEGY ATTRACTING AND RETAINING CUSTOMERS STRATEGY

LENÔTRE ONBOARD AIR FRANCE FLIGHTS

Lenôtre’s Olivier Poussier, elected World’s Best Wine Steward in 2000, has been chosen by Air France to select wines served on the airline’s flights.

ACCOR Since 1999, Accor has partnered Air France in all SERVICES markets and with all customer types. While the two PARTNERS WITH AIR companies conduct joint marketing, communication FRANCE IN and purchasing actions, synergies have focused on CHINA customer loyalty. With the Sofitel, Novotel, Mercure Accentiv’, Accor and Suitehotel brands included in Air France’s Services’ Fréquence Plus frequent flyer program, members relationship who stay in one of more than 1,300 Accor hotels marketing unit, throughout the world earn miles that can also be con- signed a contract with Air France in verted into room nights. Following a campaign China to develop launched in 2002 and pursued in 2003 to show films and manage a on Accor on Air France flights and in its agencies loyalty program outside France, the partners’ priority in 2004 was to have just booked a room to also reserve a seat on for 1,500 certified develop shared services. These include call forward- one of the carrier’s flights. Lastly, with Accor hotels in Air France agencies throughout the ing between both companies’ call centers in the most destinations served by Air France, solutions country. United States and France, promotion and sale of were introduced to optimize stays for the airline’s hotel nights in Air France agencies and the creation crews. In all, the partnership generated 785,000 of a link on accorhotels.com enabling customers who additional room nights in Accor hotels.

INTERVIEW JEAN-CYRIL SPINETTA CHAIRMAN AND CEO AIR FRANCE

Air France has only two corporate The forthcoming merger of Air France’s partners, meaning partners with whom Fréquence Plus and KLM’s Flying we create a true brand alliance. Accor Dutchman to create Flying Blue will and Air France are both leaders in the result in a program with some ten world of travel, and pooling our million members and provide Accor’s resources enables us to respond more customers with the world’s largest effectively to customer expectations. network. At the same time, Accor’s In this way, we strengthen our equity investment in Club Méditerranée competitive edge and increase market will enable us to enhance our leisure share. In addition, we have the same portfolio. In addition to pursuing mutually economic and cultural positioning, beneficial business opportunities, we What are the benefits of your shared by our customers. We strive to want to work together to develop partnership with Accor and what do achieve a balance between French art innovative products and be more assertive you see as the future challenges? de vivre and global expansion, and in terms of our visibility and advertising. The strategic benefits are most we’re not hesitant about investing in the important. We should bear in mind that future. Look what we’ve done with KLM.

WWW.ACCOR.COM 44 September attheParcdesPrinces inParis. children and theirparentsfortheCupFinal Cup.Asanofficialinternational partnertotheevent,Accorlodgedsome600 2004 took Nations Cup,aglobalsoccercompetition foryoungsters.Thirty-two countries,twomillionplayersand815,000 spectators theFrench foodcompany’s Actimel dairydrinkisservedatbreakfastinNovotelhotels.Accor isalsoapartnertothe example, Danone andAccorarecontinuing theirjointprogramtointroducecustomersDanone’s new Bien-Êtrelineofhealthyproducts. DANONE FOOD INDUSTRY cross-participation inloyaltyprograms. grams. This internationalcooperationagreementalsoinvolves such astheSuitehotelGrandWeek-End andMercureSeniorpro- agencies inhotelsandspecialjointoffersforeach hotelbrand, ofEuropcar car/hotel cross-bookingagreement,theinstallation joined forcestooptimizecustomerservice.These includea Through theirstrategicpartnership,AccorandEuropcarhave EUROPCAR CAR RENTAL The SNCF RAIL TRANSPORT OTHER PARTNERSHIPS service culturetechniques. agents, conductorsandcrewmanagersincustomerreception also signedacontracttotrainapproximately 1,000 revenues ofmorethan train networkinFranceafive-yearcontractthatrepresentstotal onboard foodserviceandlogisticsfortheentireTGV high-speed des Wagons-Lits The partnershipwith for therailway’s26,000conductorsandengineers. sidiary of up adedicateddivisioncalledAccueilPartenaires.Ajointsub- sourced managementofresidentialfacilities—forwhich Accorset with Since thecreationof thalys.com bution campaignsontheEuropeanhigh-speedtrainnetwork’s toconductjointmarketinganddistri- with Thalys onJuly1,2004 neighboring Europeancountries.Asimilaragreementwassigned Sofitel, Novotel,Mercure,SuitehotelandIbishotelsinFrance renewed forfiveyears,enablescustomerstobookroomsin1,200 a 15%increaseoverthepreviousyear. The agreement,which was France’s nationalrailway, generated229,000roomnightsin2004, Train+Hôtel SNCF SNCF website. has beenextendedtoincludeanewbusiness—out- and Accor, Orfeahandleslodgingarrangements program createdinapartnershipwith won acallforbidsfrom SNCF Orfea € 500 million. 500 extends beyondlodging. in December2003,thepartnership Académie AccorServices Académie SNCF to SNCF s Compagnie provide SNCF, ales in thehotels. discount-rate accesscards purchase specialAccor States. Customerscanalso and, outsideEurope,theUnited Spain, theUnitedKingdom, the Netherlands,Portugal, Republic, Germany, Hungary, theCzechfor Austria, Belgium, agreements havebeensigned equipped. Elsewhere, in France arenowWi-Fi ofallhotels Orange, 90% Through apartnershipwith Suitehotel andSofitel). Ibis, Mercure,Novotel, all chains (Formule 1,EtapHotel, hotelscovering a totalof1,605 This represents year-end 2004. access networks(Wi-Fi)at equipped withwirelessInternet Accor hotelsinEuropewere leading telecoms,75%ofall Following agreementswith ACCESS WI-FI INTERNET WIRELESS NETWORKS Bouygues TelecomBouygues subscribers. from outsideFrance by compliant andcanbeaccessed has beenmadei-mode The accorhotels.comwebsite BOUYGUES MOBILE TELEPHONES number ofAccorhotelchains. from specialoffersina loyalty programcanbenefit Crédit Lyonnais’ Avantages million French membersofthe two dating back to1999, As partofapartnership CRÉDIT LYONNAIS for theirjointcustomers. American ExpressandAccor benefits designedby solutions andloyaltyprogram expense management of advantage Card cantake the co-brandedCorporate American ExpressCardand Holders oftheCompliments- EXPRESS AMERICAN PAYMENT CARDS 1 million in Accor hotels. million additionalroomnights generated approximately one theGroup’spartners In 2004, WWW.ACCOR.COM part inthe , heldin Danone 45 For

q STRATEGY ATTRACTING AND RETAINING CUSTOMERS STRATEGY

FRENCH OPEN GOLF TOURNAMENT

The Group’s hotel brands, federated under the Accorhotels umbrella brand, are the leading SPORTS SPONSORSHIP partner to the French Open golf tournament, a major event on With operations on all continents, Accor has, for the past six years, the European professional been committed to an active policy of sports sponsorship designed circuit held at the National Golf Course in Saint-Quentin-en- to meet four objectives: Yvelines outside Paris. In 2004, • Strengthen awareness of Accor and enhance its image world- the tournament generated a wide. total of 455 hours of airtime on • Develop employee pride in the organization. 31 television channels around • Showcase its brands and operations by creating new business the world. Leading up to the event, some 30 Accor hotels in opportunities. Europe took part in a series of • Support and federate initiatives developed every day by its brands amateur competitions called the and establishments around the world. Accorhotels Challenge. Winners As part of this sponsorship commitment, Accor supports the were invited to Paris to take Olympic movement and leverages its expertise in lodging and ser- part in a final playoff and attend the last day of the Open. vices for other world-class sporting events, including the 1998 and 2006 FIFA World Cup, the 2000 and 2004 Olympic Games, the 2003 World Championships in Athletics, and the 2003 and 2007 Rugby World Cup.

PARTNERING WITH THE OLYMPIC MOVEMENT Because of the Games’ truly global scope and values, which are shared by Accor teams around the world, the partnership with the Olympic movement is the most representative of Accor’s sports sponsorship programs. Joint actions are undertaken with national committees in countries where the Group and its brands are well established, notably in France (since 1999) and Australia (since 2001). For the 2004 Games in Athens, nearly 600 hotels in these countries organized advertising campaigns, poster displays, con- tests and other operations to support their national teams. The entire Accor international network is also involved in promoting the Olympic spirit. In 2004, a special “From Athens to Athens” pho- tography exhibition was held in nearly 1,000 hotels in nine countries, not just in Europe but including Saudi Arabia, Brazil and Australia. To publicize its support for the Olympics, Accor deployed a range of communication actions that included advertising (especially on the Eurosport channel during broadcasts of the events), giant banners on high-visibility Accor hotels in Athens and Paris, and publications devoted to the Games. A special issue of Accor If France is awarded the 2012 Olympic Games, the benefits for Magazine was published in France and a practical guide produced the Group will be even greater. That’s why Accor, alongside 16 in partnership with the International Herald Tribune was distributed other world-class companies, became a founding member of the in 600 hotels in France, Athens and Australia. A dedicated section Club des Entreprises Paris 2012. In this capacity, it is actively pro- was also created on the intranet, which is accessible to Accor moting Paris’ candidacy to host the Games, providing its capabili- employees around the world. ties in lodging and services, undertaking contractual and financial Most of Accor’s businesses benefit from the impact of this sup- commitments for 50,000 rooms and supporting a major campaign port for the Olympics. The Athens Games created opportunities to raise public awareness of the importance of the city’s bid. for the Sofitel and Novotel chains, Accor Services, Carlson Accor’s contributions include the display of giant banners on high- Wagonlit Travel and Lenôtre, which served 70,000 meals at Club visibility hotels in Paris, Roissy and Lille, the publication of a special France and the Sponsor Hospitality Center, and whose high- Paris 2012 issue of Accor Magazine for the visit of the IOC’s quality service was widely appreciated and widely acclaimed. Evaluation Commissions, an Accor Vacances hanging scroll with Thanks to this performance, Accor’s well-known gourmet catering the Paris 2012 logo in Carlson Wagonlit Travel’s 300 agencies in brand generated €4.5 million in revenues and further enhanced France, and a specially designed booklet cover for Ticket its powerful global identity. Restaurant meal vouchers, used by one million people.

WWW.ACCOR.COM 46 countries. France, theUnitedKingdom,Germany, Italy, Spainandthe Benelux university professors,financialanalysts andotheropinionleadersin senior executives,journalists, of600 The studyinvolvedasample versus79%). upfrom45%) andGermany(96%, Kingdom (60%, in 2002,withthegreatestincreasesrecordedUnited from 73%familiar withAccoranditsbrandsroseto81%in2004, Europe awareness ofAccoranditsbrandscontinuestoincrease in according toabiennialstudybyEuroleadersTaylor NelsonSofres, While itisstilltoo earlytomeasurethecampaign’simpact, kits weredistributedworldwide. tries, thecampaignwastranslatedintoninelanguagesandrollout adapt toAccor’sdifferentoperatingenvironmentsandhostcoun- pan-European press,airlinemagazinesandtheFrench media.To Targeting opinionleadersandfrequent travelers,itappearedinthe demonstrate employees’newperspectiveontheirbusiness. tives throughportraitsofninemenandwomenwhoseactions initia- of marketing,employeerelations,socialandenvironmental rather thanwhatitis emerging publicandconsumerdemandabout Thecampaign waslaunched objectivewastorespond in2004. A awareness of Accor Growing “new perspective” . The percentage of respondents who said theywerevery ofrespondentswhosaid . The percentage on HotelsandServicescorporateadvertising . The campaignshowcasedalargenumber what Accordoes tion theydeserve. social responsibilityinitiativeshave notalwaysreceivedtheatten- than sevenpoints.However, and theGroup’smany environmental innovative offerings.Brandgoodwill hasalsoincreased,bymore from thecompetitionthrough its effectivemarketingactionsand viewed asattentivetocustomerneedsandclearlydifferentiated a widerangeofactivitiesinlargenumbercountries. It is Accor isalsoincreasinglyrecognizedasadynamicenterprise with of businessperformance,marketing/advertisingandsales Perception ofAccorhas alsoimproved, especiallyintheareas Accor logo. the strategyofsupportingindividualhotelbrandswith the increased (bytenpointsonaverage),reflectingtheeffectiveness of improve. Recognitionofthedifferentchains asAccorbrandsalso versus 73%) andMercure(78%, versus74%) their scores saw versus87%), andIbis(90%, whilebothSofitel(81%, at 94%) The mostwell-knownhotelbrandsareNovotel(awarenessstable has alsoincreased. offerings. Brandgoodwill actions andinnovative through itseffectivemarketing from thecompetition and clearlydifferentiated attentive tocustomerneeds The Groupisviewedas advertising andsales. performance, marketing/ in theareasofbusiness also improved,especially Perception ofAccor has IMAGE AN ENHANCED WWW.ACCOR.COM 47 .

q STRATEGY ATTRACTING AND RETAINING CUSTOMERS STRATEGY

HUMAN RESOURCE POLICY PRIORITIES pages 51 52 53 99 101 102 102 103 Developing Our Human Capital

WWW.ACCOR.COM 48 by management. resources policyisjobmobility, which iswhole-heartedlysupported and climbtheprofessionalladder. Anotherpriority ofthehuman opportunities toenhancetheir career prospectswithintheGroup the loyaltyofemployees—especially thebestofthem—istogivethem The surestwaytoearn newanddifferenttasks. pare themfortotally tively handletheircurrentandfutureresponsibilitiesaswellto pre- Training programsaredesigned toenableemployeesmoreeffec- efficiency willearnthemgreaterfinancialandpersonalrecognition. ing customerneedsbutalsotheassurancethattheirenhanced emerg- ees receivenotonlytheadditionalskillstheyneedtosatisfy Special emphasisisplacedoncertificationprograms,sothatemploy- methods. of jobskills,customerrelationstechniques andsales agement system,which focusesontrainingemployeesinavariety Skills enhancementisattheheartofAccor’shumanresourcesman- TRAINING AND JOB MOBI intoaccountthrougharangeofhiringpractices. taken include applicant’naturalabilitiesandaptitudes—qualitiesthatare Group’s diversityextendsbeyondage,genderandnationalityto it hasalwaysbeencommittedtooutreach andintegration.The members,regardlessoftheircountryorigin,which iswhy its staff Accor hasbaseditsdevelopmentonthemotivationandqualityof HIRING which buildoncurrentactions. motivated teams.That’s whythefocusisonfollowingpriorities, needs offrontlinemanagers,whomusthavethesupportskilled, work, Accor’shumanresourcespolicyisdedicatedtoservingthe byaninternationalnet- tening attentivelytotheirconcerns.Backed members,recognizingtheirachievements andlis- and trainingstaff focusonintegrating faction andperformancerequiresaconstant customers.Improvingemployeesatis- for attractingandretaining tion, andthatsmilesskillsareinseparableindispensable that servicequalitydependsontheirprofessionalismandmotiva- asset, Accor hasalwaysfeltthatemployeesareitsmostimportant Priorities PolicyResource Human LITY focus onindividualabilitiesandprofessionalskills. out andintegratingemployeesfromabroadhiringpool,with opportunity areexpressedinanongoingcommitmenttoreaching Long anintegralpartofAccor’sgrowthstrategy, diversityandequal EQUAL OPPORTUNITY AND DIVERSITY objectives. and/orquantitative to theachievement ofqualitative with localmarketpractices.Mostalsobenefitfrombonuseslinked inline Accor iscommittedtoofferingallemployeescompensation COMPENSATION ing environment. andapositivework- tive dialoguewithemployeerepresentatives aconstruc- employee relations.Accoriscommitted tomaintaining More thanever, theGroup’shumanresources policyisfocusedon DIALOGUE SOCIAL a documententitled porate valuesthatexpresstheAccorspirit,which arepresentedin are implementedwithintheGroup.Innovationisoneoffive cor- ees tomakesuggestions,andrewardsthebestideaswhen they and amanagementtool.The innov@ccorprogramenablesemploy- isbothacore value increase customerandemployeesatisfaction At Accor, involvingteammembersinthesearch fornewwaysto INNOVATION try, joborfunction. been developed,each adaptedtothespecificfeaturesofcoun- Lastly, alargenumberofemployeerecognitionprogramshave continuous improvement. regularly toencouragedirectinteractionandpromoteaspiritof discussionsareheld being present.Inallcountries,roundtable withouttheirmanager them tofreelyexpresstheirdissatisfaction through internalopinionsurveys,andanopendoorpolicyallows aremeasuredregularly ships. Employeemotivationandsatisfaction tunities theyexpect.This involvescreatingclose,trustingrelation- andcareerdevelopmentoppor- them thetraining,compensation Employees arerecognizedinanumberofways,initiallybygiving LISTENING TO AND RECOGNIZING EMPLOYEES employee needsinthehostcountries. to ing andthedeploymentofmedicalcoveragesystemstailored policyisgroundedinprevention,train- Accor’s healthandsafety HEALTH SAFETY AND The Manager’sBenchmarks WWW.ACCOR.COM . 49

q STRATEGY DEVELOPING OUR HUMAN CAPITAL STRATEGY

ACCOR AROUND THE WORLD IN 2004 168,500 people of which Training 49% men 320,129 days of training 51% women More than 120,000 people took Managers part in one or more training course A global network of 11 academies 57% men 2% of payroll dedicated to enhancing employee skills 43% women

France North America 28,500 employees 22,500 employees Employees Employees 47% men 53% women 29% men 71% women Managers Managers Europe (excl. France) 58% men 42% women 47% men 53% women 40,000 employees Training Training 1.9% of payroll 1.5% of payroll Employees Expatriates 43% men 57% women 12 Managers 58% men 42% women Training 2% of payroll Expatriates 132

Asia-Pacific Latin America Africa-Middle East 29,500 employees 33,500 employees 14,500 employees Employees 58% men 42% women Employees Employees Managers 49% men 51% women 79% men 21% women 64% men 36% women Managers Managers Training 38% men 62% women 79% men 21% women 1.3% of payroll Training Training Expatriates 4.8% of payroll 4.1% of payroll 220 Expatriates Expatriates 90 174

168,500 2 5254 5 EMPLOYEES (AT DECEMBER 31, 2004) 72% Hotels

2% Services 3% Cross-functional services (sales, marketing, Academy, IT)

23% Other businesses (travel agencies, casinos, Under 25 25 to 34 35 to 44 45 to 54 55 restaurants and food services, and over onboard train services) EMPLOYEES BY AGE GROUP EMPLOYEES BY BUSINESS

WWW.ACCOR.COM 50 • promotions. managersreceived Inall,54 of whomtwowerepromotedin 2004. years, sevenhotelmanagerpositionsarenowheldbyIndonesians, • Director oftheMercureSeef,anunusualoccurrenceforregion. • Egyptian andonly25areexpatriates. • agers areChinese,oneofwhomiscurrentlyintraining. • A fewexamples: viability. and trainonsiteteams,thusensuringthelocalunit’slong-term Inallregions,expatriatesprovideexpertise December 31,2004. at 628outofaworkforce168,500 totaled expatriate staff in thevicinityofunitwheretheywork.Alwaysexception, membersarerecruiteddirectlyinthehostcountry,Most staff often TO ENSURE DIVERSITY A LARGELY DECENTRAL Hiring October 2004. hotel inMoroccowasappointed attheMercureScheherazade in In China In Morocco In Indonesia In Egypt In Bahrain , 99% ofemployeesarelocalhires,andtwohotelman- , 99% , 3,840 employees(including16hotelmanagers)are , 3,840 , aTurkish womanhasbeenappointed Managing , thefirstwomantobenamed manager ofanAccor , thankstotraininginitiativesdevelopedinrecent IZED HIRING POLICY “10,000 InternshipsinEurope” program.“10,000 During theyear, approximately Accorhotelstookpartinthe 50 trainingsessions were conducted in2004. practical experience inAccorhotelkitchens ordining rooms. Thirteen schools gethands-on vocational Graduates ofrestaurant ing sessionsformore than3,000youngpeopleayear. Accororganizes internshipsandin-companytrain- Education, In France, through apartnershipwiththeNationalMinistryof Examples and awidevarietyofschools alsohelptodiversifythehiringpool. associations,employmentagencies Lastly, partnershipswithNGOs, technical training. essary have applied.Iftheyare,Accorthenprovidesthemwiththenec- they arequalifiedfortheresponsibilitiesofjobwhich they role-playing situationsthatenablethemtodemonstratewhether cant’s educationandjobbackground. Applicantsareputin ple istheso-called“abilities”system,which looksbeyondanappli- Respect fordiversityalsoextendstothehiringprocess.Oneexam- Accorjobs. • Morethan4,000recruiterson on Accorjobs. • 35%ofvacanciesfilleddirectly • 1.3millionvisits. • 100,000applicationsreceived. (20% like-for-like). an increaseof70% over2003 • 10,000jobvacanciesposted, KEY FIGURES FOR 2004: continents. Accorjobs nowoperatesonall of CentralandEasternEurope, Scandinavia andthecountries Spain, Portugal, Switzerland, North America, theMiddleEast, Australia, NewZealand,Japan, as ofthisyearinAfrica, outside theGroup.Accessible for peoplebothwithinand hiring andjobmobilitywebsite December 2000,Accorjobs isa Launched inFrance in ACCORJOBS WWW.ACCOR.COM 51

q STRATEGY DEVELOPING OUR HUMAN CAPITAL STRATEGY

Training and job mobility

Enhancing employee skills improves their professionalism, motivation, loyalty and, as a result, customer service. That’s why Accor considers training and job mobility to be top priorities.

With more than 120,000 employees trained in 2004 (versus 110,000 the previous year), the Group moved closer to its goal of one training session per person per year. To achieve that objective, the Accor Academy has in recent years created a library of CD- ROMs that enables programs in kitchen or restaurant hygiene, for example, to be conducted in the workplace. Besides classroom-type sessions, supervisors also share skills with employee, providing the kind of day-to-day training so important in a services business, especially at Accor. If the time devoted to on- the-job instruction were included, the total number of training hours would be several times greater. In addition, qualification training introduced by the Mercure and Ibis chain enables participants to climb the professional ladder. Overall, 90% of managerial positions are filled in this way. Thanks to the focus on training, employees can look forward to important career advancement opportunities. Each year, more than 20,000 staff members change their position, business or region. To ensure that skills and training correspond to job profiles while Accor for more than a year to be evaluated once a year. Surveys of providing employees with an opportunity to express their career 16,000 employees conducted in 2004 showed that 68% had an aspirations, annual appraisals are held with the employee’s imme- appraisal, 3% more than in 2003. diate superior. The goal is for every employee who has been with For managers, career advancement committees made up of top executives in the concerned channels meet twice a year to ensure continuous tracking of career development.

Échansons Mercure TRAINING AT ACCOR Échansons—named for the traditional cupbearer who fills and Average number of days of formal training per person hands the cup of wine to a dignitary—have served as ambassadors of the Grands Vins Mercure wine list since 1995. At 1.2 days 2.1 days 1.4 days 2 days Regardless of the level of education year-end 2004, some 400 dedicated wine stewards around the in a given region, Accor offers an average of one to two days of world had received special training in this area, with 98 bronze, training to each employee. 42 silver and six gold medals awarded during the year.

The education index is based on a comparison of two types of data: The Acteurs program at Ibis • Child and adult literacy. Acteurs is a qualification training program introduced in Ibis • Percentage of children who have hotels that allows employees to broaden their skills by choos- completed 10th grade. ing a second job function from a list of 11 specialized profes- sions. At year-end 2004, 1,650 Ibis employees in Europe had Source : UNESCO Institute Statistics in Human Development Index, 2004. taken part in the program. In all, 1,200 have been certified as “qualified,” 420 as “experts,” and 120 as “leaders.” Employees Level of education in the countries studied* also receive financial compensation corresponding to their Low* Average* High* Very high* level of certification.

WWW.ACCOR.COM 52 where an These surveyswillbepursuedandextended in2005.InFrance, are abovetheindustryminimumincountry. paidbyAccor oftheworkforceshowedthatyearlysalaries 49% ineightcountriesthataccountfor Another surveyofcompensation job duties. formenandwomenperformingthesame pensation surveyfoundnosignificantdifferences in com- In France,a2004 objectives. and/orquantitative to theachievement ofqualitative with localmarketpractices.Mostalsobenefitfrombonuseslinked inline Accor iscommittedtoofferingallemployeescompensation Compensation tion about Itprovidesaccesstopracticalinforma- opened inNovember2004. provide support,abroad-basedAccorCareerManagementsitewas theinitiativewithregardtohisorhercareerdevelopment.Totake Group’s mobilitypolicyisbasedoneach employee’swillingnessto a gatewaytoallAccorhumanresourcessitesandinformation.The With thehumanresourcesintranetservesas 95,000visitsin2004, MOBILITY JOB PROMOTE TO EFFICIENTLY AN INTRANET bonuses linkedtoindividualand teamperformance. employees alsobenefitfromprofit-sharing programsandannual Manager’s Benchmarks around theworld. trainers andnearly70 partners certifiedsupport trainers, 90 11 centers,73permanent thenetworkcomprised In 2004, access totrainingprograms. subsidiaries andtofacilitating of thevariousdivisionsand the expressedtrainingneeds network isdedicatedtomeeting worldwide Accor Academy geographical presence,the programs andbroad With itswiderangeoftraining WORLDWIDE ACCOR ACADEMY guidelines employee savingsplan (career managementpolicy, hiringcharter, , keyterms)aswell was introducedin1985, initiatives to pursue The Key figures: It alsoclearlydefinestheemployeeandmanager’srespectiveroles. view, Accorjobs,AccorProFiles). jobprofileguide,trainingcatalogue, and subscribed throughaspecialplan Accor shareswere 391,134 atotalof special terms.In2004, to purchase Accor shareson Employees areregularlyinvited SHAREHOLDERS EMPLOYEE Management site. duced toinformemployeesaroundtheworldofAccorCareer tools available to all employees (annual appraisal, careerinter- available toallemployees(annualappraisal, 7,000 visitsinthefirstmonthand4,000posterspro- shareholders. 23,000 employeesareAccor are authorized.Morethan shareholding programs established andemployee where theGroupiswell for employeesin25countries WWW.ACCOR.COM 53

q STRATEGY DEVELOPING OUR HUMAN CAPITAL

Hotels leisure businesses and travel, tourism and also includestravelagencies,restaurants andcasinos. Its uniqueportfoliooftravel,leisureand tourismbusinesses Accor offers hotel stays tailoredtoeach customer’sneeds. With 4,000hotelsworldwide, fromeconomytoupscale, WWW.ACCORHOTELS.COM 160,000 More than with customers in contact employees 55

q HOTELS UPSCALE HOTELS

French “art de vivre”

Sofitelwww.sofitel.com

FRANCE, SOFITEL MARSEILLE VIEUX-PORT

183 hotels 38,098 rooms 52 countries 11 openings

Customers 60% business highlights 40% leisure Accor’s prestige hotel brand continued to progress in 2004, expanding its geographical reach and ➜ Locations in major further enhancing its image. Sofitel has now international cities and prestigious vacation resorts. surpassed the critical mass required to project its global identity. This is reflected in the chain’s rapid ➜ Rooms equipped with all the features you expect rise in Business Travel News’ hotel survey, which • Growing success of sales generated by airline in a world-class hotel, ranks Sofitel second in the upper upscale segment. programs and Sofitel partners, which increased including the revolutionary In the Middle East, the recent successful bid to in volume by more than 60% over 2003. new MyBed concept. operate the Zam Zam Grand Suites Sofitel, ➜ Expressing a distinctly Mecca’s largest, most luxurious hotel, strikingly EXPANSION French “art de vivre”, unique illustrates Sofitel’s arrival among the industry’s 2004 saw 11 major openings. among international upper upscale hotels. foremost brands. In Europe ➜ Sofitel Las Dunas Costa de Marbella (Spain), Restaurants supervised 2004 INNOVATIONS by experienced and up- Sofitel Parma Grand Hotel de la Ville (Italy), • Deployment of the new MyBed concept, offering and-coming chefs, offering Sofitel Wroclaw (Poland), the ultimate in sleeping comfort. fresh, top-quality products, Dorint Sofitel Bayerpost Munich (Germany). original recipes and respect • Launch in the United States and Europe of In Asia-Pacific for local culinary traditions. the new So Boutique on-line shopping experience. Sofitel Wentworth Sydney (Australia), ➜ Refined service, ATTRACTING AND RETAINING CUSTOMERS Sofitel Royal Lagoon Dongguan (China), personalized customer care and access to the latest • Popular promotional offers, with Sofitel Sofitel Grand Park Hefei (China), technological amenities. Weekend Invitations and Getaway Invitations Sofitel Seminyak Bali (Indonesia). for leisure customers and Sofitel Excellence In Africa for business customers. Sofitel L’Amitié Bamako (Mali), • Increase in the number of Sofitel Privileged Sofitel Agadir (Morocco). Guest cardholders, with more than 84,000 new In South America members in 2004. Hotel Madero by Sofitel (Argentina). ■

WWW.ACCORHOTELS.COM 56 and risingyoungstars. ofrenownedchefs talents thanks tothecombined contemporary cuisine, traditional and with menusblending of gourmetrestaurants includes alargenumber world. The network aroundthe reputation helped buildthebrand’s excellence hasalso refined service.Culinary warm welcomeand interior decoration,a characterized byquality French touch offer thedistinctive Domingo. All,however, de OvandoinSanto and theSofitelNicolas Sofitel PalaisJamaïinFez are located,likethe buildings inwhich they others forthelegendary New York andChicago, modern propertiesin and design,liketheultra- architecture outstanding Some arenotedfortheir its historyandsetting. own personality, reflecting Each hotelprojectsits Cambodia andEgypt. Mauritius, theCaribbean, locations, such as asinprimeresort as well other majorcities, and in theworld’scapitals international clientele Sofitel networkhostsan luxury hotelchain. The the world’sfifth-largest prestige brandand Europe, SofitelisAccor’s yearsagoin Created 40 PROFILE OT EMARBELLA DE COSTA SPAIN with MyBed. rooms ofhotelsequipped in thelobbiesandguest – Leaflets available and elsewhere inEurope. inFrance establishments – Hangingscrolls onSofitel Hamburg. Cannes, Lyon, Parisand European cities,including – Giantbannersinleading and businessmagazines. and European consumer – AdvertisementsinFrench COUNTRIES AND OTHEREUROPEAN INFRANCE OF MyBed FOR THELAUNCH ADVERTISING CAMPAIGN COMMUNICATION , OIE A DUNAS LAS SOFITEL – OITSFTLBAYERPOST SOFITEL DORINT GERMANY convert theirAmericanExpresspointsintoComplimentspoints. Privileged GuestGoldCardandcan Card qualifyfortheSofitel whereby EuropeanholdersoftheAmericanExpressCenturion Airways. AnagreementwassignedwithAmericanExpress Czech Airlines,DeltaJapanQantasandThai Alitalia, AmericanAirlines,Aeromexico, CathayPacific, CSA intheirloyaltyprograms,joiningAirFrance, include Sofitel Singapore Airlineshasbeenaddedtothelistofcarriersthat NEW ANDONGOINGPARTNERSHIPS IN2004 the So Boutique catalogue. Boutique the So The objectsdisplayedonthisandthefacing pagearefrom contemporary interiordecoration. façade thatleadsintoaremarkablyrefinedhotelfeaturing highly of theRoyalBavarianMail,buildingincludesasuperbneoclassical BayerpostMunich. Formerlyopening theDorintSofitel theoffices For havecarriedoutajointhotelproject, thefirsttime,DorintandSofitel ranks amongtheleadersininternationalupperupscalesegment. the newhotelsgiveimportantmomentumtochain, which now in Germany, theNetherlands, AustriaandSpain’sBalearicIslands, in majorbusinesscitiesandoutstandingvacationdestinations network.Located hotelswereaddedtotheSofitel 21 DorintSofitel The Sofitel network expands , , MUNICH www.soboutique.com ■ WWW.ACCORHOTELS.COM 57

q HOTELS SOFITEL MIDSCALE HOTELS

Relax with us

Novotelwww.novotel.com

FRANCE, NOVOTEL ORLY, RUNGIS

396 hotels 68,340 rooms 58 countries 22 openings NOVOTEL CAFÉ: A NEW RESTAURANT CONCEPT IN FRANCE Customers 62% business • A key component of the Novotel brand and its 38% leisure ➜ Spacious rooms image, the chain’s restaurant concept has been PROFILE offering maximum entirely redesigned, with the goal of revitalizing Created in 1967 to comfort for families and and deepening relations with customers. ➜ deliver consistent business travelers alike. The food service • available around the clock. High-quality dishes and consistent service are services to business ➜ Family offer: up to ensured by the latest preparation methods and ➜ travelers around the two children under Other services include innovative menus developed with the support world, Novotel soon 16 can stay for free parking facilities and began to extend its offer in their parents’ room recreational areas, with of Lenôtre’s skills and expertise. to other segments. and are entitled to a a garden, swimming • The food services offering takes into account In 1984, for example, it free breakfast buffet pool or fitness center changing consumer habits. For example, most with the family. in most hotels. first attracted families by dishes are prepared on a Spanish grill, or allowing children to stay “plancha,” to meet customer demand for naturally, for free. In 2004, the chain pursued the new simply prepared foods. Customers can have a phase in its meal whenever they like—in their room, with development, launched highlights the Coffret Liberté meal box or via room service, in 2002, of investing in in the Novotel Café, with its multiple dining city-center locations in OPENINGS options, or in the traditional Côté Jardin large metropolitan cities. In 2004, Novotel’s European network expanded restaurants (still available in some hotels that also Following the upgrade of room design with the rapidly, with 22 new openings, notably the Novotel feature the Novotel Café). At year end, 40 Novotel Novation room, a new Vilnius in the Lithuanian capital, the chain’s first Cafés were up and running in France, 60 chefs restaurant concept location in the Baltic countries. Other openings had been trained in “à la plancha” cooking —Novotel Café—was included three hotels each in France, Germany, Spain techniques, 210 chefs had taken part in special introduced in France and the United Kingdom, two in Switzerland and cooking classes led by Lenôtre teams and during the year. one in Italy. Outside Europe, hotels were opened 200 serving staff had received training in ways to in China, Indonesia, Nigeria and French Polynesia. promote Novotel’s new restaurant concept. ■

WWW.ACCORHOTELS.COM 58 from emergencyautorepairstoflowerdelivery. array ofpersonalizedassistanceservices,ranging services. These includeaDVD playeraswellan flexible discountratesaswellexclusive Suitehotel hasintroducedaspecialoffer, featuring For consecutivenights, customersstaying30 PARTNERSHIP OFALONG-STAYLAUNCH IN OFFER, a scheduled openinginMunich inJune2005. with openingsinHanoverandBerlin2004 Suitehotel pursueditsexpansion inGermany, highlights FRANCE , SUITEHOTEL , WITH AI RUEIL PARIS BIEN-ÊTRE ÀLACARTE BIEN-ÊTRE - MALMAISON Suitehotel www. A newwayof hotel living suite-hotel.com the MEXX ready-to-wearbrand. the MEXX every sixmonths,thankstoanagreementwith in thisareaandareentitledtochange uniforms services. Employeesaregivenspecialtraining more personalizedreceptionandhospitality traditional hotelskills—withthegoalofproviding is intendedtoinstillnewattitudes—alongside Prepared bySuitehotelmanagers,thecharter SI HOSPITALITY CHARTER SUITEHOTEL and Nancy(France). Geneva (Switzerland),andCannes, Montpellier Suitehotel openingsin2005:Munich (Germany), EUROPE IN 20HOTELS OVER SOON ■ in themorning. coffee andcroissants ➜ on Thursday evenings. free relaxingmassages fitness facilities,and outlet, businessand Gourmande Boutique clock, plusalounge,bar, lobby, openaroundthe ➜ Internet hook-up. telephones andadirect with voicemail,two ➜ in thesamecategory. of aconventionalroom for lessthantheprice modular suite,often ➜ Complimentary A multi-functional Direct phonelines A 30-square-meter GNED WWW.ACCORHOTELS.COM Weekend” offer. nights, plusthe“Grand consecutive of 4,7or30 ➜ at anytime. ➜ 21% 79% Customers Hanover, Berlin Paris Porte delaChapelle, 3 3 71 1,8 13 Germany, Austria the customer’sneeds. leisure, dependingon arranged forworkor technology and canbe the latestcommunication are equippedwith the rooms high qualitymaterials, modular suites.Builtwith 30-square-meter comprised offunctional, innovative hotelconcept Suitehotel offersan The newestAccorchain, Breakfast available PROFILE Discount ratesforstays openings: countries: hotels business leisure rooms France, 59

q HOTELS NOVOTEL SUITEHOTEL MIDSCALE HOTELS

For the best of the region

Mercurewww.mercure.com

FRANCE, MERCURE, MARSEILLE BEAUVAU VIEUX-PORT

720 hotels (including the Parthenon chain) ➜ High-quality dishes that showcase regional 85,352 rooms recipes and local 45 countries products. 48 openings ➜ Served by trained wine stewards, Customers Mercure’s fine wines 55% business are chosen in blind ➜ Comfortable, 45% leisure tastings by a panel PROFILE impeccably equipped of experts and Created in 1973, the rooms. knowledgeable Mercure chain was ➜ Three easy- customers. acquired in 1975, when to-identify levels of it numbered 14 hotels comfort, from two in France. Since then, to four stars. it has been expanded highlights through a large number of acquisitions and EXPANDING THE NETWORK franchise agreements to become Europe’s • Opening in October 2004 of the Mercure Ginza second biggest hotel in Japan. The 208-room hotel is located near chain, regardless of the International Forum in downtown Tokyo. segment, and the largest • 31 Dorint hotels join the Mercure network, now in the midscale market. Its network of 720 hotels Germany’s biggest with 130 locations in 80 cities. includes a number of • In France, the Grand Hôtel Beauvau in Marseille chains, including is given a complete overhaul. A REVITALIZED GRAPHIC IDENTITY Parthenon in Brazil, Orbis in Poland and All Seasons DEPLOYMENT OF THE MERCURE HOTEL Mercure has refocused its communication on in Australia. The brand’s CHARTER the brand’s “gratification” aspect. The logo and distinguishing feature is The charter expresses the brand’s commitments initial letter have been reworked to express the that each hotel, through in terms of the product, while capitalizing values of wellbeing and enjoyment delivered by its its decor and activities, on the diversity and personality of its hotels. hotel services. The new signature received a gold expresses the unique culture of its city or region. It also includes quality standards, presented as medal in the “applied graphic identity” category recommendations to be followed. at the Top Com Awards. ■

WWW.ACCORHOTELS.COM 60 BRAZIL receptions. for meetingsandsmall and modularareas services, fitnessfacilities room service,food services, laundryand 24-hour concierge housekeeping, reception, hospitality, including services andhotel-style apartments, withrelated studios andone-bedroom It offersfullyequipped and leisuretravelers. caters tobothbusiness locations extended stay Parthenon chain of Created inBrazil,the PROFILE The place to meet Live thecityto thef , ATEO OUETLFA N CONVENTION AND FLAT MONUMENTAL PARTHENON Atria www. Parthenon www. accorhotels.com mercure.com centers inFrance ➜ 12 conference dos Campos,RiodeJaneiroandFortaleza. other establishmentsinCuritiba,Recife, SãoJosé in Pasargada Vila Velha andisunderwayinfive Renovation isnearlycompletedattheParthenon RENOVATIONS Parthenon BotafogoRiodeJaneiro. Parthenon The Future Manaus, Parthenon MonumentalSãoCaetano, OPENINGS highlights , Ã ATN OSUL DO CAETANO SÃO an independentaccreditationorganization. Qualicert, that hasbeencertifiedbySGS “satisfaction oryourmoneyback” guarantee facilities, Atria offers customersanexclusive the samelocation.Inadditiontoconference conference roomsandreceptionareas—allin control room,largeadjoininglobby, modular with anamphitheaterorauditorium,audiovisual conference centers equippedforlargemeetings, congresses andconventions.The hotelsinclude and Mercurehotelsspeciallydesignedtohost The Atria labeldesignates anumberofNovotel ullest For SãoPaulo’s 450 SÃOPAULO IN CAMPAIGN PROMOTIONAL redesigned toaccommodaterecyclablewaste. customers andchambermaid cartshavebeen Dedicated litterbinshavebeeninstalledfor WASTE RECYCLING and in-flightmagazines. alternative andhavebeenplacedintourist Paulo—the adspromotetheParthenon lodging Curitiba, BeloHorizonte,Porto AlegreorSão Tailored toeach urbanmarket—RiodeJaneiro, new “Livethecitytofullest”positioning. The recentcampaignemphasizesthechain’s ADVERT NEW the promotiongeneratedsome10,000roomnights. São Paulo, plusatourofthecity. Inninemonths, to aspecialrateinanyof17Parthenon unitsin or busticket atthereceptiondeskwereentitled city. Guestswhopresented atollreceiptorplane to encouragevisitorsspendaweekendinthe “Vive SãoPaulo Parthenon” offer wasintroduced Local customerbase 3 2 stay locations 62 and France openings countries: ■ extended- WWW.ACCORHOTELS.COM ISING CAMPAIGN Brazil th anniversary, aspecial ■ 61

q HOTELS MERCURE PARTHENON ATRIA ECONOMY HOTELS

Full service at the right price

Ibiswww.ibishotel.com

PROFILE Created by Accor, Ibis celebrated its 30th anniversary in 2004. The chain is widely recognized for its excellent value for money and convenient locations. Europe’s largest economy hotel network, Ibis is expanding its coverage of the continent through investments in leading NETHERLANDS, IBIS DEN HAAG CENTER, THE HAGUE city centers in Spain and the United Kingdom. The 692 hotels of which brand is also accelerating 348 in France its entry into emerging markets by opening large 75,602 rooms capacity hotels, with a 36 countries focus on China, India 48 openings highlights and Brazil. FASTER GROWTH IN THE GLOBAL Customers MARKETPLACE 55% business During the year, Ibis actively pursued its European 45% leisure expansion in France, Germany, the United Kingdom and Spain, and extended its network in Brazil, ➜ Comfortable, Africa and Eastern Europe. It also launched tastefully decorated rooms with bathrooms, operations in China, with the opening of the Ibis telephones and TVs. Tianjin, and will open roughly 50 hotels in ➜ With the 15-minute ➜ All-you-can-eat the country by the end of 2010. satisfaction guarantee, breakfast buffet if a minor problem with PROMOTING WEEKEND AND VACATION STAY from 6:30 to 10:00 am, the hotel isn’t solved plus “early bird” (4:00 The ongoing weekend rate strategy was supported in 15 minutes, the to 6:30 am) and “late customer stays for free. by the chain’s sponsorship of the “weekend agenda” riser” (10:00 am to program on the France 2 television channel and 12:00 pm) offers. ➜ Reception, snack and beverage service a summer advertising campaign in Europe. ➜ A friendly bar area around the clock. and original food service DIVERSIFYING THE FOOD SERVICE OFFER concepts that vary by ➜ Quality guaranteed by To offer customers something new and different, region and season. ISO 9001 certification. a number of innovative food concepts were introduced—the Vins et Compagnie Café, the Pasta Café and the Rendez-vous Bar. INVOLVING TEAMS IN THE CUSTOMER SATISFACTION PROCESS Environmental commitment A special competition, called the Golden Trees, was organized to reward outstanding employee In 2004, 19 Ibis hotels earned ISO 14001 certification. The accreditation ideas and best practices in the area of quality. The Extraordinary Garden program, launched in confirms the chain’s environmental commitments and represents a corporate 2003, was actively pursued in 2004, with 230 Ibis citizenship pledge to customers. ■ team members meeting in June to exchange ideas on ways to improve service to customers and help them to “simply enjoy the travel experience.” ■

WWW.ACCORHOTELS.COM 62 Etap Hotel Formule 1 www. www. 24 11 24,901 311 for nearly20years. in thebudgetsegment has beenthebenchmark innovation, Formule 1 Accor’s capacityfor of A trueexample ( than 100FF” to threepeopleforless roomforup comfortable was thefirsttooffer“a segment. The chain the trulylow-costhotel Accorpioneered 1984, Formule 1conceptin With thecreationof 40% 60% Customers PROFILE Sleep well atthelowest cost etaphotel.com hotelformule1.com openings countries You are attheright place leisure business hotels rooms € 15). around theclock. room salesavailable the country).Automated depending onthedayor (hours mayvary from 5:00to10:00pm to11:00amand from 6:30 ➜ of TVchannels. ➜ breakfast buffet. ➜ ➜ people. rooms foruptothree ➜ around theclock. room salesavailable the country).Automated depending onthedayor (hours mayvary and from5:00to9:00pm am to9:30 from 6:30 ➜ and atelevision. featuring basiccomfort ➜ Reception deskopen Wide choice All-you-can-eat Integrated bathroom. Cozy, comfortable Reception deskopen Functional rooms 45% 55% Customers São PauloBrazil King Cross Australia, 2 12 28,423 372 and nearairports. along majorroadways locations incitycenters, areas,with metropolitan strategy focusesonlarge The chain’s development in EuropeandIsrael. and leisuretravelers solutions forbusiness affordable accommodation network providesvery Hotel theEtap 1991, Created byAccorin PROFILE openings standards. cleanliness andhygiene and thehighest radius oftenkilometers lowest rateswithina guarantees themarket’s customers: Formule 1 commitment to ➜ can-eat breakfastbuffet. ➜ countries A price/cleanliness Self-service, all-you- hotels leisure business rooms FRANCE are purchased throughfairtradeagreements. In France, breakfastcoffee, tea,andchocolate Supporting fairtrade reservation forafuturestay. ormakea (if theEtapHotelisfullybooked) directly inthehoteloranotherAccor aroom reception desks,customerscanbook Thanks toanewserviceavailableatEtapHotel service Deployment ofanewbooking highlights Formule 1: Germany, BelgiumandSwitzerland. Hotel: Etap EXPANSION (117 rooms) and Brazil (399 rooms). (117 rooms)andBrazil(399 , TPHOTEL ETAP 2 hotelsopened,inAustralia 24 hotelsopenedinFrance, WWW.ACCORHOTELS.COM , LONS - LE - SAUNIER CERGY - OTIESAINT PONTOISE FRANCE ■ , FORMULE - MARTIN 63 1

q HOTELS IBIS ETAP FORMULE 1 ECONOMY HOTELS

347 hotels 38,018 rooms Redesigned, Rededicated… United States Red Roof Inn 8 openings

Customers 55% business 45% leisure Redwww.redroof.com Roof Inn ➜ A consistent product aimed at business travelers delivering a mid-scale experience at an economy price. ➜ Services include ➜ RediCard Preferred free local phone calls, Member program, voicemail, data ports, offering one night free complimentary coffee for every ten-night stay and morning newspaper, (based on an average and cable television room rate of $50). featuring HBO, CNN ➜ Wireless broadband and more. Internet access in ➜ Business King rooms all rooms and lobby with a king-size bed, area based on a new large-screen TV, partnership with spacious work area, T-Mobile, the leading ergonomic chair, and provider of wireless UNITED STATES, RED ROOF INN, NEW JERSEY desk lamp. Internet service.

PROFILE support for this new service offering and creating Located mainly in the highlights differentiation with competitors whose solutions do not always cover the entire location. Midwest, Northeast and • Opening of the first location in Alaska, Southern United States, in Anchorage. A NEW LOGO Red Roof Inns joined the Accor Group in 1999. RENOVATION PROGRAM CONTINUES Introduced in 2004, the new Red Roof Inn logo is The chain offers consistent designed to contemporize the brand’s image while During 2005, Red Roof Inn will reach the halfway quality and affordable strengthening the key components of the chain’s point in the multi-year project to renovate inns prices. The RediCard graphic identity. It is used on new signage to nationwide. Upgrades to both furniture and room customer loyalty program indicate locations that have been entirely renovated. and the chain’s Web- design are included in the renovation effort. Brand advertising for 2005 focuses on the new based marketing initiatives have enabled Red Roof SUCCESSFUL PROMOTIONAL PROGRAMS logo, the ongoing renovation of all Red Roof Inns Inns to attract and retain • Launched in April 2001, the RediCard Preferred nationwide, and the chain’s renewed commitment a loyal base of mostly Member program continued to gain popularity. to providing guests with excellent service—all business customers. With 680,000 members, it generated more than of which is embodied in the new brand tagline, Over the next three years, 25% of total Red Roof Inn revenue in 2004, “Redesigned, Rededicated… Red Roof Inn”. ■ the goal is to complete the Red’s New Rooms compared with 22% in the previous year. renovation project at • The on-going Red’s Hot Deals web-based existing properties and program generated nearly half of total website continue to build a bookings on redroof.com. In 2004, Internet sales network of 500 hotels, increased by 19% over 2003 and accounted mainly through franchise DOMINO’S PIZZA agreements. for 12% of total revenue. Red Roof Inn, Studio 6 and Motel 6 have signed a PROVIDING WIFI INTERNET ACCESS contract with Domino’s Pizza. The agreement calls The chain finalized an agreement with T-Mobile for the nationwide pizza brand to be promoted on to supply T-Mobile Hotspot service at all company and franchise inn properties. T-Mobile is responsible key cards and point-of-sale material in the three for all hardware costs associated with the Accor North America economy chains. In exchange, implementation of the service and has agreed Domino’s Pizza agreed to cover the cost of the key to cross-market the Red Roof Inn brand in all its card program, resulting in a $1.5-million cost advertising materials, greatly increasing media savings to Accor over the lifetime of the agreement.

WWW.ACCORHOTELS.COM 64 Motel 6 Motel Studio 6 Studio Extend your stay, notyour budget We’ll leave thelight onfor you www. www. and Canada. in theUnitedStates pursue itsdevelopment The chain’s objective isto communication media. website andinother hotel guides,onits included Studio6inits Motel 6,which has have beencreatedwith A broadarrayofsynergies road forlongerperiods. travelers whoareonthe the specialneedsof Studio6meets the US. economy propertiesin to expanditsrangeof lodging facilities”in1999 “economy extendedstay Studio 6chain of Accor createdthe 70% 30% Customers 26 United StatesandCanada 2 87,860 852 PROFILE countries: staystudio6.com motel6.com openings leisure hotels business rooms areas, andgranitecountertops. Measuring25 mirrored closetdoors,largereating andwork feature 63-centimeterTVscreens,full-length for futureopeningsandrenovations. The rooms • Jackson, Mississippi. • highlights awareness oftheMotel6brand. and partnershipwiththeNationalHotRodAssociationhelpedbuild Campaigns focusingonthechain’s pet-friendlypolicies,valueformoney COMMUNICATION IN of totalbrandsales. In 2004,Internetsalesroseby23%over2003andaccountedfor8% SALES INTERNET IN INCREASE and inAlberta,Canada. • highlights A newguestroomdécorpackage wasdeveloped In July, a79-unit franchise locationopenedin Opening ofthefirstMotel6locationsinAlaska,Anchorage, NTDSTATES UNITED , STUDIO 6, ITIATIVES ATBRUNSWICK EAST NTDSTATES UNITED ■ , , E JERSEY NEW MOTEL 6, ORLANDO 30% 70% Customers 2 United StatesandCanada 2 5,088 41 openings countries: utensils anddishes. kitchen, includingall area andfully-equipped comfortable sleeping meter roomwitha ➜ number ofqualifiedsalesleads. Human ResourceManagement generatedalarge for with Corporatehousing.comand Society on behalfofthebrandin2004. Partnerships made atotalofmorethan25,000 salescalls level salesinitiatives.Property generalmanagers • the standardMotel6room. to 32squaremeters,thestudiosarelargerthan Primary marketing effortsfocusedonproperty hotels Spacious, 28-square- business leisure rooms WWW.ACCORHOTELS.COM four years. 1,000 locationswithin to haveanetworkof Canada, itexpects and in boththeUS through franchising development sustained firm. Byfocusingon research andconsulting travel/tourism market Shifflet &Associates segment bytheD.K. in theeconomylodging in OverallAdAwareness ranked numberone Canada. The chain is andinto United States extended acrossthe network hassincebeen chain,” theMotel6 price ofanynational rooms atthelowest to offer“comfortable California, Barbara, Santa in Founded in1962 PROFILE ➜ ➜ housekeeping services. facilities andweekly ➜ ➜ and localtelephonecalls. television, voicemail ➜ Large workarea. Pets allowed. Weekly anddailyrates. Guest laundry Free satellite ■ 65

q HOTELS RED ROOF INN MOTEL 6 STUDIO 6 LEISURE AND TOURISM

PROFILE FRANCE, SOFITEL THALASSA PORTICCIO, CORSICA Located in the world’s most beautiful tourist sites, the 200 Accor Vacances destinations include hotels and facilities designed for relaxation, fitness and an array of vacation activities. Whether at the seaside or in the mountains, in France, Morocco, Mauritius, Brazil or Vietnam, Accor Vacances sites are more than just hotels. Fully dedicated to customer wellness, they reflect a focus on quality, The pleasure of vacationing at your own pace combining attention to detail and comfort elegantly interpreted by the Sofitel, Dorint, Novotel, Mercure or Coralia Club brands, as well as the powerful Accorwww.accorvacances.com Vacances commitment of efficient, discreet, highly professional teams who STRENGTHENED SALES INITIATIVES offer vacationers the For the year, Accor Vacances reported a sharp pleasure of doing what ➜ 200 vacation 10% increase in business volume, thanks to: they want, when they destinations in more • Marketing agreements with leading tour operators want. With its broad than 40 countries like TUI, Jet Tours, Thomas Cook, Kuoni and Étapes array of hotels, Accor around the world. Vacances has holiday Nouvelles (First Choice Group). solutions for all tastes • Ongoing “airplane plus hotel” synergies and budgets. with Go Voyages. • A strengthened distribution network, with the creation of Alliance T. in Europe, comprised highlights of nearly 6,000 travel agencies operated by Carlson ONGOING EXPANSION Wagonlit Travel, Frantour, Protravel, Selectour, RTK, Flash Travel, Espirito Santo and Globalia. During the year, Accor Vacances pursued its In 2005, Accor Vacances will further enhance development, with the goal of setting a new global this system by accelerating the deployment of its standard in vacation hotels. This ambition was Web-based sales strategy. ■ reflected in the recent openings in Sharm-el- Sheikh, Marbella, La Plagne, Le Touquet, Agadir and Bora Bora, as well as in expansion projects The agreement signed in 2004 by Accor and Club in Cairo, Ouarzazate, Djerba, Queenstown, Méditerranée provide the Fiji Islands and Phi Phi Don, Thailand. Backed both partners’ customers by high standards in quality, comfort and service, with a wider choice, ranging from “à la carte” Accor Vacances’ personalized offer allows vacations in Accor customers to choose from a wide range of hotel Vacances hotels to all- inclusive holidays in Club vacations around the world. Méditerranée villages.

“Playing with nature, celebrating cultures”

For each destination, Accor Vacances offers a diversified, carefully planned portfolio of sports and leisure activities for customers of all ages. Children have their own Baboo Village activity centers, where they can enjoy themselves in safe surroundings. One innovative program, called “Playing with nature, celebrating cultures,” uses games, excursions and entertainment to help children discover the host country’s culture and natural environment. ■

WWW.ACCOR.COM 66 France andSpain. Vacances hotelsinMauritius,Tunisia, Morocco, expertise. The newconceptisavailableinAccor as wellAccorThalassa’s seawatertherapy fragrances, essentialoilsandlocal specialties, formulasthatincludeproducts, elaborate basic spatreatmentstheywantoroptformore by AccorThalassa. Customerscanchoose the to createanewrelaxationconceptcalledLe Spa Accor Thalassa hasleverageditsextensive skills LE SPA BY ACCOR THALASSA healthier lifestyles. with personalhealthpracticestopromote combines interrelated,interactivespatreatments by AccorThalassa isasix-dayprogramthat rheumatologists andsociologists,LaCure dermatologists, physicaltherapists, a scientificcouncilof16leadingcardiologists, Developed withtheExpertsCommittee, BY ACCOR THALASSA LA CURE highlights FRANCE Accor Thalassa www. Time to feelgood , accorthalassa.com CO THALASSA ACCOR ➜ and aroundtheworld. ➜ 50 sitesinFrance 50 10 countries. , QUIBERON their day-to-dayoperations. integrate environmentally-friendlypracticesinto by AccorThalassa institutesandhotelsto This certificationprogramreflectsacommitment in France tobeaccreditedbytheendof2007. certification, thegoalisforallAccorThalassa sites environmental 14001 has receivedISO Now thattheAccorThalassa QuiberoninBrittany CERTIFICATION 14001 ISO postings onAccorwebsites. events withCarlsonWagonlit Travel andProtravel travelagencies,andspecial promotional offers, direct-to-consumercampaigns, mediarelationsprograms, and itsknow-how. Afullrangeofresourceshas beendeployed,including to takepartinananniversarycelebrationdesignedbuildawareness ofthebrand From October 10,2004toFebruary 10,2005,AccorThalassa invitedcustomers Accor Thalassa’s 20 ■ ■ th anniversary WWW.ACCOR.COM instructors. nutritionists andsports therapists, hydrotherapists, qualified teamofphysical which aremanagedbya and treatmentprograms, of itsproducts,facilities guarantees thequality spas—Accor Thalassa spring therapyandbeauty —seawater spas,thermal In itsareasofexpertise charter Quality Thalassa Institutebrand. Thalassa marketed undertheAccor line ofcosmetics, developed anexclusive healthy menus.Ithasalso services, andtraditionalor teams, high-quality programs, dedicated exclusive treatment and hotelamenities, offers highlyrefinedspa comfort. AccorThalassa ofhotel usual standards withAccor’s packaged spa treatmentsare spring therapyandbeauty seawater therapy, thermal around theworld.Its residences inFranceand Accorhotelsand in 40 and wellnesscapabilities deployed itsfitness,health has Accor Thalassa For morethan20years PROFILE 67

q OTHER BUSINESSES ACCOR VACANCES ACCOR THALASSA A TRAVEL AND TOURISM PARTNER

100 villages in highlights 40 countries around the world AN ALLIANCE WITH ACCOR 11 villas Following the European Commission’s authorization The Club Med 2 on October 19, 2004 of Accor’s acquisition cruise ship of a 28.9% stake in Club Méditerranée, the two PROFILE companies have defined priority programs to be implemented and identified the synergies Founded in 1950, Club Méditerranée is the world to be developed. These synergies will contribute leader in all-inclusive to both partners’ earnings, with a combined net holiday packages. gain of €46 million forecast in 2007, of which Positioned in the upmarket, €30 million for Club Méditerranée and friendly, multicultural €16 million for Accor. segment, it operates in 40 countries, with roughly 100 vacation villages and the Club Med 2 cruise ship. Club Méditerranée vacations are distributed by more than 1,500 travel agencies in both direct and indirect networks. It is also active in strategically aligned businesses that enjoy strong brand recognition. Its Jet tours subsidiary is France’s leading tour operator and Club Med Gym is the benchmark in urban fitness centers.

WWW.ACCOR.COM 68 attractions. tourist followed byadescriptionofneighboring time, villagepresentationsinthe catalogueare array ofactivitiesandexcursions. Also,for the first locations, sports,relaxation,social life, abroad segmented intosixcustomerdesires:outstanding The emphasis isonamorepersonalizedoffer, newandrepeatcustomers. attracting both the Club’supmarketstrategy, withthegoalof summer 2005Trident cataloguealsoillustrates desires. The firstdirectlinktocustomers,the A newcatalogue, desires andbudget. customers toplanandcustomizevacationstheir introduced inwinter2004,which makesiteasyfor the highlypopularBookingBonussystem, make itevenmoreattractive.Onenewfeature is streamlined andcompetitivelydifferentiated to The ClubMéditerranéevacationportfoliohasbeen A clearer, CATALOGUE ANEW AND OFFER A NEW and privategardens. premium hotelservices,includingterraces suitesoffersThis uniquevenuewithits60 in Marrakech, featuring theClub’sFinestconcept. as doestheFebruary 2005openingofLe Riad a goodexample ofthiscommitmenttoexcellence, overseen bydecoratorJacquesGarcia,provides renovation oftheChamonixMont-Blancvillage, Among themountainvillages,extension and exceptional locationsinprestigedestinations. services tocapturethefullvalueofClub’s villages illustrateastrategyofdeliveringpremium were inthe3and4-Trident categories.The new ofallvillages As ofDecember31,2004,90% in MoroccoandElGounaontheRedSeaEgypt. villages wereopened:Marrakech LaPalmeraie and ByssatisinTunisia. Two new3and4-Trident Turquoise—the Club’sflagshipsiteintheAmericas— Beach inIsrael, CheratingBeach inMalaysia, with therestructuringoflargevillageslikeCoral In 2004,theupmarketstrategywasdeployed, renovated,18upgradedand50closed. created, 60 base wasextensively transformed,with18villages and2004,theClubMedproperty Between 1998 PORTFOLIO VILLAGE RENOVATED ENHANCED, AN EXPANDED, aligned, morepersonalizedoffer. ■ segmented bycustomer experience. even more incomparable provide customerswithan develop theirskillsand appraisals tohelpthem revamped performance from specialtrainingand vision, GOswillbenefit in ClubMéditerranée’snew of tomorrow. Fully involved theClub suggestions about invited tosubmittheir several countrieswere in 3,000 GOsandGEs multi-cultural offering, an upmarket,friendly, provide customerswith To enabletheClubto corporate project. the Incomparable” the “SettingCoursefor a wealthofideasto Employés) havecontributed (Gentils and GEs (Gentils Organisateurs) management, theGOs originated withsenior Although thestrategy PROJECT CORPORATE INCOMPARABLE” FOR THE “SETTING COURSE LAUNCH OFTHE beginning insummer2005. will befeatured inallEuropeanvillages seen intheEuropeantourismindustry, The concept,which untilnowwas rarely concept, whereitprovedequallypopular. four adultvillagesinEuropeastheFreestyle by 4.8points.In2004,itwasextended to customers by14.6%andtheoccupancyrate increase roomnightsby12.3%,total and snacks inthepackage price,helpedto concept, which includesopenbarservice in 2003,theTotal AllInclusivevacation Successfully introducedintheAmericas of the all-inclusive system Gradual extension WWW.ACCOR.COM 69

q OTHER BUSINESSES CLUB MÉDITERRANÉE LEISURE AND TOURISM

Carlsonwww.carlsonwagonlit.com Wagonlit Travel FRANCE, NOVOTEL, PARIS-LA DÉFENSE

➜ $19 billion in business ➜ 50,000 corporate volume (including partners customers, including and subsidiaries). 60 of the 100 largest companies as ranked by ➜ No. 1 in Europe, Asia- Fortune and a large number Pacific and Latin America of small and medium- and No. 2 or 3 in North sized enterprises. America. ➜ Present in ➜ Second largest on-line 140 countries, of which business travel agency. 40 through wholly-owned or joint subsidiaries. highlights ➜ 13,000 employees. MARKET TURNAROUND The worldwide travel market returned to growth Study shows Carlson Wagonlit Travel to be the most in 2004 and is expected to generate sales of nearly $1 trillion in 2007, of which 40% in the efficient hotel supplier for companies business segment. CWT recently conducted a study comparing online travel agencies, hotel chain SHARP INCREASE IN BUSINESS VOLUME websites and its own operations to learn which hotel distribution channels offer In 2004, CWT reported a 29% increase in companies the best rates. Based on a test sample of 2,500 cities, hotels and business volume in dollars at current exchange rates and generated more than $1.3 billion in new dates, the study showed that CWT had the lowest prices 70% of the time, versus business through contracts with Adidas-Salomon, 10% for on-line travel agencies, with prices that were 17% lower on average CSC, the European Commission, JP Morgan and than those offered by agencies operating exclusively on the Web. ■ Oracle, among others. Business volume in the Asia-Pacific region rose 51% for the year, surpassing $1.2 billion for the first time. STRENGTHENED PRESENCE IN THE US Carlson Wagonlit Travel and the leisure market AND EUROPE CWT is also active in the leisure market in certain countries, notably France Protravel in France and Maritz Corporate Travel in and Belgium, where it owns some 550 agencies. Alongside Selectour, the the United States were successfully integrated into the CWT network. Both enjoyed especially company is part of the Alliance T. network of more than 1,100 agencies high-customer retention rates of, respectively, in France. This leisure presence gives CWT considerable potential for 98% and 99%. Germany’s ONboard was also synergies with Club Méditerranée. ■ acquired during the year.

WWW.ACCOR.COM 70 and security-relatedservices. • reengineering andbusinessprocessoutsourcing. sourcing, systemsintegration,process consulting products optimize theirtravelbudgets • consultant intermsofcost,qualityandservice. • STRATE7 KEY • developments, CWT’s missionistobe: plan calledCWT 007. Inresponsetomarket Wagonlit Travel outlinedathree-yearstrategyand President andChiefExecutiveOfficer, Carlson Following theappointmentofHubertJolyas plan and Strategy • of recent acquisitions. • andprocessautomation. self-booking • and outsourcingservices. • market. (SME) • and globalproductsuite. global companies, • on CWT’s uniqueassetsandcapabilities. The preferred providerof The bestpartnerinhelpingcustomersto Complete thesuccessful The most Lead Expand Target Address Expand CWT’s penetrationofthe Further consolidate CWT’s agency. based businesstravel second-largest Web- CWT istheworld’s ayear,transactions two milliononline to travelers.With high-quality service the worldandtodeliver and budgetsaround their travelprocedures institutions optimize to helpcompaniesand America. Itsmissionis Asia-Pacific andLatin ranked inEurope, companies andistop- travel management world’s twoleading (CWT) isoneofthe Carlson Wagonlit Travel Carlson Companies, subsidiary ofAccorand An equallyowned PROFILE in theareasof opportunities withhotels, consulting, key geographicopportunities. effective travelmanagement GIES leveraging itsglobalfootprint program management and on-line services, services integration traveler assistance penetration of , witharangeof mid-sized that cover capitalizing ■ Go Voyages Go www. and touroperators. websites, callcenters through travelagencies, flights, andmarketsthem scheduled andcharter destinations, using more than1,000 to holiday packages and hotel, carrental popularly-priced airfare, company putstogether booking engines.The development ofInternet products andthe leader inflight-only emerged asFrance’s Go Voyages has In lessthansevenyears, ➜ ➜ ➜ ➜ ➜ ➜ PROFILE 37% directsales 42% ofsalestodistributors 21% ofsalestowholesalers(touroperators) 8,000 hotelscatalogued 1,000 destinationsserved 560,000 passengerscarried 560,000 govoyages.com 24%) andthehighestnetmargin ofthetopsix. terms ofrevenues,withthesharpest rise(up became France’s sixth-largesttouroperator in since thecompany’sfounding.As aresult,it year ofearningsgrowth,itsseventh consecutive with double-digitincreaseinrevenuesandanother In 2004,GoVoyages strengtheneditsposition AND EARNINGS INCREASES OFSTEADY REV YEARS SEVEN Tours, Voyageurs duMonde,AirMauritius,etc.). Cook.fr, Selectour, Voyages Waastel, Kuoni, Jet (accorhotels.com, Promovacances.com, Thomas Voyages brandorthenameofapartnersite Go by 1,200affiliatedwebsites,undereitherthe The enginesareoffered together orseparately personalized packages andcarrentals. for flight-onlyproducts,hotel-only Go Voyages haslaunched foursearch engines business in2005. catalogue andexpects todoublethenon-flight Go Voyages iscontinuingtoaddhotelsthe 7%,Barcelona6%andAmsterdam4%. Lisbon for 11.5%,Venice 11%,Prague 8%,London 7%, major Europeancities,withRomeaccounting The newoffer’s preferred destinations were 45% inAccorchains. nights (hotels/vacationstays),ofwhich nearly Voyages soldnearly 44,000 room in 2003.Go Go Voyages revenues,comparedwith2.4% nights, holidaystays)represented4.5%of In 2004,non-flightproducts(carrentals,hotel PRODUCTS NON-FLIGHT IN INCREASE SHARP highlights WWW.ACCOR.COM ENUE 71 ■

q OTHER BUSINESSES CARLSON WAGONLIT TRAVEL GO VOYAGES RESTAURANTS

9 boutiques in France 31 franchised boutiques in Germany, Japan, Kuwait, Morocco, Qatar, Saudi Arabia, South Korea, Thailand, Tunisia and PROFILE the United States A prestige Accor brand 6 restaurants since 1985, Lenôtre the Pré Catelan, four Café has become an le Lenôtre (Pavillon Élysée in Paris, Cannes, the Ruhl ambassador for French in Nice and the Novotel gourmet foods around Paris Tour Eiffel) and the the world. Its creativity Panoramique at the Stade and expertise cover a de France stadium. broad range of activities, www.lenotre.fr including fine foods Lenôtre retailing, catering, EXTENSION OF THE LICENSING STRATEGY restaurants, cooking Four ice cream flavors were introduced in April 2004 schools and licensed under the Miko “Carte d’Or – Recette Lenôtre” products distributed label. under the “Une recette The launch was supported by an extensive TV Lenôtre” label. advertising campaign. A total of 2,236,567 liters of Over the next five years, highlights ice cream were sold during the year. Lenôtre plans to pursue French dessert-maker Brossard: created a new its carefully managed BOUTIQUES AND CAFÉ LENÔTRE dessert called “Obsession Chocolat-Framboise,” development of available in supermarkets under the “Une recette franchised boutiques • Opening of a Café Lenôtre at the Ruhl in Nice. Lenôtre” label. around the world, • Renovation of the boutique at Parly II near Paris. expand its licensed DEEPER AND BROADER SYNERGIES WITH THE products business and INTERNATIONAL EXPANSION HOTEL BUSINESS strengthen its Bangkok: opening of two boutiques Sofitel and Novotel training programs: cooking, professional training and a Café Lenôtre. programs. pastry and bread-making classes in the United Middle East: opening of a boutique in Doha, Qatar. States, Africa and Thailand.

WWW.ACCOR.COM 72 dinners forthequalifyingregattas. 9,000 mealsservedattheopeningandclosing CupinMarseille: America’s in Aix-en-Provence. International Lyric ArtsFestival de Vaux-le-Vicomte andtheParc Saint-Cloud. at theChateaudeVersailles, theChateau century” bythemedia—withreceptions wedding—dubbed “theweddingofthe celebrationforasumptuousIndian A fairy-tale throughout thefestival (3,000meals). at receptionsandprivateeveningevents Cannes FilmFestival: Chantilly, with1,500mealsservedatthegaladinner. centennial: FIFA CartierguestsatLe Bourget,nearParis.600 Dumont watch: Centennial celebrationforCartier’sSantos- in Brittany. served intwomonthsLaBauleandRennes Launch of the Peugeot 407: EVENTS OUTSTA AND RECEPTIONS PRESTIGE recipes forchildren. (Éditions duCherche Midi), acollectionofsavory of Publication Lenôtre magazinelaunched COMMUNICATION Les PetitesToques SaléesLenôtre outstanding eventorganizedfor evening eventattheChâteaude catering for2,500people more than 30,000 meals 30,000 ■ NDING EÔR HF HSNFRTEOYPCGMSI ATHENS IN GAMES OLYMPIC THE FOR CHOSEN CHEFS LENÔTRE universally acclaimedbyvisitors from allcountries. recipes thatwerespeciallytailored tothevenueandevent supervisory staffpreparedandserved some250Mediterranean-style staff, pastrychefs, icecreammakers,winestewards, headwaitersand Athens LaurentLe Chefs’Club. Led Fur, byCEO Lenôtre chefs, kitchen Chairman oftheLenôtre ManagementBoard,bythePresident ofthe Olympic GamesinAthens. The medalwaspresentedtoPatrick Scicard, 70,000 mealsservedattheSponsorsVillage andClubFrance duringthe Lenôtre was awardedtheGourmetMedalinrecognitionofmorethan Gourmet medal for Lenôtre ATHENS collectors’ items. Epiphany cakes,marketedas trinkets traditionallybakedin Swatch: PARTNERSHIPS an exclusive lineof an “icecreamYule log”. dessert, alsoavailableas deNoël” the “Mabouche Nathalie Rykiel: WWW.ACCOR.COM ■ 73

q OTHER BUSINESSES LENÔTRE RESTAURANTS Gemeaz Cusin www.gemeaz.it Pulcini & Co. ➜ 68 million meals a year. and UniCredit Banca highlights In September 2004, Gemeaz Cusin’s Pulcini NEW CONTRACTS & Co. division won a contract to manage the New contracts signed in 2004 generated more first company daycare than 7,700 meals a day in schools and over center, created by UniCredit Banca, one of 4,800 meals a day in hospitals. Italy’s most prestigious banks. INNOVATION Gemeaz Cusin introduced “cook and chill” technology, a first in Italy. The innovative meal PROFILE preparation method is much appreciated by clients, especially in the hospital segment. Italian subsidiary Gemeaz Cusin has long QUALITY been active in contract Three meal production centers were awarded food services. It also provides hospitality and biological and HACCP “own-checks” certification. corporate services and PARTNERSHIP manages the Scapa Italia central food Gemeaz Cusin provides expert support to Siticibo, purchasing agency. a non-profit organization aligned with Italy’s Food By integrating these Bank Foundation (FBA), which collects unserved four businesses, meals in company and school lunchrooms for Gemeaz Cusin fosters distribution to the needy. ■ the emergence of sales synergies and management cost savings.

brand undertook a number of initiatives. These GRwww.grsa.com.br Brasil included restructuring of corporate services, process controls, renegotiation of contracts, price ➜ 650,000 meals a day. adjustments and strategic alliances. ➜ 880 company and hospital restaurants. HIGHER SALES AND IMPROVED MARGINS ➜ 18,200 employees. Training and hiring young people ➜ 54 stores and 950,000 consumers a month in bus stations and airports. GR Brasil has partnered with Nestlé in a project PROFILE with the Brazilian government to hire 2,000 young ➜ 1,550 vending machines. A subsidiary of Accor people over the next two years. Encaminhar, Brazil and Compass, the company’s main social project, helps train GR Brasil has leveraged unskilled young people to work in companies. both companies’ Nestlé provides funding for the two-month expertise to become a highlights internships, while GR Brasil manages the program leader in the country’s and offers permanent contracts to young people, contract food and NEW CONTRACTS concession services • During the year, 151 new contracts either on its sites or at headquarters. market. representing annual sales of 75 million reals Electronic menu management (roughly $27 million) were signed with Frangosul, Software with a database for developing recipes Texaco (RJ), Duratex, Flanaço-Ligas Especiais and and controlling inventory and purchases was Unilever, just to name a few. To improve margins in introduced to help budget meal costs and more the vending machine business, the GR Canteen effectively manage inflation. ■

WWW.ACCOR.COM 74 ➜ ➜ ➜ Compagnie des Wagons-Lits night trains. reception serviceson It alsoprovidestraveler and vendingmachines. cars, refreshmenttrolleys in-seat meals,dining including snack bars, dining solutions, passengers avarietyof and night-train Kingdom—it offersday Spain andtheUnited France, Italy, Portugal, countries—Austria, With operationsinsix for Europeanrailways. services and restaurant leading providerofhotel Wagons-Lits isthe Compagnie des PROFILE 4.2 milliontravelerscaredforonnighttrains. 24 millionsnacks andmealsservedondaytrains. 6 countries(Austria, France, Italy, Portugal, SpainandtheUnitedKingdom). services forhigh-speedtrainsbetween theUnited food from EurostarLimitedtoprovide onboard Compagnie desWagons-Lits wonacallforbids KINGDOM UNITED THE IN EUROSTAR CONTRACT THE FOR SERVICE FOOD the samemodern,distinctlyFrench “artdevivre”. 67 othercompanies(includingLenôtre) thatshare the world.Pullman OrientExpressjoinswith around its membersandthevaluestheyembody trade associationwhosemissionistopromote The ComitéColbert isaFrench luxury-brand member company, effective January1,2005. Colbert electedPullman OrientExpressasa In October2004,theGeneralMeetingofComité COLBERT COMITÉ O PULLMAN highlights www. RIENT EXPRESS JOINS THE compagniedeswagonslits.com of morethan The five-yearcontractrepresentstotalrevenues and TGV sections. Province/Province includes TGV Nord,TGV Atlantique, TGV Sud-Est contract forFrance’s entireTGV network,which Compagnie desWagons-Lits wasawardedthe economies ofscale.Thanks toitsinnovativebid, proposal designedtodeliverconsistencyand contract separatelybutalsosubmittedaglobal areas. CompagniedesWagons-Lits bidforeach proposed dividingthecontractintooperating industry, To meettheeconomicdemandsofrail TGV high-speedtrainnetworkinFrance. foodserviceandlogisticsfortheentire onboard from theFrench nationalrailway( Compagnie desWagons-Lits wonacallforbids FRANCE ALL TGVS IN COMPAGNIE DES WAGON stations beganonSeptember1,2004. the Waterloo InternationalandAshford Kingdom, France andBelgium.Operationsfrom SNCF’s December2003callforbids SNCF’s € 500 million. WWW.ACCOR.COM ■ S-LITS ONBOARD S-LITS ONBOARD SNCF) toprovide SNCF) 75

q OTHER BUSINESSES GEMEAZ CUSIN GR BRASIL COMPAGNIE DES WAGONS-LITS PARTNER TO THE WORLD OF TRAVEL AND ENTERTAINMENT

FRANCE, BIARRITZ CASINO

16 hotels 8,000 employees Groupe 39 casinos 4 countries: France, Belgium, Malta and Switzerland Lucien Barrière 3 golf courses, 1 seawater therapy spa and 2 tennis clubs

EXPANDING AND MODERNIZING THE NETWORK highlights Renovation of France’s largest casino in Enghien to create a leisure complex unrivaled in Île-de-France. CREATION OF GROUPE LUCIEN BARRIÈRE SAS It will include hotels (Hôtel du Lac and Grand Hôtel) The highlight of the year was the creation by and restaurants, as well as a spa, medical center, the Desseigne-Barrière family, Accor and Colony conference center, casino and theater. Scheduled Capital of Groupe Lucien Barrière SAS, a major for completion in 2006, the project represents a player in casinos. Partners since 1990, Accor total investment of €100 million. and the family-owned Lucien Barrière group have Opening of the Briançon casino in June 2004 taken an important step by combining their and the Ribeauvillé casino on January 1, 2005. respective capabilities in a joint company that will Acquisition and complete renovation of the expand in France and across Europe through Sofitel Bordeaux Aquitania. tenders and selective acquisitions. Complete overhaul of the Carry, Besançon and Niederbronn casinos in 2004 and the Cassis and Nice casinos in 2005. Scheduled 2006 opening of a new luxury hotel in Paris, Hôtel Fouquet’s Barrière.

WWW.ACCOR.COM 76 Champs-Élysées inParis. restaurants, includingtherenownedFouquet’s onthe as well16luxuryhotels*andalargenumberof casinos*undertheLucien Barrièrebrand, operates 39 leader incasinos,GroupeLucien BarrièreSAS backed byashareholder’sagreement.The European stake andColonyCapital15%.The agreementisalso Desseigne-Barrière family, withAccorholdinga34% subsidiaries. The newcompanyis51%-ownedbythe AccorCasinosandtheirrespective (SHCD), (SHCL HôtelièredelaChaîneLucien Barrière of Société 17, 2004bycombiningthecasinoandhotelassets Groupe Lucien BarrièreSAS wascreatedonDecember PROFILE in SFCMC, which ischaired byDominiqueDesseigne. in SFCMC, Barrière. The Desseigne-Barrière familyisalsothemajorityshareholder *The hotelsandcasinos inCanneshavesalesagreementswithGroupeLucien Barrière ManagementBoard Barrière Chairman oftheGroupeLucien Sven Boinet synergies tobedeveloped.” working onanumberof France. At themoment,we’re products, especiallyoutside and networktomarket our to buildonAccor’s resources overlap. We’ll alsobeable and havelittlegeographical are positioneddifferently because thetwocompanies makes goodbusiness sense “The alliancewithAccor B), Société desHôtelsetCasinosdeDeauville B), Société Strategy Committee and SupervisoryBoard Barrière Chairman oftheGroupeLucien Dominique Desseigne partnership.” Colony-Colyzeo inawin-win alliance betweenAccor and thanks inparticulartothe ambitious objectives, base. Naturally, wehave long-term coreshareholder French casinogroupwitha “Our industryneedsamajor unique propertiesinCannes,Paris andDeauville. and Enghien,inrestaurantsluxuryhotels,withits a Europeanbenchmark incasinos,withMontreux,Malta Groupe Lucien Barrièrehastheresourcestobecome to thenewentitycreatedwithAccorandColonyCapital, committed toblendingtraditionandquality. Today, thanks to thatofitsfoundingfamily, which hasalwaysbeen The historyofGroupeLucien Barrièreiscloselylinked History and outlook FRANCE , OE OMNYDEAUVILLE NORMANDY HOTEL WWW.ACCOR.COM 77

q OTHER BUSINESSES GROUPE LUCIEN BARRIÈRE SAS

Services management A major player inhuman resource essentials, enhancingwell-beingand improving performance. key aspectsofhumanresourcesmanagement: meetinglife The productandserviceportfolio isorganizedaroundthree objectives withthepersonalaspirations ofitsemployees. services thatmoreeffectively reconcileacompany’s productivity Accor Servicesdesigns,developsandmanagesinnovative networks andcustomers. and retainingemployees,distribution revitalize companiesbymotivating through arangeofservicesthat Improving performance individual andenterpriseperformance. work/life balance,therebyimproving with servicesthatcreateabetter Enhancing well-being their socialresponsibilities. and publicinstitutionstoassume constituents andenablecompanies the basicneedsofemployeesand with alineofproductsthatcover Meeting life essentials WWW.ACCORSERVICES.COM 34 9.4 19 300,000 in 2004 business in the Services organic growth users corporate clients million countries % 79

q SERVICES SERVICES Meeting life essentials

Employee Benefits

33 COUNTRIES Meeting the essential Created in the United Kingdom in the 1950s as needs of employees highlights Luncheon Vouchers®, the meal voucher was and constituents. HUNGARY introduced in its current form in France in 1962. Enabling companies Introduction of Ticket It allows employees to have lunch outside the and public institutions ® workplace in a restaurant of their choice, while to assume their social Wellness , a health and enabling employers to benefit from exemptions to responsibilities. well-being voucher that certain taxes and payroll charges. The success of employees can use to Ticket Restaurant®, which has been developed in LAUNCH OF THE purchase products and nearly all of Accor Services’ host countries, has ELECTRONIC FOOD services from a network CARD helped build global awareness of the voucher. of affiliated pharmacies, Building on experience sports and fitness facilities, acquired in Brazil since medical centers and other 1997, Accor Services in service providers. The Mexico shifted from food health market in Hungary has been growing very Employees use food vouchers to pay for groceries vouchers to a smartcard- rapidly in recent years, thanks to tax exemptions in neighborhood stores and supermarkets. based system in granted to companies and employees. Introduced by Accor Services in 1983 in Mexico, November 2004 and FRANCE under the Vale Despensas® name, food vouchers signed an affiliation Ticket Restaurant® wins La Poste contract have since been extended throughout Latin contract with Wal-Mart, Since October 2004, more than 17,000 employees America and, more recently, in Central Europe. the world’s largest retailer of La Poste, the French postal service, have been and Mexican market leader. receiving Ticket Restaurant® meal vouchers. Called Ticket Alimentación The contract will be extended to include seven Electrónico, the electronic additional departments each month through 2005, food card was introduced Companies and public institutions use transport with annual issue volume eventually increasing not only in Mexico but vouchers to finance a portion of employee and to three million vouchers. constituent commuting expenses. Introduced as also in Uruguay, TransitCheck® in the United States and Ticket Venezuela and Argentina. Transporte® in Brazil, the system was extended in 2003 to Italy with Ticket Trasporto® and Uruguay with Ticket Transporte®.

WWW.ACCORSERVICES.COM 80 Clean Way in ItalyandtheUnitedKingdomasof2001, Launched anddeveloped inFrance in1995 cars andutilityvehicles. manage expenses relatedtotheuseofcompany the voucher allowsemployerstomonitorand in Brazil.MarketedmainlyLatinAmerica, 2005 marksthetenthanniversaryofTicket Car while increasingclothinglife. are usedasintendedforuniformmaintenance system guaranteesthattheallocatedfunds and drycleaners.For employers,thisunique country) thatisacceptedbyaffiliatedlaundries allowance” (orvouchers, dependingonthe employee asmartcardpreloadedwith“cleaning on asimpleprinciple:thecompanyissues clothing, fromuniformstocoveralls.Itisbased cleaning solutionforallkindsofcorporate ® is Europe’smostwidelyused Clean Way second-largest securitycompany, haschosen in March 2004.Securitas,theNetherlands’ countries in theBenelux this innovativecleaningsolution. Transportation Ministryagentsalsobenefitfrom uniforms, whileinBelgium,Equipmentand Clean Way BENELUX highlights ® ® for theupkeepof4,500employee has signed Management Expense expenses. of employeejob-related management that facilitate solutions forcompanies Designing innovative 18 COUNTRIES two majorcontracts since itsintroduction WWW.ACCORSERVICES.COM 81

q SERVICES MEETING LIFE ESSENTIALS SERVICES Meeting life essentials

6 COUNTRIES Working with governments and local authorities to develop solutions for the management of social programs. These tailored services guarantee to public authorities that funds are used as intended for a wide range of purposes, such as enabling beneficiaries to purchase vital products or young people to take part in cultural and sports activities.

BELGIUM Management Accor Services Belgium was awarded a three-year government contract of Social Programs for vouchers used to pay for domestic services provided by certified companies. In this way, the government hopes to Ticket Service® provides the disadvantaged increase demand for these with access to a prepaid service that allows services and create 25,000 them to procure groceries and essential services jobs by year-end 2005. (like housing or electricity) from retail chains and specialty service providers. Created in France in 1992, the service has since been extended to other countries, including Italy, Belgium and Germany.

This voice server system accurately calculates the number of hours worked by home-care service providers for the sick or elderly.

For local public authorities, Accor Services designs highlights customized products to meet a range of special needs, notably to facilitate access to cultural, FRANCE sports and recreational activities. Expansion Tailored back-to-school solutions in this market accelerated in 2004, as a number from Ticket à la Carte® of programs were decentralized and new local Accor Services France has developed a range development strategies were defined. of voucher and smartcard systems enabling five French regional authorities to fully or partially subsidize school textbook purchases. In September 2004, more than 360,000 high school students benefited from these tailored solutions.

WWW.ACCORSERVICES.COM 82 service industryemployees. for 45,000construction,manufacturingand thecompanyleveragesitsexpertise in 1992, and workplacesafety consultant.Created in ErgonomiaSA,Greece’sleadinghealth Accor Servicesacquireda34.5%stake GREECE highlights for thiskindofservice. marketshare where AccorServicesholdsa60% companiesusethevouchers intheUK, in 3,900 220,000employees who workoncomputers.Some eye check-ups foremployees, especiallypeople this serviceenablescompaniestosubsidizeregular Introduced intheUnitedKingdom1992, medicine. andoccupational safety the areasofhealth, complex legislationin comply withincreasingly that helpcompanies and specializedadvice services, information Accor Servicesprovides 2 COUNTRIES Services Compliance and cateringservices. logistics and,inpartnershipwith Lenôtre, restaurant reception, conference roommanagement,hotel Management Facilities Accueil Partenaires New contractforAccueilPartenaires FRANCE highlights rooms. residences in2005,foratotalof1,300 throughout France andwilltakeon9new It currentlymanagesandoperates18residences Railway ( housing solutionsfor26,000French National Orfea wascreatedinDecember2003tooptimize and services,AccueilPartenaires By leveragingAccor’sexpertise inhotelmanagement Participations andAccueilPartenaires Orfea, anequallyownedsubsidiaryofSNCF- cleaning, food,maintenanceandotherservices. comprehensive rangeofhospitality, accommodation, Partenaires to share where executives oftheFrench power utilitymeet corporateuniversity, createdasaplace the EDF accommodation projects. and renovationof construction, extension companies inthe Servicing andadvising and localauthorities. on behalfofcompanies or employeehousing, corporate universities such astrainingcenters, residential facilities, Managing andoperating FRANCE their knowledgeandexperience. Accueil SNCF) engineersandconductors. SNCF) ® provides anarrayofservices,including ® WWW.ACCORSERVICES.COM has signedtomanage ® delivers a ® ® 83

q SERVICES MEETING LIFE ESSENTIALS SERVICES Enhancing well-being

ACCOR SERVICES INTRODUCES EMPLOYEE WELL-BEING BAROMETER Ever sensitive to changes in employee behavior and expectations, and to the need to adjust its product portfolio accordingly, Accor Services conducted its first annual barometer of employee well-being and involvement in the workplace. The barometer provides a system for observing the behavior of employees and their relations both with the company and with work in general. The 2004 barometer, whose results were released on November 18, revealed two major trends—growing demand for companies to take into account the employee’s individual needs CHILE and the emergence of “employee-consumers”. Family Assistance Accor Services partners the Chilean government’s Sistema Cuidado Infantil project, which is testing

11 COUNTRIES a new childcare program based on systems Helping companies Companies subsidize a portion of their quickly provide employees currently used in the employees’ daycare expenses. Accor Services with solutions to concerns United Kingdom, Spain and has introduced this voucher in the United in such areas as France, as an alternative Kingdom, Venezuela, Argentina, Chile, Belgium, childcare, tutoring and to traditional daycare Portugal and, since 2003, Spain. care for elderly people centers. The Accor or disabled children. Services team made a presentation to 150 small and mid-sized company human resources managers Launched in 1985 in the United States, this to raise awareness of service helps employees reconcile their job and the importance of women family life with solutions for child and elderly care in the workplace and concerns by finding the most appropriate service responsible social providers (daycare centers, senior residences, etc.). practices. It is used by more than four million employees in over 400 companies, including some of the largest US corporations, notably in the automobile industry (with such prominent customers as Ford, highlights General Motors and Chrysler) and in UNITED STATES pharmaceuticals (with Bayer and Amgen). Work/Life Benefits® took part in the American Society on Aging-National Council on the Aging conference in San Francisco in April 2004. At the event, participating companies and Launched in Portugal in 2003, this voucher allows decision-makers were introduced to Work/Life companies to subsidize a portion of the fees Benefits® products and services for employees employees pay for their children’s schooling, from who care for elderly relatives. These solutions kindergarten to university. include call centers, specialized databases and expert advisors on geriatric issues.

WWW.ACCORSERVICES.COM 84 Personal Assistance and coaching. psychological information, for meet employeeneeds effective companies provide (EAP) concepttohelp Program Assistance on theEmployee international offerbased has developedan challenge, AccorServices In responsetothis home services. for payment vouchers concierge, as through acompany via theInternetor accessible byphone, and informationplatform including aservices a fullrangeofsolutions, Accor Servicesoffers concerns andproblems. manage everyday Helping employees nearly companies and US companies stress costsEuropean Office study, employee International Labour According toan 20 COUNTRIES 8 COUNTRIES € 30 billionayear.30 solutions that € 20 billion support well as government programs. legal counselingandinformationabout and otherlifestyle supportservices,aswellto to housing,familyassistance,entertainment,travel service orviatheInternet,employeeshaveaccess the Bien-ÊtreàlaCarte Following successfultestswithAccoremployees, Trahaire After the2002acquisitionofDavidson employee performance. to reducework-relatedstressandimprove financial andothercounselingservicesdesigned in 20countrieswithpsychological, lifestyle, legal, companies programs. Itprovidesmorethan800 in theEuropeanmarketforemployeesupport (Employee AssistanceResources)isapioneer EAR acquired byAccorServicesin2001, Created intheUnitedKingdom Assistance Practical in early2002.Through theVie Pratique counseling andpersonaldevelopment services. specialized infamilysupport,psychological with the2003acquisitionofCorpsych, which is employee assistanceprograms from33%to40% increased itsshareofthecountry’s marketfor consulting andassistancefirm,AccorServices ® , Australia’s leadinghumanresources ® offer wasrolledout 1981 and ® ® advisory Domicile Marketed inFrance since1997, Ticket Emploi the employee’scompanyorworkscouncil. services, withpaymentpartiallysubsidizedby housecleaning, tutoring,childcare andotherhome work/life balance. concept tohelpemployeesachieve abetter on theEmployeeAssistanceProgram (EAP) launch ofPeopleOne™, arangeofsolutionsbased assistance andservicesmarketinSpainwiththe Accor Serviceshasenteredthepersonal Launch ofPeopleOne™ SPAIN highlights In lateJune2004, WORKPLACE THE IN STRESS MANAGING on-the-job stress. integrated solutionforpreventingandmanaging providesthefirst founding members,AGSE Byleveragingthecapabilitiesofitsfour (AGSE). Association forManagingStressintheWorkplace with threepartnersinFrance tocreatethe ® vouchers areusedtopayfor WWW.ACCORSERVICES.COM Bien-Être àlaCarte ® joined 85

q SERVICES ENHANCING WELL-BEING SERVICES Improving performance

22 COUNTRIES A relationship marketing agency and operator, Accentiv’® helps companies to attract and retain employees, distribution networks, customers and other internal and external stakeholders. It designs and manages loyalty programs and incentive campaigns, like Compliments from Accor Hotels and offers rewards in the form of gift vouchers and cards, gift catalogues and incentive travel programs. With the creation of Accentiv’ do Brazil and the acquisition highlights of Capital Incentives and Motivation Ltd in ROMANIA PORTUGAL the United Kingdom, Compliments Ticket Cadou®, the gift voucher Accentiv’ signs its first international contract Accentiv’® now offers introduced in Romania in 2003, continued its rapid Renault has contracted with Accentiv’ Portugal customers an international growth, with total issue volume of €10 million in 2004. to manage its new loyalty program. Intended network of ten agencies Employees of 3,000 client companies can now for car dealers and maintenance garage around the world. use their vouchers in 10,000 affiliated stores. customers, the project builds on the success of the Renault Advantages Trophy, designed and managed by Accentiv’ France. As contractor for the program in Portugal, Accentiv’ France is in charge of information systems, telemarketing and rewards, with participants earning points that Relationship Marketing ® can be redeemed as Compliments gift vouchers. ACQUISITION FRANCE Accentiv’ pursued its Accentiv’ receives top prize at “Agency of the international expansion Year” awards with the acquisition Accentiv’ was elected “Best Incentive Agency of Rewards play an essential role in company loyalty of UK-based Capital 2004” by French communication and marketing and incentive campaigns, whether intended for Incentives and Motivation professionals. employees, distribution networks or customers. Ltd. With 2003 business In France and other countries, Accentiv’ offers volume of €90 million Mouvango three Compliments gift voucher products that (£60 million), Capital In 2004, the Accor Mouvango card generated generate annual issue volume of €300 million: Incentives is a market more than 250,000 room nights in Accor hotels, compared with 155,000 in 2003, an increase Compliments® Universal voucher leader in its segment of over 60%. The loyalty card was also used These vouchers are issued and accepted in and the largest issuer for 250,000 transactions with non-hotel partners 22 countries, with a total of 120,000 affiliated of multi-choice gift in the Mouvango network, which includes chain outlets and 18,000 corporate customers vouchers and cards. Courtepaille restaurants and Total service stations. throughout the world. This represents an increase of 90% over the Compliments® Accor Hotels voucher 132,000 transactions recorded in 2003. Two This international voucher is accepted in more years after its launch, the Accor Mouvango card than 2,500 Accor hotels around the world. has expanded outside France. Since November Compliments® Travel voucher 2004, Accor hotels in Belgium and Luxembourg An extension of the Compliments® Accor Hotels have been accepting the card as part of a test voucher, the voucher can also be used in Carlson before the network is extended to other countries. Wagonlit Travel and Frantour travel agencies, as well as in Courtepaille restaurants, Europcar rental car agencies and Lenôtre boutiques and restaurants.

WWW.ACCORSERVICES.COM 86 managing employeetrainingprograms. an integratedoffer fordesigning,organizingand of servicesforprivateandpubliccompanieswith vouchers, AccorServiceshasenhanceditsportfolio Restaurant withTicketPresent inRomaniasince1998 Accor ServicesAcadémie ROMANIA France’s leadingemployeetrainingwebsite. is availableexclusively atforagora-online.com, of Partenaires Foragora. The servicespackage and mid-sizedcompanieswiththelaunch Foragora hasdevelopedanoffer forsmall Launch ofPartenaires Foragora FRANCE highlights Solutions Employee Training their loyalty. skills andtherebyensure to developemployees’ enabling thecompany training programs, organizing andmanaging solutionsfor with tailored resources departments Providing human 5 COUNTRIES TRAINING ORGANIZAT CONNECTIONS A MO 30,000 TRAINING 10,000 10,000 MAKING OVER OFFERED ® PROGRAMS and 2003withCompliments IONS NTH ® launches operations in servicemanagementconsultingandtraining. in January2004,marketsAccor’scapabilities Foragora Académie their trainingbudgets. management tohelpcompaniesoptimize ten years’experience intrainingprogram in 2003,leveragesitsexpertise andmorethan ® ® , which joined AccorServices ® , anewAccorServicesbrandlaunched gift Plans Savings Employee Tesorus In September2004,AccorServiceslaunched employees sendoneormoreTesorus in savingsproducts.Whenever theychoose to, by theemployeeandtotalamountinvested of theemployercontribution,amountpaid 12 vouchers, each ofwhich displaystheamount of companies’ employeesreceiveabooklet other employeesavingsplans.Participating small companiestoparticipateinpensionand manage howoftenandmuch theyinvest. program thatenablesthemtoindependently companies withasupplementary retirement provides employeesofsmalland mid-sized Launch ofTesorus FRANCE highlights Tesorus Ticket Restaurant voucher. Aseasytouseasa plan (PERCO) Natexis BanquesPopulaires. to Servepar, anequallyownedjointventurewith retaining employees. retaining solution formotivatingand companies withanew plansprovide Savings on servicevouchers. voucher systemmodeled their employersthrougha mid-sized companiesand employees ofsmalland plans availableto Making corporatesavings FRANCE ® ® provide aturnkeysolutionthatenables Retraite, anewcorporatepension WWW.ACCORSERVICES.COM ® meal voucher, thenewproduct ® Retraite ® vouchers 87

q SERVICES IMPROVING PERFORMANCE SUSTAINABLE DEVELOPMENT

Interview

Monique Barbut Director of the Division of Technology, Industry and Economics United Nations Environmental Programme (UNEP)

WWW.ACCOR.COM 88 Sustainable Development

Tourism is often the largest industry in our host countries. have launched AIDS-prevention programs. Some 1,200 hotels That’s why Accor’s development is closely monitored by pub- in Africa and the Americas have signed our Environmental lic authorities, associations, the media, ratings agencies and Charter, which is already applied by 2,000 hotels in Europe and other organizations. Asia. These are just a few examples of our role as a driving Firmly rooted in our overall strategy, Accor’s commitment to force in the area of sustainable development. social and environmental responsibility represents an advan- To make this commitment lasting, it must be integrated into all tage for our stakeholder groups, which include customers, management decisions and operating procedures. That’s why employees, suppliers and shareholders. Customers note that we’ve undertaken a series of actions to instill a sustainable this commitment improves the quality of our offering. development culture across our entire organization. Employees perceive the federating influence of these values. In 2003, a booklet was sent to supervisory staff presenting our Suppliers see new outlets for their highly innovative products values, principles and management practices. and services, as well as for fair trade products. And share- In 2004, an informative in-house film was produced. Called holders recognize social and environmental responsibility as “Together, Ever More Responsible,” it features hotel employ- part of a long-term vision. ees, who explain how they integrate environmental protection Wherever we operate, we provide skills enhancement pro- into their day-to-day responsibilities. grams to improve trainees’ capabilities and, consequently, their Through these initiatives, Accor is responding to the challenges employment prospects. We upgrade construction standards to of sustainable development and effectively transforming them make our buildings more environmentally friendly. Thousands into opportunities. of people have been trained in ways to combat the sexual exploitation of children. Our human resources teams in Africa Jean-Marc Espalioux SUSTAINABLE DEVELOPMENT

Impacts and responsibilities

Shareholders Accor’s growth is In 2004, Accor was financed by institutional included in the following investors. Executive and independent ethical management functions ratings and sustainability page 17 are carried out in line indices: Advanced with the principles of Sustainable Performance good corporate Indices, FTSE4Good, governance. DJSI World & DJSI Stoxx and the Ethibel Sustainability Index.

Local Communities

In 2004, more than 5,000 employees in seven countries received training in ways to combat the sexual 3,973 hotels around exploitation of children. the world, and a Accor supports child corresponding number sponsorship, with Plan, page 114 of local communities and local aid to with whom ties are populations in need, being developed. with the Red Cross.

Suppliers

Purchases from In 2004, the Sustainable 2,274 certified suppliers Development Purchasing page 104 in 15 countries totaled charter was tested with more than €1 billion. 433 suppliers in France. 1,500 additional hotels now support fair trade initiatives.

WWW.ACCOR.COM 90 The diagram below presents stakeholders concerned by Accor’s activities and the corresponding pages in this document on which our practices are described.

During the year, the Diversity Charter was AND RESPONSIBILITIES IMPACTS signed in France. Initiatives to diversify hiring, upgrade skills and promote job mobility were pursued. Listening to employees and recognizing their accomplishments Employees are important ways of maintaining a Accor had 168,500 constructive social employees in 2004. dialogue.

page 49

page 98 DEVELOPMENT SUSTAINABLE q

Customers

Accor has more than 120 million customers worldwide, of whom 70% choose our hotels for business trips and 30% for leisure stays. page 94 certification, equivalent At year-end 2004, to 25% of the hotel a total of 547 hotels base in France and had earned ISO 9001 in Europe.

Environment

In 2004, the Environmental Charter was extended to 12 countries in Africa. In addition, 26 properties page 106 were awarded ISO 14001 certification. An environmental Every year, Accor management and consumes as much reporting system was water as a city of implemented and a film 850,000 inhabitants to raise environmental and as much energy awareness was as a city of 350,000. produced.

WWW.ACCOR.COM 91 SUSTAINABLE DEVELOPMENT Scorecard

Stakeholders Objectives Scope of application 3 levels: France1 Europe 2 Worldwide 3

Ensure compliance with corporate governance best practices. 3

SHAREHOLDERS Guarantee the transparency of financial data. 3

Separate powers and responsibilities. 3

Satisfy customer requests and demands. 2

Guarantee high-quality service. 3 CUSTOMERS Ensure customer safety and security. 3

Guarantee access for the handicapped. 3

Promote diversity in employee profiles and career paths and ensure equal opportunity. 3

Provide compensation in line with local practice. 3

Support employee development through training. 3

EMPLOYEES Promote job mobility and help employees climb the career ladder. 3

Promote social dialogue and corporate citizenship. 3

Ensure employee health and safety. 3

Improve employee recognition and satisfaction. 3

Take into account supplier-related social and environmental risks. 1 SUPPLIERS Support fair trade. 2

Apply the Environmental Chart as a management system. 3

Pursue the ISO 14001 certification process. 3

Monitor water consumption. 3

Monitor energy consumption. 3

ENVIRONMENT Promote the use of renewable energy sources. 3

Manage waste. 3

Raise employee awareness. 3

Protect biodiversity. 3

Apply the integration study. Project underway, for application in 2005.

Deploy humanitarian sponsorship programs. 3

Combat sexual tourism involving children. 3 LOCAL COMMUNITIES Support development of the local economy. 3

Combat corruption. Policy formalized in 2004.

Integrate local cultures. 3

WWW.ACCOR.COM 92 Accor performance indicators Corresponding Corresponding key words Correspondence with the ten sections in The Manager’s principles of the United Nations of the GRI* Benchmarks Global Compact

Compliance with corporate governance guidelines. 3.1 to 3.3

Financial data in the Reference Document. Shareholder Insider dealing Number of independent directors. 3.1 Management procedures. 1. Support and respect the protection Number of establishments visited by mystery guests. PR8; PR3 of internationally proclaimed human

Clients rights within their sphere of influence. SCORECARD Number of hotels with ISO 9001 certification. Anticipation Quality Number of training sessions focusing on safety. PR1; PR4 Disabilities Responsiveness Number of handicapped-accessible rooms Safety LA10 in new buildings. Gender parity and equal opportunity. LA1; LA10; LA11 Dialogue Number and integration of handicapped persons. HR12; HR4 1. Support and respect the protection Diversity of internationally proclaimed human Average salary by region. Variable and fixed portion Career ladder of compensation. rights within their sphere of influence. Disabilities Number of employees who took part in at least one 3. LA9; LA16; LA17 Motivation Uphold the freedom of association training course. Training budget as a % of total payroll. Recognition and the effective recognition of the right to collective bargaining. Number of employees who changed their business Respect Training

or region. 4. Eliminate all forms of forced and DEVELOPMENT SUSTAINABLE Recruitment compulsory labor. Monitoring of employee representation bodies. LA4; HR5; HR7 Compensation

Safety 5. Effectively abolish child labor. q Number of work-related accidents. Number of health LA5; LA7; LA8; Unions HR11 6. Eliminate discrimination in respect and safety training sessions. Social coverage. Round table of employment and occupation. Number of employees who took part in satisfaction surveys. HR3 Flexible working hours Deployment of Sustainable Development Purchasing EN33 and Cleaning Service Charters. Purchasing Sub-contractors Number of hotels serving fair trade products. 3.16; HR2 Fair trade

Number of hotels that apply the Environmental Charter. 3.4 Number of ISO 14001-certified hotels 3.4 (24 in France and 2 in Australia). Percentage of establishments reporting EN5; EN21; EN22 water consumption. Percentage of establishments reporting EN3; EN8 7. Support a precautionary approach energy consumption. to environmental challenges. Environmental Charter Number of establishments with renewable-energy Reporting 8. Undertake initiatives to promote source installations (approximately 30 hotels in France EN17 Water greater environmental responsibility. and around the world). Energy 9. Assets Encourage the development and Application rate of waste management measures diffusion of environmentally friendly EN8; EN9 in the Environment Charter. technologies. Number of employees who have received 3.4 environmental training. Application rate of partnership actions EN6; EN7; EN25; in the Environment Charter. EN27; EN28; EN29 Application rate of the integration study. 3.4 Number of children sponsored and local initiatives. Number of countries that have signed the ECPAT HR8 2. Make sure that they are not complicit Code of Conduct and provided related training. Children Patronage in human rights abuses. Number of jobs held by expatriates. Percentage of local HR14; SO1 Partners purchases. 10. Work against all forms of corruption, Prevention of corruption including extortion and bribery. Risk analysis. SO2 Local initiatives. *The Global Reporting Initiative (GRI) is a UN-supported institution that provides a consistent framework of 90 sustainable development indicators for companies.

WWW.ACCOR.COM 93 SUSTAINABLE DEVELOPMENT Customers

Safety and security

Safety plays a key role in the trusting relationships forged between Accor and its customers and employees. To ensure their protection against the main risks identified in Accor locations, a dedicated organization was set up to define and implement prevention measures.

RISK PREVENTION COMMITTEE The Risk Prevention Committee, which meets once a year, is comprised of Management Board members and senior operational and support function executives. It is led by a high-level staff member, the Group Safety Director, who is in charge of monitoring the development and implementation of safety policy. Every month, the THE THREE MAIN RISKS MONITORED BY ACCOR Safety Director and managers in charge of carrying out decisions conduct a review to ensure that procedures are being followed and • In hotels, fire constitutes the most important risk. In addition to to promote continuous improvement. local regulations, Accor applies its own safety standards and ensures training for staff members covering the different stages of THE COMMITTEE’S MAIN OBJECTIVES FOR 2003/2004 hotel construction, operation and maintenance. In line with this pol- • Deploy a network of local correspondents in all host countries. icy, the use of fire detectors is gradually being extended to all • Form a safety-incident monitoring unit to study developing problems Group hotels. and different kinds of risk. • Surveillance measures to reduce theft, assault and uncivil • Extend hotel manager training programs, such as those offered behavior have been strengthened, especially for Etap Hotel and to managers of 150 Ibis properties. Formule 1. For hotels in less secure areas, mediators, security • Increase the number of audits and inspections conducted by teams and even electronic surveillance systems are used. The num- independent outside organizations. ber of assaults was reduced by half in some of these areas.

WWW.ACCOR.COM 94 AT ETAP HOTEL, DIALOGUE MAKES A DIFFERENCE For hotels subject to disturbances, establishing a constructive dialogue with the local surroundings is always an effective solution. That’s why a number of Etap Hotel locations use mediators from disadvantaged neighborhoods. This initiative creates a more pleasant environment for customers CUSTOMERS and employees and new jobs and social advancement opportunities for mediators. SUSTAINABLE DEVELOPMENT SUSTAINABLE q

FRANCE, ETAP HOTEL LONS LE SAUNIER

ACCOR IN COUNTRIES WITH A RISK OF INSTABILITY AND VIOLENCE (number of hotels) 3,636 266 71 • Health and food safety risks are a day-to-day concern in Accor hotels and restaurants, where frequent, regular inspections are carried out by approved organizations. If a supplier or hotel manager detects a problem, he or she informs the Purchasing Department, which assesses the seriousness of the situation and assigns one of three alert levels. Products involved are systematically destroyed, regardless of the alert level. In case of a serious problem, a crisis unit is set up with manufac- turers and distributors concerned by the incident.

Low-risk Medium-risk High-risk areas areas areas Risk categories

Source: Inter-Company Economic Defense Board (GDEE)

WWW.ACCOR.COM 95 SUSTAINABLE DEVELOPMENT

Service quality

Quality standards must be measured to ensure customer satisfaction and enhance perception of Accor and its brands. In 2004, €1.4 million was invested in quality control, €400,000 more than in the previous year.

AREAS OF QUALITY MEASUREMENT AND CONTROL: graphic identity standards. Each visit was followed by an interview • All hotel products and equipment, regardless of the brand or with the hotel manager. In addition to mystery guests, Accor’s quality country. commitment also encourages customers to share their views. • Employee aptitudes and skills, which are ensured through certified During the year, 22,000 of them provided unsolicited opinions, training and continuing education programs. while 30,000 agreed to take part in satisfaction surveys. Already the first chain to obtain ISO 9001 certification (324 hotels • Feedback from customers. Expressed through letters and satis- in France and 223 elsewhere in Europe), Ibis initiated an faction surveys, these opinions are taken into consideration when ISO 14001 environmental certification program in late 2004. As of formulating each hotel brand’s customer promises and commit- year-end, 19 hotels were already accredited. ments. Based on quality measurements in these three areas, each hotel manager deploys an action plan to improve customer satisfaction.

In 2004, a total of 1,700 hotels—from Formule 1 to Sofitel—were visited by mystery guests whose job was to assess whether the brands’ were effectively delivering the services and amenities they promised. Inspections focused on cleanliness, general upkeep, equipment reliability and compliance with service schedules and

WWW.ACCOR.COM 96 HANDICAPPED CUSTOMERS A COMMITMENT FROM SUITEHOTEL AND IBIS Through an initiative of the The objectives for 2005 Ibis brand, Accor is engaged are to: in a certification process • Obtain certification in the involving several hotels first hotel for the two other in France. The nationwide disabilities. Tourism and Handicap label • Prepare detailed specifications is designed to encourage for improvement plans in hotels to improve their existing hotels. facilities in terms of • Work with suppliers on handicapped accessibility, modifying certain materials

TRAINING IN RECEPTION CUSTOMERS staff training and signage. or fittings to make the hotels SERVICES FOR Certification, which may be more handicapped accessible. THE HANDICAPPED awarded for hearing, mental, • Create specifications for In the United Kingdom, motor and/or visual impairment, new hotels and provide 305 managers took part in represents a commitment reception staff with a half-day awareness-raising and training course on to delivering optimal hotel appropriate training. reception services for the services. In 2004, an Ibis disabled. The session focused hotel in France was certified on the hotel’s legal and moral for two types of disability. obligation to provide the handicapped with access to its main facilities. In 2003, a CD-ROM was introduced in

four hotels to train employees DEVELOPMENT SUSTAINABLE in services for the disabled. Since then, 836 staff members q have taken part in the program and successfully passed an interactive test given at the end of the course.

Environmental performance is an integral part of Accor’s quality commitment and some companies, like Tetra Laval, have introduced rating systems to assess that performance.

INTERVIEW ULRIKA ROSEN TRAVEL MANAGER TETRA LAVAL

“Tetra Laval Group Transport &Travel, a purchasing department for energy consumption, water, waste disposal and so on. Accor within Tetra Laval, has put a lot of effort into helping suppliers in has achieved our best ‘green rating’ for its environmental their environmental performance through training and actions. information, but also by encouraging and enticing them to To drive further improvement, suppliers can benchmark against continuous improvements. other global players and then use their combined clout to We can now see how suppliers consider the environment to be demand more of their own suppliers. In turn, these suppliers can a natural part of their business; they are taking initiatives and make reciprocal demands that must be taken into account, out making great progress. There is no doubt that environmental of good business sense and a commitment to meeting performance yields savings. The hotel market, especially the customer demands.” global hotel chains, are very active in protecting the environment, using internal measurement management systems

WWW.ACCOR.COM 97 SUSTAINABLE DEVELOPMENT

HUMAN RESOURCE POLICY PRIORITIES pages 51 52 Employees 53 99 ACCOR AROUND 101 102 THE WORLD IN 2004 102 168,500 people of which 103 49% men 51% women

Managers 57% men 43% women

Training 320,129 days of training ACCOR: AN ATTRACTIVE EMPLOYER More than 120,000 people took Every year, Accor hires several thousand employees worldwide. Each of them is given a part in one or more training course personalized reception thanks to the “Accor Spirit” program. A commitment to personal ful- 2% of payroll fillment is rooted in the spirit of Accor and underlies its human resources policy. The Group’s wide range of activities, extensive geographical presence and broad array of businesses and brands provide willing employees with outstanding career prospects. The pos- sibility for them to climb the professional ladder, attend training programs, take part in a participatory approach to management and leverage a range of innovative tools are just A global network some of the reasons why Accor is an attractive employer. of 11 academies dedicated In 2004, the human resources network was fully involved in implementing new indicators for to enhancing employee skills objectively assessing progress made in carrying out policy priorities and for more broadly measuring the Group’s human resources performance across the entire organization.

TRAINING AT ACCOR Regardless of the level of education in a given region, Accor offers an average of one to two days of training France Latin America to each employee. 28,500 employees 33,500 employees The education index is based on a comparison of two types of which 47% men and 53% women of which 49% men and 51% women of data: Managers Managers • Child and adult literacy. 58% men and 42% women 38% men and 62% women • Percentage of children who have completed 10th grade. Training Training 4.8% of payroll 1.9% of payroll Expatriates 90 Average number of days of formal training per person Europe (excl. France) Africa/Middle East 1.2 days 2.1 days 1.4 days 2 days 40,000 employees 14,500 employees of which 43% men and 57% women of which 79% men and 21% women Managers Managers 58% men and 42% women 79% men and 21% women Training 2% of payroll Training 4.1% of payroll Expatriates 132 Expatriates 174

North America Asia-Pacific 22,500 employees 29,500 employees of which 29% men and 71% women of which 58% men and 42% women Managers Managers Level of education in the countries studied* 47% men and 53% women 64% men and 36% women Low* Average* High* Very high* Training 1.5% of payroll Training 1.3% of payroll Source: Unesco Institute Statistics in Human Development Index, 2004. Expatriates 12 Expatriates 220

WWW.ACCOR.COM 98 EMPLOYEES SUSTAINABLE DEVELOPMENT SUSTAINABLE q Diversity and equal opportunity

On October 22, 2004 in Paris, Accor signed the Corporate Diversity Charter properties, as in other Accor initiated by France’s Institut Montaigne. In this way, the Group—along with hotels in the Middle East, different beliefs and customs 40 other leading French companies—confirmed its long-standing commitment are respected, and the to combating discrimination and to hiring and promoting people from a wide range Group’s corporate values of cultural and ethnic backgrounds. and the Accor Spirit constitute the main common denominator. “Management scrupulously respects our cultural differences and A POWERFUL COMMITMENT TO SUPPORTING DIVERSITY MIDDLE EAST makes sure that we respect Dating back to the Group’s earliest days, this commitment to diver- Diversity is a reality in the each other’s,” says Michèle sity was formally expressed in 1995 in a shared declaration to Middle East. In the United Millot, a native of Mauritius combat discrimination issued jointly by Accor and employee Arab Emirates, for example, who is head housekeeper representatives of France’s leading trade unions. In the declara- the Mercure Jebel Hafeet of the complex. tion, both parties commit to fight against all forms of discrimination, in Al Ain includes 16 different whether based on an individual’s origin, gender, family situation, nationalities out of a total health condition, disability, customs, political opinions, union activity, ethnic or national group, race or religion. Following the workforce of 112 people, 2003 publication and distribution (in several languages) of The while the Novotel/Ibis Manager’s Benchmarks, which clearly expresses the principle of complex in Dubai, with equal opportunity, Accor introduced a specific training program for 370 employees, includes team managers. 40 nationalities. In these two

WWW.ACCOR.COM 99 SUSTAINABLE DEVELOPMENT

CELEBRATING SUCCESSFUL FRENCH PEOPLE “FROM DISTANT HORIZONS” Along with a number of other leading French companies, in France’s overseas possessions. HELPING THE HANDICAPPED ENTER THE WORKFORCE Accor took part in a forum Accor nominated six employees IN FRANCE AND THE UNITED KINGDOM organized by France’s High to the event, two of whom In France, a three-member team has been working to hire the physi- Council on Integration at the received awards—one for her cally disabled for more than ten years. As a result, more than 120 hand- National Assembly on involvement in the Sida icapped individuals were hired between 2002 and 2004, and the December 11, 2004. The purpose Entreprise AIDS prevention Accor workforce in France included more than 500 disabled of the forum was to showcase program and the other for an employees at year-end 2004. In addition, 38 people took part in the personal and professional outstanding personal and success of French citizens who career path that led her from a special Accor Academy recruitment seminar, which included a were born in other countries or Hong Kong to Paris. module designed to raise awareness about hiring the handicapped. In the United Kingdom, 305 department heads received training in 2004 to inform them about different kinds of disabilities and the EMPLOYMENT OF WOMEN AT ACCOR specific needs of the handicapped. The program will be pursued Percentage of women employees at Accor with department staff members in 2005. 51.1% 54.1% 54% 59.4% CULTURAL DIVERSITY Accor North America Regardless of their representation in the overall workforce, women Every year, Accor North America organizes diversity committees account for 50% to 60% of Accor with human resources managers. In 2004, some 78 trainers pro- employees in all regions. Proof of the Group’s commitment vided 2,081 employees with training in this area. One tangible to gender parity, these figures also example is an educational program called Sed de Saber (“Thirst reflect a special effort in countries where relatively few women for Knowledge”), which was introduced to provide English classes work in the services industry. in the workplace for Spanish-speaking employees. Aboriginals in Australia In Australia, 140 Aboriginals were hired in 2003-2004 and a new Countries in which the percentage agreement with the government concerning the hiring of 135 others of women in the workforce is: was signed for 2005-2006. Low Average High Very high Combating discrimination and promoting dignity in the UK Representation of women in service businesses in the countries studied In 2004, 261 managers took part in a day of training on non- Source: International Labour Organization, based on data from 44 countries discrimination and dignity in the workplace. that represent 76% of the Accor workforce.

WWW.ACCOR.COM 100 EMPLOYEES SUSTAINABLE DEVELOPMENT SUSTAINABLE q Employee health and safety

International medical coverage AFRICA Accor promotes the deployment of health coverage systems for all AIDS policy its employees worldwide. This coverage generally involves creat- As part of the “People, Planet, Profit” project, Accor in Africa par- ing a network of healthcare professionals in order to improve the ticipates in the fight against AIDS while respecting the fundamental quality of care provided and avoid the need for out-of-pocket pay- principles of non-discrimination and confidentiality. ments. Deployment of the system is moving forward according to In all hotels in sub-Saharan Africa, action plans in the areas of pre- each region’s needs and expectations. vention, awareness, screening and care provision are gradually being introduced: • Prevention initiatives focus on the free, discreet distribution of male and female condoms, along with information on their use and on the treatment of sexually transmitted diseases. • Following an awareness campaign targeting employees and others eligible for benefits, a number of hotels organized voluntary screening days during the year. These included the Ibis Douala in Cameroon, the Novotel Kigali in Rwanda, the Sofitel Ouagadougou in Burkina Faso and the Mercure Sarakawa in Togo.

WWW.ACCOR.COM 101 SUSTAINABLE DEVELOPMENT

Listening to and recognizing employees

ATTENTIVE TO EMPLOYEE CONCERNS ROUNDTABLES OPEN DOOR POLICY Accor has long been committed to assessing the opinions and Roundtables allow for direct The open door policy was commitment of its employees around the world. In 2004, more than interaction between employees introduced by Founding 19,000 hotel, services and Compagnie Internationale des Wagons- and management and promote Co-Chairmen Paul Dubrule Lits employees in Brazil, Europe, the United States and Australia a spirit of continuous and Gérard Pélisson and has took part in an in-house survey that allowed them to express them- improvement. In France, for been continued by Management selves on their work, job satisfaction and professional expectations example, these discussions Board Chairman Jean-Marc and projects. are organized by all hotel Espalioux. It enables employees The results showed that 92% of employees interviewed feel that brands at every level of the to express themselves without customer satisfaction is a key objective and that 85% say they are organization. Overall, more than their manager being present, if 150 roundtables were held in they so desire. An investigation proud to work for Accor. In addition, 78% say they are generally 2004 throughout the country. is then conducted to determine satisfied with their jobs, 79% are confident in Accor’s future and the facts and rapidly introduce 83% would recommend Accor to a friend seeking employment. corrective measures if necessary. Survey findings have been fully analyzed so that improvement plans can be introduced at the local level. Brazil: Accor was listed for the seventh time among the country’s most attractive employers in a survey conducted by Exame, a busi- RECOGNIZING EMPLOYEE ACHIEVEMENTS ness magazine. It was also selected as one of the five preferred A range of programs have been introduced to recognize and companies of women employees. reward employee initiatives: Spain: Accor Services ranked tenth in a survey of companies con- The Welcome card sidered “a great place to work.” The card is intended to support employee pride in being part of a global company that is uniquely positioned in the world of travel, tourism and corporate services. Since the alliance with Club Méditerranée, cardholders have been entitled to additional benefits. Employee loyalty Special events were organized in all countries to celebrate employees’ 10th or 20th anniversary with Accor and their contributions to its development. Bernaches awards Named for the species of wild geese depicted in the Accor logo, Bernaches awards were presented to 56 employees in 2004. The awards recognized their achievements in one of five categories corresponding to Accor’s values: professionalism, confidence, transparency, innovation and responsibility. In addition to these broad-based programs, local initiatives adapted to the host country culture have also been introduced. Participatory innovation

Launched in 2001, innov@ccor is an electronic suggestion box The following example from the Novotel Garden Plaza Saigon in designed to encourage employees to innovate constantly. The goal Vietnam, illustrates how the system works. At the hotel, customer is to share ideas that work so they can be applied as broadly as complaints were often handled case by case and individual possible. Approximately one suggestion out of three is accepted, solutions were not systematically shared with other team members. rewarded and deployed. In 2004, more than 7,500 suggestions Thanks to an employee suggestion, all solutions are now reported were submitted, of which over 2,400 were implemented. Used to the manager and included in training programs. Used in around the world, this management tool was introduced during the other Accor hotels in Asia, the suggestion may be extended to year in Egypt and in 300 Red Roof Inn hotels in the United States. other regions.

WWW.ACCOR.COM 102 program. The purpose istohelp government’s “firstjob” to supporttheBrazilian memorandum ofunderstanding Accor hassigneda and continuingeducationinitiativesinthehotels. the workplaceandtopromotehiring,apprenticeship,internship pledged tosponsoratleastonechild untilheorshehasentered Children’s Villages, each of the21AccorhotelsinMoroccohas As partofanagreementsignedwiththeMoroccanchapter ofSOS Partnership withSOSChildren’s Villages MOROCCO studies, whiletheotherswillbehiredbyAccorhotels. gram’s 26graduateswereawardedscholarships tocontinuetheir pose istoprotectyoungwomenfromprostitution.Four ofthepro- isanAccor-sponsoredtraininginitiativewhose mainpur- YCDP in1999, Accor hotels.Launched inpartnershipwithUNICEF inSeptemberbyparticipating wasorganizedinBangkok (YCDP) A graduationceremonyfortheYouth CareerDevelopmentProgram THAILAND Social actions aspects oftheagreement. ofspecific totrack implementation representatives with IUF needed. Informalmeetingsandexchanges arealsoheldregularly assoon as application oftheagreementandreportingdata managers inthevariouscountriesareresponsibleformonitoring in allAccorlocations.Operationalexecutivesandhumanresources these conventionsandtheprotectionofemployeerepresentatives ize. The agreementensurescompliancewithandfullapplicationof ventions onemployees’freedomofassociationandrighttounion- concerningILOInternational UnionofFood con- Workers (IUF) Accorsignedaworldwideagreement with the In 1995, AGREEMENT Social dialogue “FIRST JOB”PROGRAM PARTICIPATION INTHEBRAZILIANGOVERNMENT’S WITH THE IUF WITH THE university. skills intheGroup’scorporate enabling themtoacquirejob serious socialexclusionby young peopleinsituationsof The European Works Council COMMITTEE GROUP AND COUNCIL SOCIAL COUNCIL, WORKS EUROPEAN The SocialCouncil with employees’righttounionize. areheldatmeetingstodiscusscompliance Union. Roundtables fromallAccorhostcountriesintheEuropean 24 representatives developmentissues,wasattended by devoted tosustainable prepares theschedule forupcomingmeetings.The lastmeeting, andAccor, determinestheagendaand fromIUF representatives The Bureau,comprisedof sented byemployeerepresentatives. Council meetsonceayeartoconsidertransnationalissuespre- the representative, andanIUF the AccorManagementBoard part ofanagreementwiththeIUF. Co-chaired bytheChairmanof cils, itreviewsallGroupeconomicdata. Createdfrommorethan100works coun- the ManagementBoard. The Group Committee employee-relatedissues. tracting andotherimportant plans,subcon- tions. Itdiscussesinsurance,employeesavings meets regularlytoensureongoingrelationswithunionorganiza- corporate managementstructure.” employees rightswillbefullyrespected throughoutthe desire tobeaglobalemployerthat guaranteesthatits affiliates representandinlinewith thecompany’sexpressed constructive waytothebenefit of theAccorworkersour We lookforwardto continuing ourrelationshipina of thisrelation. Agreement onTrade isthecornerstone UnionRights(1995) and formtradeunionsasexpressed intheIUF/Accor Accor’s formalrecognitionofitsemployees’rightstojoin countries andAccoritself. membersandworkersinthose mutual benefitofIUF solutions tosuch problemshaveultimatelybeentothe believesthatnegotiated States, EgyptandAustralia.The IUF relations situationsincountriesasfaraparttheUnited to resolvethroughagreementspotentiallyseriouslabor network globally. This mechanism hasoftenallowedus membersandworkersintheAccor issues ofconcerntoIUF willingness todiscussopenly, franklyandconstructively hasalwaysrecognizedandwelcomedAccor’s The IUF and Accorthroughouttheyear. hotels inEuropetoregularexchanges betweentheIUF formal annualmeetingswithrepresentativesfromAccor allowed astandingrelationshiptodevelopthatrangesfrom Accor workersaroundtheworld.This recognitionhas representativeofunionized international tradeunionbody asthe “Accor hasforsometenyearsrecognized theIUF INTERVIEW SECRETARY GENE is aninformal,consensus-buildingbodythat meets twiceayearundertheChairmanof was created on June 10, 1996 as was createdonJune10,1996 RAL OF THE IUF THE RAL OF WWW.ACCOR.COM RON OSWALDRON 103

q SUSTAINABLE DEVELOPMENT EMPLOYEES SUSTAINABLE DEVELOPMENT Suppliers

RESULTS OF THE 2004 SUPPLIER SURVEY Overall sustainable development performance of 433 certified Accor suppliers, of which 134 in food and 299 in non-food.

18% Unfavorable

41% Average

41% Favorable Total purchases in the 15 countries in which Accor has a purchasing organization amounted to €2.6 billion. Most were made locally and half came from certified suppliers. OVERALL RATING SUSTAINABLE DEVELOPMENT PURCHASING CHARTER The Sustainable Development Purchasing Charter and Hotel Cleaning Charter were developed to involve suppliers in a virtuous 18% Unfavorable circle. The policy empowers suppliers and enables them to reduce risks from possible shortcomings in their operations. 32% Average 50% Favorable Review of events 2002: The Charter was distributed to all certified suppliers in the 15 countries in which Accor has a purchasing organization. It lists ENVIRONMENTAL PERFORMANCE 14 social and environmental practices that the Group wants to share with suppliers. For example, the first two social practices concern compliance with the principles of the ILO’s fundamental 18% Unfavorable conventions and non-discrimination with regard to gender, race, religion and political affiliation. Covering both food and non-food 42% Average purchases, the Charter also calls for suppliers to introduce an envi- 40% Favorable ronmental policy based on best industry practices. 2003: A survey was launched to assess the social and environmental practices of 137 suppliers. SOCIAL PERFORMANCE 2004: The survey was extended to include all 433 certified suppliers in France.

➜ Objectives for 2005: defining areas for improvement Define priority areas in which Accor wants to see an improvement in supplier performance. Support suppliers in deploying best social and environmental practices. Pursue a policy of purchasing fair trade, eco-label and other “sustainable development” products. Raise awareness across the Group and involve other departments (Hotel Technical Services, Marketing, etc.).

WWW.ACCOR.COM 104 A TRANSPARENT SUPPLIER SELECTION PROCESS FAIR TRADE BREAKFASTS AT ETAP HOTEL AND FORMULE 1 Example: choosing a green bean supplier In France, Etap Hotel and Formule 1 hotels support the policy, Calls for bids are held every three years in France. Bids are serving fair trade tea, coffee and hot chocolate in 490 hotels since assessed on three types of criteria: elimination criteria (for example, July 2004. a company’s financial stability), important criteria (such as sustain- In November, the Novotel, Mercure and Ibis chains also certified able development performance) and minor criteria. Selected sup- fair trade tea and chocolate suppliers, while Sofitel began serving pliers must comply with the principles of the Sustainable Malongo coffee for breakfast as well.

Development Purchasing Charter. Accor hotels are both large customers and important venues for SUPPLIERS FAIR TRADE promoting fair trade products. The practice of purchasing fair trade products began in 2003, with a commitment from Sofitel in France to serve Malongo coffee in its bars and restaurants. In 2004, other initiatives were launched in France as well as in Portugal, where 29 Sofitel, Novotel and Mercure hotels now serve fair trade coffee. SUSTAINABLE DEVELOPMENT SUSTAINABLE q

ACCOR’S SHARE OF FAIR TRADE TEA, COFFEE AND CHOCOLATE Two million informative CONSUMPTION IN FRANCE (June-December 2004) leaflets were distributed Tea Coffee Chocolate in Etap Hotel and Consumption of fair trade tea, coffee and chocolate at Accor (in metric tons) 1.3 t 38 t 23.4 t Formule 1 rooms in Total consumption of fair trade tea, coffee and chocolate in France second-half 2004. (Max Havelaar estimate) 54.4 t 1,925 t 36.8 t

Accor’s share of fair trade tea, coffee and chocolate consumption 2.39% 1.97% 63.59%

INTERVIEW JEAN-PIERRE BLANC GENERAL MANAGER, CMC MALONGO

“We’ve supported Accor’s pioneering role in promoting fair trade and training in fair trade issues, while we’re able to capitalize since its first commitment with Sofitel and the results speak for on Accor’s in-depth understanding of its network and skills in themselves. In 2004, some 21 metric tons of Malongo fair trade all aspects of the hotel business.” coffee were sold in the chain’s hotels. If sales of Malongo have been so strong in Accor bars and restaurants Accor, it’s because of the coffee’s ethical values, as well as its taste and aroma, which are much appreciated by customers. Accor teams benefit from our technical expertise

WWW.ACCOR.COM 105 SUSTAINABLE DEVELOPMENT

Accor hotels around the world consume water and energy, emit wastewater and greenhouse gases that attack the ozone layer, and Environment produce waste. Together, they have a major effect on the environment, although no one form of impact outweighs the others. Managing environmental impact requires the full involvement of employees, all of whom have a role to play. In 2004, a film was produced to raise employee awareness of environmental issues. Accor also launched two projects that are shaping its environmental commitment—an ISO 14001 certification process and the development of an environmental management system.

Cross-functional tools

Cross-functional tools must be deployed if the Group is to more efficiently improve its environmental performance and to share, implement and monitor the same high standards across the entire organization. Measures undertaken in 2004 will be pursued in 2005 with the rollout of the environmental management system, the ongoing deployment of the ISO 14001 certification process and an overhaul of the Hotel Environment Charter.

HOTEL CONSTRUCTION HOTEL OPERATIONS Environmental considerations are taken into account before con- Hotel Environment Charter struction begins and minimal impact standards have been set for The Hotel Environment Charter is the basis of Accor’s environ- the building phase. An integration study is also conducted to clearly mental policy with regard to hotel operations. The standard version identify: of the Charter covers Europe, South America, Asia, Australia and • Natural risks and other local constraints concerning the building. Egypt. In 2004, a regional version was prepared for sub-Saharan • Special local features, such as a lack of water or extreme climatic Africa (excluding South Africa) and deployed late in the year. In the conditions, which may require more stringent environmental stan- United States, a regional charter was created for the 1,200 Red dards in such areas as heat insulation, installation efficiency and Roof Inn and Motel 6 locations. water use. In all, 2,095 hotels were using either the standard or African ver- ➜ Commitment for 2005 sions of the Charter by year-end 2004 and applying an average of Apply the integration study to several hotel construction projects. 11.64 of the 15 actions contained in the standard version. ➜ Commitments for 2005 Redefine the standard Hotel Environment Charter and circulate the new version in 2006. Finalize implementation of the North American version in Motel 6 and Red Roof Inn locations.

WWW.ACCOR.COM 106 ENVIRONMENTAL CERTIFICATION Because of ISO 14001’s international scope, efficiency as a management tool and applicability to all businesses, Accor has strengthened its commitment to the environmental certification process. Certification has already been awarded to the following locations: Ibis : 19 hotels in Southwestern France. ENVIRONMENT Sofitel Athens Airport (Greece). INTERNATIONAL AUDUBON GREEN LEAF Novotel London West (UK). TOURISM PARTNERSHIP CERTIFICATION As a member of the Accor’s 11 Novotel, Sofitel, Novotel and Ibis Homebush Bay (Australia). International Tourism Motel 6 and Studio 6 locations Accor Thalassa in Quiberon, France (one seawater therapy insti- Partnership (ITP), Accor in Canada have received the tute and two Sofitel hotels). helped prepare the Audubon Green Leaf™ eco- Compagnie des Wagons-Lits in Spain, Italy and Austria. organization’s hotel siting rating. Created by TerraChoice ➜ and design guidelines. The and Audubon International, the Commitments for 2005 document, which will be certification program provides Accor Thalassa : sites in Hyères and Oléron to be certified in 2005 distributed across the hotel an audit for verifying a hotel’s and all owned and leased properties in France certified by year- industry, explains how to eco-efficiency. end 2006. integrate environmental Ibis: all owned and leased properties in France certified by year- considerations into

end 2006. DEVELOPMENT SUSTAINABLE the construction phase. Accor Services: headquarters and production site in France certi-

fied in 2005. q THE OPEN ENVIRONMENTAL RAISING EMPLOYEE AWARENESS MANAGEMENT SYSTEM Effective deployment of the environmental policy requires raising A management system (called OPEN for its French employee awareness of the issues. In 2004, the Sustainable acronym) was developed Development Department prepared a film entitled “Together, Ever in 2004 to provide the most More Responsible” based on interviews with managers and other useful data for quickly and employees around the world. Produced in eight languages (Arabic, regularly measuring the Group’s Chinese, English, French, German, Italian, Portuguese and environmental performance. Spanish), it will be distributed to all team members in 2005. Already implemented worldwide to track deployment of Hotel Environment charter actions, HQE® CERTIFICATION it will eventually be used in all regions to monitor water and In France, the HQE® (Haute Qualité Environnementale) energy use as well. building certification benchmark is currently in the development stage. As a member of the building owner group on the HQE® commercial building committee, Accor is helping to define standards for the hotel industry through a pilot project at the Novotel Montparnasse.

WWW.ACCOR.COM 107 SUSTAINABLE DEVELOPMENT

Water consumption

Water resources challenges vary from one region to another. With most Accor hotels located in regions concerned by water issues, appropriate solutions must be found.

In 2004, Accor consumed more than 35 million cubic meters of To achieve this objective, faucet and shower flow rates will be water (scope of reference on page 120). This corresponds to the measured and, if necessary, adjusted. Flow regulators will be domestic consumption of 850,000 Europeans. installed in more than half of owned and leased hotels in Europe, resulting in a reduction of 10% to 15% in water consumption. ➜ Commitment for 2004-2005 Reduce average consumption per occupied room by 5% between Recycling water in South America 2003 and 2005 for owned and leased hotels in Europe. At the Ibis Curitiba Batel in Brazil, consumption of drinking water has been reduced by 15% by recovering and treating wastewater from showers and sinks and reusing it in toilets. This recycling technique is being developed in new hotels in Brazil.

BREAKDOWN OF HOTELS 502 45 BY WATER SCARCITY (number of hotels)

490 1,282 1,581 596

WATER CONSUMPTION IN LITERS/DAY PER OCCUPIED ROOM, YEAR-ON-YEAR

Water consumed per occupied room declined by 10% in 2004, led by the Motel 6 and Red Roof Inn chains, which extended the use of flow-reduction faucets and toilet flush mechanisms. The 2004 figure was calculated using the same scope of reference 2003 2004 (i.e. the same countries) as in 2003.

2004 scope of reference Very low* Low* Average* High* (under 10%) (10% to 20%) (20% to 40%) (over 40%) 20 5 4 50 2 4 54 02

*Level of water stress. Source: Food and Agriculture Organization, 2003.

An indicator of water scarcity, water stress is defined as the percentage of a country’s annual renewable water supply that is consumed every year for farming, industry and domestic use.

Germany, for example, uses more than 40% of its annual renewable resources, placing it in the high stress category, while France, at 20% to 40%, is in the moderate group. Sub-Saharan Africa, one of the regions with the highest water stress, also often lacks wastewater treatment infra- Formule 1 Etap Hotel Motel 6 RRI Ibis Mercure Novotel Sofitel structure. In 2004, Accor completed an extensive audit of Studio 6 water treatment plants in its 18 hotels in the region (excluding South Africa which has an efficient public network). WATER CONSUMPTION IN LITERS/DAY PER OCCUPIED ROOM IN 2004 ➜ Commitment for 2005 The high rates of consumption for US hotels and Sofitel locations are due to the fact that: 1) most hotels in the United States include laundries, lawns and swimming pools; and 2) Renovate wastewater treatment plants in the Sofitel hotels deliver upscale services (gourmet restaurants, swimming pools) and cater to Group’s three hotels in sub-Saharan Africa. leisure customers.

WWW.ACCOR.COM 108 Energy consumption

The consumption of energy from non-renewable sources is a global challenge. Accor now integrates energy use into its operational planning, while also taking into account customer comfort and its long-term profitability. ENVIRONMENT For a standard 150-room hotel located in a temperate climate, Air-conditioning: examples in Africa energy consumption represents roughly 4% to 5% of total operat- At the Novotel Cotonou in Benin, the heat produced by air- ing costs. Effectively managing that consumption can reduce the conditioning units is recovered to produce enough domestic hotel’s energy-related operating expenses—and therefore its energy hot water to meet all of the hotel’s needs. bill—by up to 10%. In 2004, Accor consumed 3 million MWh of energy (scope of ref- At the Sofitel Taba Heights in Egypt, room air-conditioners erence on page 120), equivalent to the domestic consumption of automatically shut off whenever a window is opened. 350,000 Europeans. To meet its energy conservation commitments, Accor and its sup- ➜ Commitments for 2005 pliers are working together to identify the most energy-efficient light- Reduce average consumption per room in owned and leased ing systems that also meet esthetic and brightness criteria. These hotels in Europe by 5% between 2004 and 2006. include sub-compact fluorescent lamps, high performance spot- Equip five new hotels with solar heating panels to produce domes- lights and light emitting diodes. Brand specifications will be tic hot water. reviewed in 2005 to include these new standards, with the goal of DEVELOPMENT SUSTAINABLE equipping half of all owned and leased hotels in Europe by year end. q

RED ROOF INN AND MOTEL 6 ENERGY-EFFICIENT 0 050 0 LAMPS

Compact fluorescent lamps are now used in all Red Roof Inn hotels as well as in new and renovated Motel 6 locations. As a result, ENERGY CONSUMPTION IN KWH/YEAR PER ROOM energy consumption has Energy consumption per room declined by 4% for the year. The decrease was due to milder climatic conditions than in 2003 as well as to the installation of high- been decreased by 170 kWh performance equipment, notably energy-efficient lamps. Consumption in 2004 was per room per year. calculated using the same scope of reference (i.e. the same countries) as in 2003. 2003 2004

2004 scope of reference 4 54 42 4 4222 0 42 24

SOLAR ENERGY PRODUCING DOMESTIC HOT WATER During the year, 28 Accor hotels were fitted with a total of 2,370 square meters of solar heating panels to produce domestic water, thus generating overall energy savings of 1,120 MWh. Formule 1 Etap Hotel Motel 6 RRI Ibis Mercure Novotel Sofitel Photovoltaic collectors were Studio 6 installed on the Ibis Porte de Clichy Centre in Paris. ENERGY CONSUMPTION IN KWH/YEAR PER ROOM IN 2004 Most energy is used for heating and/or air-conditioning, hot water and lighting. The greater amounts consumed at Sofitel reflect the hotels’ more spacious interiors, which must be heated or air-conditioned.

WWW.ACCOR.COM 109 SUSTAINABLE DEVELOPMENT

GREENHOUSE GAS EMISSIONS IN KG CO2 Waste EQUIVALENT A YEAR PER ROOM IN 2004

Accor has deployed systems for tracking and controlling emissions of waste and pollutants, and is ■ Indirect emissions working with local authorities and suppliers to further 20 22 (from electricity consumed in hotels) improve its performance in this area. ■ Direct emissions (from gas and fuel oil burned in hotels)

2 0

2003 2004 GREENHOUSE GAS EMISSIONS The 4% decline in greenhouse gas emissions resulted from a reduction Since Accor operates in countries with high levels of carbon dioxide in per-room energy consumption. Figures for 2004 were calculated using emissions per kWh of electricity, hotels must further reduce their the same scope of reference (i.e. the same countries) as in 2003. energy consumption. This is especially true in the United States, where an energy management system is currently being tested in more than 30 Motel 6 locations. By reducing air-conditioning in unoccupied rooms, the FLUIDS IN INSTALLATIONS CONTAINING system helps generate savings of 1,300 kWh per room per year. MORE THAN 2 KG OF FLUIDS In 2004, Accor emitted 1,027,000 metric tons of carbon dioxide.

REFRIGERANT FLUIDS 56% Hydro-chlorofluorocarbons Hotels use refrigerant fluids in air-conditioning units, as well as in cold storage rooms, refrigerators, mini-bars, beverage vending 26% Hydro-fluorocarbons machines and other cooling installations. When emitted into the atmosphere, most of these fluids (CFCs and HCFCs) attack the 18% Chlorofluorocarbons ozone layer. In 2004, Accor began taking inventory of refrigerant fluids in its facilities in France. ➜ Commitments for 2005 Extend the inventory of cooling systems to other countries in Europe. Scope of reference: owned and leased Ibis, Mercure, Identify the best available alternative technologies to replace high- Novotel and Sofitel hotels in France. risk equipment.

WWW.ACCOR.COM 110 RECOVERING ORGANIC WASTE The recovery of organic waste, which represents a large percentage of hotel waste, is not widespread because of a lack of local recovery infrastructure. An environmental information sheet encourages hotels to compost organic waste if possible. In Australia, ENVIRONMENT for example, worms are used in composting, while in the United States, lawnmowers crush green plant waste so that it can be left to decompose into soil nutrients.

WASTE SORTED BY HOTELS APPLYING THE HOTEL DEVELOPMENT SUSTAINABLE ENVIRONMENT CHARTER (as a %)

40245 q

Newspaper Cardboard Glass Toner cartridges Cooking oil ■ 2003 ■ 2004

QUANTITY OF WASTE GENERATED (in grams)

2400 0 220 40 5052 225 2 WASTE PRODUCTION

■ Sofitel Initiatives have been launched to: ■ Novotel ■ Mercure Improve recovery of packaging, organic waste and other ■ Ibis household-type refuse. Ensure that hazardous waste is eliminated through appropriate channels. Reduce waste at the source. With regard to hazardous waste, during the year Accor selected channels for processing used batteries and neon tubes in France. This will provide a clearer picture of how many of these waste products

For a breakfast For lunch or dinner For an occupied room are actually processed each year. ➜ In 2004, waste audits were conducted for the Ibis, Mercure, Novotel and Sofitel Commitments for 2005 chains as part of a 10% waste-reduction program initiated by France’s Agency Certify treatment channels in France for electrical and electronic for Environment and Energy Management (ADEME). Corrective action plans will equipment. now be implemented. Conduct waste audits of the Etap Hotel and Formule 1 chains.

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FRENCH POLYNESIA, SOFITEL IA ORA MOOREA Biodiversity

As a leader in the tourism industry, Accor has to play an active role in protecting the natural heritage of its host regions. Even if the vast majority of Accor hotels are located in city centers and outer urban areas, 18% of them are in biodiversity-sensitive areas as defined by Conservation International’s Center for Applied Biodiversity Science.

A hotel built in a location that is especially rich in biodiversity must reduce its impact as much as possible and enhance the site, with the agreement of the local authorities, to facilitate its preservation. INTERVIEW PHILIPPE VALETTE

For example, the Sofitel Ia Ora Moorea in Polynesia, which is plan- NAUSICAÀ, THE FRENCH NATIONAL SEA ning to build new bungalows, must take drastic measures to pro- EXPERIENCE CENTRE tect the natural environment. Since 2002, Accor, in partnership with the Nausicaà association, has been involved in programs to raise employee and customer “Since its opening in 1991, Nausicaà, the French National awareness of the need to protect the sea bed. Tested for the first Sea Experience Centre, has focused on raising public time at the Sofitel Hurghada, the partnership has gradually been awareness of the need to effectively manage the world’s extended to other hotels on the Red Sea, including the Novotel and oceans. The partnership with Accor has enabled us to Sofitel Sharm el-Sheikh, the Sofitel Taba Heights and the Sofitel broaden our mission. The excursions and other activities Dahab, as well as to locations in Polynesia. organized for customers at the Sofitel Hurghada, as well as staff training programs on this pilot site, are helping to get everyone fully involved in environmental protection. ENVIRONMENTAL PROTECTION MEASURES In addition, the partnership strengthens Accor’s sustainable development policy by helping to preserve the natural Accor’s many locally-initiated surroundings of its seaside hotels for leisure customers. measures to protect the environment can be found Beginning in 2005, the Novotel and Sofitel Sharm el-Sheikh, at www.accor.com. the Sofitel Taba and the Sofitel Dahab on the Red Sea, as well as the Sofitel Ia Ora Moorea in Polynesia, will offer these types of activities for their customers. This ambitious project is crucial for our future and thus a top priority for Nausicaà.”

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COLOMBIA, SOFITEL SANTA CLARA, CARTAGENA q Architectural integration

Preserving the wealth and diversity of a region’s cultural heritage is essential for the tourism industry. That’s why Accor is committed to harmoniously integrating its hotels into the surrounding architectural environment.

LOCAL INTEGRATION Accor has been building hotels since the late 1960s. Although originally located on the outskirts of cities, hotels are increasingly built in downtown areas. As a result, construction standards have been adapted to enhance architectural quality and help hotels blend into their surroundings. PROTECTING THE CULTURAL HERITAGE Several hotels are located near sites classified as world heritage properties by UNESCO, an organization that Accor has partnered since 1999. A number of hotels, including the Sofitel Palais Jamaî Fès (Morocco), the Sofitel Cartagena Santa Clara (Colombia), the Sofitel Frances Santo Domingo and Nicolas de Ovando (Dominican Republic) and the Novotel Budapest Centrum (Hungary) are themselves historical landmarks that are included on the UNESCO list. When renovating these outstanding buildings, Accor went to great lengths to protect their cultural treasures.

WWW.ACCOR.COM 113 SUSTAINABLE DEVELOPMENT Local Communities

Corporate humanitarian actions

Since 2003, Accor’s corporate philanthropy policy has been organized around two priority action areas—child sponsorship and aid to local communities in need.

FIRST AREA OF ACTION CHILD SPONSORSHIP, ALONGSIDE PLAN For Plan, an international community development organization that focuses on children, Accor provides expertise and access to its network to help recruit new sponsors. A child may be sponsored by Accor employees or customers, acting either individually or with others. In 2004, a pilot operation was launched in 300 hotels in France INTERVIEWS and the United Kingdom, where employees wholeheartedly supported the principle of child sponsorship by undertaking projects to CHRISTIANE SCRIVENER — CHAIRMAN OF THE BOARD OF raise awareness among customers and suppliers. The initiative has DIRECTORS, PLAN FRANCE, FORMER MINISTER AND FORMER since been extended to Accor locations in Germany and Belgium. MEMBER OF THE EUROPEAN PARLIAMENT AND EUROPEAN In six months, 382 children have been sponsored: COMMISSIONER • 282 in France, of whom 52% by employees and 48% by cus- “Accor and Plan have created a model partnership. It will help tomers and suppliers. us not only in assisting children but also in persuading other companies to take a similar approach.” • 100 in the UK, of whom 73% by employees and 27% by customers and suppliers. NORMA JOHNSTON The importance of the partnership was underlined by the natural COMMUNICATION AND MARKETING MANAGER, PLAN disaster that struck Southern Asia on December 26. In Thailand, “This partnership allows Plan to access a global network of Accor is supporting eight severely damaged schools between people who are motivated to act on behalf of children. The Phuket and Phang Nga through a two-year program that will re- partnership has enabled Plan to educate staff and Accor equip the facilities and introduce new teaching programs. customers about the role both Plan and Accor play in communities around the world. As the partnership expands ➜ Objectives for 2005: extend the partnership in France to all hotels to include more countries, we foresee the impacts and that wish to participate, as well as to other Accor divisions. In Europe, benefits increasing accordingly for Accor and Plan and the involve three or four new countries in the program. In the rest of the children and their communities in which Plan works worldwide.” world, launch at least one major operation per continent.

WWW.ACCOR.COM 114 SECOND AREA OF ACTION AID TO LOCAL COMMUNITIES IN NEED, ALONGSIDE THE RED CROSS Deploying its expertise and core competencies, Accor is involved in a large number of actions with the Red Cross: • At the local level, providing logistical support. In August 2004, for example, Compagnie des Wagons-Lits donated 6,000 plates and dishes to reception centers managed by the Seine-et-Marne Red PROVIDING Ambassador of the French Cross chapter near Paris. TRAINING SITES Red Cross, and John Du • At the national level, At the launch of World First Monceau, Senior Vice- – In France, Accor supports Red Cross awareness campaigns, such Aid Day on September 11, Chairman of the Accor LOCAL COMMUNITIES as the event held at the Sofitel Paris Porte de Sèvres on World First 2004 at the Sofitel Paris Management Board in charge Aid Day, and takes part in fund-raising efforts. In 2004, Accor Porte de Sèvres, customers, of Sustainable Development. € Services gathered more than 80,000 through a meal-voucher employees and visitors donation drive that was held for the third year in a row. were given an introduction – In Spain, more than €23,000 was raised for the Red Cross FOR MORE to basic first aid practices. INFORMATION through an operation called “Comparte tu Comida”. The event, which received ➜ Objectives for 2005: Implement a framework agreement with national media coverage, www.accor.com the International Federation of Red Cross Societies and develop was attended by Dr. Marc partnerships with national societies. Gentilini, Adriana Karembeu, SUSTAINABLE DEVELOPMENT SUSTAINABLE q Local initiatives

INDONESIA Combating hunger with Bancos Alimentos A Tree for a Child Accor Services’ Ticket Car brand supports Bancos Alimentos Created by Accor Indonesia teams in 2001, “A Tree for a Child” charitable programs to provide food for thousands of Brazilians. has two objectives: fighting poverty and protecting the environ- Every month, it donates funds to purchase gasoline for the food ment. The program is financed through the sale of recycled items bank network’s trucks, thus ensuring that food is delivered regu- in hotels across the country and the planting of fast-growing trees. larly and efficiently. In 2004, it provided education for 67 children and medical care, ARGENTINA with a dedicated hospital, for 48 others. Maria de la Esperanza Foundation BRAZIL Accor Services Argentina donates food and gasoline vouchers to Childhood Dream missionaries from the Maria de la Esperanza Foundation, which The “Childhood Dream” educational center, built by Accor in a part- organizes mobile soup kitchens in some of the country’s most nership with the São Paulo Mayor’s Office, was inaugurated in late remote regions. October 2004. The center is open to 200 children from Gato, a NORTH AMERICA AND MEXICO disadvantaged downtown neighborhood. No Room for Hunger From November 1 through 19, all Accor employees in the United States, Canada and Mexico were able to access a website for No Room for Hunger, an international hunger relief organization. Employee and corporate donations financed roughly 600,000 meals. In the first two weeks of December, Accor North America also raised $25,000 for Toys for Tots, which distributes toys to thousands of children.

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Combating sexual tourism involving children

Since 2001, Accor has conducted joint actions with ECPAT (End Child Prostitution Pornography And Trafficking of Children for Sexual Purposes). The ECPAT network includes 72 organizations in 65 countries around the world.

Awareness and training programs for customers and employees have been launched in Europe (France), Asia (Thailand, Laos, Cambodia and Indonesia), Latin America (Mexico, French Guiana INTERVIEW LUC FERRAN and Brazil) and the Caribbean (Dominican Republic). Initiated ECPAT INTERNATIONAL, TOURISM following the signing of the ECPAT Code of Conduct by Accor in COORDINATOR Asia, these programs resulted in training for 5,125 employees in 45 Accor hotels in 7 countries. The Group also took part in two “Overall, Accor has demonstrated a strong commitment ECPAT campaigns for French tourists, distributing one million to the Code and we are very happy with the way that leaflets through the Carlson Wagonlit Travel network of travel Accor has not only implemented the Code but also agencies. been honest and open in evaluating themselves. With Carlson Companies having signed the Code of Conduct dur- The annual report on the implementation of the Code ing the year, Carlson Wagonlit Travel now publicizes its commit- (completing this is one of the six criteria of the Code), ment on ticket folders distributed to as many as five million travelers for example, was very thorough in 2004 and such around the world. monitoring and evaluation is very important to an honest In October 2004, for the second year in a row, a Charity Walk was and efficient child protection program of any kind. held in Bangkok to raise funds for an ECPAT-managed child shelter. The sheer number of Accor staff trained is high and we Collection boxes have been installed in all Accor hotels in Thailand are proud of this. Of course, there is never enough hotel to raise funds for ECPAT educational programs. staff trained on the issue of commercial sexual exploitation of children, but this is a number that Accor, ➜ Objective for 2005: ECPAT and other child protection stakeholders can be Extend and expand Accor’s commitment by signing the ECPAT proud of. The greater the number of staff trained to Code of Conduct for the protection of children against sexual spot and repudiate child sex tourism, the greater the exploitation in the tourism industry in at least three new coun- impact the Code is having in terms of fighting sexual tries, and distribute dedicated materials for that purpose. exploitation of children.”

WWW.ACCOR.COM 116 Supporting local economic development

Accor’s sustainable development policy is designed to maximize the positive impact of its activities while minimizing possible negative effects. To achieve this goal, it supports the economic development of its host communities by promoting local hiring and purchasing initiatives and supporting micro-projects. The policy with regard to corruption LOCAL COMMUNITIES is part of the Group’s risk prevention strategy.

EXAMPLE OF A HOTEL PROJECT: THE BERIMBAU PROGRAM The Berimbau program was launched in July 2003 in cooperation Combating corruption with the Brazilian government to facilitate the integration of people from disadvantaged backgrounds and generally improve living The Group’s anti-corruption policy is presented in the conditions through projects that create jobs and generate addi- The Manager’s Benchmarks, a booklet distributed in all host tional income. As a result, 3,000 direct jobs have been created and DEVELOPMENT SUSTAINABLE countries. Accor is also a member of the French Council 7,000 people have benefited indirectly thanks to measures to of African Investors (CIAN), chaired by Gérard Pélisson. strengthen local associations, invest in education, support the local q Companies that sign the CIAN charter pledge to “discourage production chain and promote local crafts. To raise customer and employees from engaging in corruption, extortion and any employee awareness of the program, a Berimbau project coordi- other form of misconduct.” nator has been appointed in each of the region’s two Accor hotels. To strengthen this commitment, Accor signed an agreement TICKET RESTAURANT: A TANGIBLE EXAMPLE OF SOCIAL SUPPORT FROM ACCOR SERVICES with France’s Central Service for the Prevention of Corruption in 2004 to: According to a study by the Institute of International Social Cooperation, Ticket Restaurant meal vouchers help increase pur- • Develop a map of corruption risks by country and business. chasing power and provide real social benefits. Meal and food • Create and regularly update a document on laws and regu- vouchers are used every day by nearly 13 million company employ- lations in France and other countries. ees around the world. For employers, they represent a modern, effi- • Clearly define all forbidden unlawful practices. cient way to motivate and retain staff, while for governments, they • Provide employee training in this area. address concerns about public health and economic transparency. Lastly, these vouchers create a social pact among companies, employees and local communities. ACCOR HOTELS BY RISK AREA SUPPORTING MICRO-PROJECTS Agrisud 52% Moderate-risk areas Accor provides backing for Agrisud, a French association with (over 7.5) sustainable economic development expertise. Agrisud helps devel- 30% Average-risk areas oping countries achieve economic and social independence (5 to 7.5) through its support for businesses that enjoy long-term growth prospects. Since its founding in 1985, the association has set up 16% High-risk areas more than 13,000 micro-projects and assisted in the creation of (2.5 to 5) nearly 400 small farming businesses. 2% Very high-risk areas (under 2.5)

Corruption risk indexes prepared by Transparency International.

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Integrating local cultures OFFICIAL PARTNER TO LILLE, THE 2004 A firm believer in cultural diversity, Accor provides local support EUROPEAN CAPITAL for a wide range of initiatives intended to protect and showcase OF CULTURE Elected European Capital its host countries’ cultural assets. by the Ministers of Culture of European Union member states, Lille was host to a wide range of artistic festivals in 2004. Accor was an official partner to this exceptional cultural event.

MEMORIES OF THE FUTURE Since 1999, Accor has supported UNESCO’s Memories of the Future project by helping to restore three world heritage sites and monuments. One project in the Medina in Tunis, Tunisia is now completed, while work continues on the other two—the Prince Gong Palace in Beijing, China, and the Bat Chum temple in Angkor, Cambodia. In the temple project, young Khmers are taking part in the renovation project, thus providing them with training and jobs linked to the protection of their cultural heritage. SHOWCASING AFRICAN TALENT Through a range of contemporary African art forms, 4,000 employees in Sofitel, Novotel, Mercure and Ibis hotels in sub-Saharan Africa are sharing opportunities to discover local culture and art with customers by: • Providing exhibition space for contemporary artists and helping In 2004, more than 15 events were organized with Radio France to promote them to hotel guests and the general public. International, the French Association for Artistic Action (AFAA), the • Creating events in the hotels, including shows, poster displays, Intergovernmental Agency for the French Language and a number openings, libraries, videos and other activities. of other partners.

WWW.ACCOR.COM 118 Sustainable development ratings agencies

In 2004, Accor was again included in the three major socially responsible investment indexes: DJSI World & Stoxx, FTSE4Good and ASPI Eurozone. It was also listed for the first time in the ESI index. LOCAL COMMUNITIES

FTSE4Good Index Series

SAM VIGEO EIRIS ETHIBEL SAM Research Inc. assesses The ASPI index is comprised The Ethical Investment The Ethibel Sustainability companies for possible of the 120 listed companies Research Service (EIRIS) Index (ESI) provides a inclusion in the Dow Jones with the highest Vigeo ratings, conducts studies used by comprehensive perspective

Sustainability Indexes. In its which range from – to ++. FTSE4Good in ranking the on the financial performance DEVELOPMENT SUSTAINABLE listing, Accor ranks first Accor’s most recent Vigeo companies in its index. of the world’s leading

among hotel operators and ratings were ++ for human In 2004, Accor was again companies in terms of q second for the entire hotel resources, civil society and included in the FTSE4Good sustainability for institutional and restaurant industry. From human rights, + for the index, which includes only investors, asset managers, a poor-average-best (p-a-b) environment and customers 25 French companies out banks and retail investors. rating scale, Accor scores a and suppliers, and = for of a total of 265 listed First published on June 27, “b” (“best in industry”) for its corporate governance. European companies. 2002, it lists companies economic and environmental In 2004, Vigeo gave Accor top considered to be sustainable policies, and an “a+” (“upper marks for the hotel industry. development pioneers. industry average”) for its In 2004, the index included social policies. 180 companies.

STUDY CONDUCTED AN INVESTOR’S OPINION BY FRANCE’S BMJ CORERATINGS “Over the past two years, we gender parity, to environmental and results using a broader feel that Accor has been one of and human rights issues. geographic base. Lastly, In 2004, BMJ CoreRatings, the most committed European Accor has been especially its policy of obtaining the European non-financial hotel and leisure industry innovative in training commitments from suppliers ratings agency, ranked Accor companies in the area of employees, respecting their and subcontractors should first among hotel operators sustainable development. rights, combating sexual be expanded from the in a study entitled “Tourism With a highly decentralized tourism and minimizing the experimental stage in France Industry & Developing organization spanning the environmental impact of its and gradually applied Countries… Mind the Gap.” globe, Accor has successfully operations through programs worldwide.” The purpose of the study defined and introduced to reduce consumption and was to assess the impact of meaningful actions that raise customer awareness. nine tourism industry leaders respond to the major challenges After the 2003 Report, which facing the industry. These showed a true concern for on sustainable development Stéphane PREVOST challenges specific to range from employee-related accuracy, we’re now waiting for Manager CSRI – European Equities emerging countries. concerns, like turnover and Accor to publish its indicators Ixis Asset Management

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Group Environmental Indicators

Unless otherwise specified, the following indicators relating to water, energy • Operations of the Lenôtre production site in Plaisir, France. and greenhouse gas emissions concern 95% of owned or leased proper- The Services business is not included in the indicators as it has little impact ties (compared with 87% in 2003) and 33% of managed properties (none on the environment. In France, for example, the impact is limited to the in 2003). These include: approximately 200 metric tons of paper to print service vouchers. • Hotels in France and other European countries (eight more countries than Indicators corresponding to the action points listed in the Hotel in 2003), as well as in North America, South America (three countries in Environment Charter are marked with a [c]. They concern owned hotels, 2004, compared with none in 2003) and other countries (14 in Africa, nine hotels operated under management contracts and franchised operations. in Asia and one in the Pacific region, compared with none in 2003). The regions covered in 2004 are Europe, Latin America, Asia, the Pacific • Seawater therapy institutes in France. and Egypt. • Operations of Compagnie des Wagons-Lits in Austria, France, Italy, Portugal and Spain.

France Europe North South Asia Pacific Africa Total Total WATER AND ENERGY (excl. France) America America 2004 2003 owned managed owned managed owned managed owned managed owned managed owned managed owned managed Number of establishments 743 530 16 988 36 30 62 4 31 49 2,489 2,181 Water consumption (thousands of cubic meters) 5,747 4,621 174 17,722 513 445 3,897 226 474 1,749 35,568 29,096 Energy consumption (MWh) 707,085 742,814 26,853 1,101,124 42,438 28,580 227,587 8,117 33,361 141,728 3,059,687 2,483,971 Renewable energy production (MWh) 737 54 118 125 84 1,118 1,100

France Europe North South Asia Pacific Africa GREENHOUSE (excl. France) America America Total Total GAS EMISSIONS 2004 2003 owned managed owned managed owned managed owned managed owned managed owned managed owned managed Direct greenhouse gas emissions (metric tons of CO2 equivalent) 35,909 75,369 1,759 80,397 226 155 2,279 651 24 6,181 202,950 189,672 Indirect greenhouse gas emissions (metric tons of CO2 equivalent) 36,926 163,225 7,087 399,095 3,894 2,405 130,735 384 23,164 57,221 824,136 557,960

France Europe North South Asia Pacific Africa BIODIVERSITY AND (excl. France) America America Total Total LOCAL INTEGRATION 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 Number of establishments 1,042 1,018 665 768 0 21 111 124 52 51 80 48 20 18 1,970 2,048 Respect of Accor’s design charter for hotel signs and signposting to the hotel [c] 90% 97% 98% 93% 90% 94% 96% 71% 78% 88% 77% 93% 100% 92% 94% Upkeep and enhancement of the hotel’s green areas [c] 88% 99% 98% 95% 100% 96% 97% 90% 95% 85% 89% 100% 100% 92% 97% Planting of at least one tree near the hotel [c] 65% 57% 79% 61% 52% 71% 76% 63% 49% 57% 33% 93% 83% 70% 59% Measures undertaken to protect the local environment [c] 34% 27% 50% 38% 62% 43% 55% 57% 47% 51% 48% 86% 83% 42% 35% Information to customers about environmental protection initiatives [c] 56% 70% 88% 74% 52% 80% 85% 65% 78% 89% 60% 100% 100% 70% 72%

WWW.ACCOR.COM 120 Offices/ WASTE MANAGEMENT Restaurants Hotel rooms Total The Ibis, Novotel, Mercure and Sofitel chains are involved Reception areas in a program in France sponsored by the national Agency for the Environment and Energy Management (ADEME) aimed Paper 5% 26% 70% 7% at reducing by 10% the amount of waste generated by companies or else increasing by 10% the amount of resources Non- Cardboard 1% 4% 5% 12%* recovered and reused. The goal is to achieve these results hazardous within 24 months through action plans. Audits conducted industrial Glass 5% 6% 10% 4% by independent firms identified the amount of waste produced waste as Packaging by each hotel activity and process. Once the results have been a % of waste 9% 14% 10% 3% production, (excl. cardboard) analyzed, Accor intends to extend action plans to drive similar by family improvements across the hotel base. Organic matter 50% 15% GROUP ENVIRONMENTAL INDICATORS GROUP ENVIRONMENTAL *90% of cardboard comes from packaging for transported goods. Residual waste 30% 50% 5% 59%

France Europe North South Asia Pacific Africa (excl. France) America America Total Total 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 Toner cartridges collected 17,250 17,250 Batteries collected Special Since 2004, data have been supplied by service providers who collect and process (in kg) 1,305 1,305 waste these kinds of waste. Cooking oil collected (in liters) 206,195 206,195

France Europe North South Asia Pacific Africa (excl. France) America America Total Total 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 SUSTAINABLE DEVELOPMENT SUSTAINABLE Number of establishments 1,042 1,018 665 768 0 21 111 124 52 51 80 48 20 18 1,970 2,048

Sorted collection of paper, q newspapers and magazines [c] 61% 56% 91% 90% 86% 96% 100% 88% 94% 88% 73% 14% 28% 74% 73% Sorted collection of cardboard [c] 72% 70% 89% 90% 81% 97% 98% 82% 84% 76% 77% 36% 39% 79% 79% Sorted collection of glass [c] 73% 69% 93% 93% 71% 74% 89% 61% 75% 79% 75% 57% 44% 80% 79% Sorted collection of toner cartridges [c] 91% 94% 98% 97% 86% 87% 94% 57% 78% 76% 79% 50% 100% 92% 94% Sorted collection of used oil [c] 91% 97% 96% 96% 81% 54% 96% 76% 78% 91% 96% 71% 59% 91% 95% Recycled paper used whenever possible [c] 79% 74% 83% 48% 67% 88% 68% 96% 84% 45% 67% 43% 72% 80% 64%

France Europe North South Asia Pacific Africa IMPROVING (excl. France) America America Total Total ENERGY EFFICIENCY 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 Number of establishments 1,042 1,018 665 768 0 21 111 124 52 51 80 48 20 18 1,970 2,048 Internal control of water [c] 92% 90% 97% 94% 86% 93% 97% 94% 94% 83% 69% 100% 100% 94% 91% Internal control of energy [c] 94% 89% 97% 95% 90% 35% 99% 94% 94% 77% 79% 100% 100% 91% 92%

France Europe North South Asia Pacific Africa ENVIRONMENTAL (excl. France) America America Total Total MANAGEMENT 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 ISO 14001 certified 20 2 2 2 26 Environmental establishments certification Other certification 211 114

Number of establishments 1,042 1,018 665 768 0 21 111 124 52 51 80 48 20 18 1,970 2,048 Environment Charter Average number of actions 11.30 11.18 13.20 12.07 11.32 11.90 13.33 10.80 11.33 11.30 10.21 11.40 12.07 11.99 11.64 out of 15

Raising employee awareness of the environmental policy 57% 52% 88% 67% 76% 80% 87% 65% 63% 89% 54% 100% 100% 63% 60%

[C] = Included in the Hotel Environment Charter.

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Accor’s people, in France

CORPORATE SOCIAL REPORT-FRANCE The Consolidated Corporate Social Report-France consolidates data from the 2004 social reports prepared, in compliance with French law, by French subsidiaries that are at least 50%-owned and that have at least 300 employees. It covers 72% of employees in France.

EMPLOYMENT (data at December 31, 2004) Total number of employees(1) 20,428 Percentage of women 55% Percentage of men 45% Average number of employees(2) 20,659 Number of full-time employees 17,709 Number of part-time employees 2,719 Number of hirings under permanent contracts in 2004 4,636 Number of hirings under fixed-term contracts in 2004 3,489 Number of foreign employees(4) 2,357 people representing 11.5% of the total at December 31, 2004 Redundancy plan introduced in the onboard train services business (Compagnie des Wagons-Lits), further to SNCF closing two Italy-bound lines for which Accor subsidiary Sud Europe Services provided Redundancy plans subcontracting services: • Number of employees laid off in 2004: 116 • Number of employees inplaced in 2004: 47 • Number of employees taking early retirement: 17

Absenteeism(3) By cause: Sick leave 6% Workplace accidents and accidents commuting to/from work 1% Maternity, paternity or adoption leave 2% Compensated absences (family events) 2% Non-compensated absences (unpaid leave, parental leave) 1%

WORKING HOURS (terms negotiated with union organizations) Hotels Workweek: 39 hours for non-managerial employees 217 days for managers Services Workweek: Travel agencies – Compagnie des Wagons-Lits 35 hours for non-managerial employees Head offices 217 days for managers Overtime For non-managerial employees: Compensated in the form of days off For managers: Annual salary; no overtime paid

WWW.ACCOR.COM 122 COMPENSATION 2003 incentive bonuses Number of beneficiaries(5): 10,052 paid in 2004 Total average gross amount per beneficiary: €553 2003 profit-shares Special Employee Profit-Sharing Reserve, net: €10,219,875 paid in 2004 Number of beneficiaries(5): 30,586 Average net amount per beneficiary: €334.14

HEALTH AND SAFETY CONDITIONS Number of CHSCT(6) meetings 534 ACCOR’S PEOPLE, IN FRANCE Healthy and safety training 2,227 employees attended a health and safety training course at Accor Academy, including 363 who attended a seminar on movements and posture

Workplace safety training 5,881 people attended onsite training courses

EMPLOYEE RELATIONS Collective agreements 48 agreements were signed between June1, 2003 and June1, 2004

EMPLOYEE BENEFITS Solidarity Fund In 1994, a Solidarity Fund was set up in France to provide administrative or financial assistance to employees faced with major financial or family-related difficulties

that they cannot overcome alone. DEVELOPMENT SUSTAINABLE Works Council benefits budget €1,286,291 q (1) All employees in service at December 31, 2004, irrespective of the type of employment contract. (4) Number of foreign employees working in France. (2) Total monthly number of employees (all employees on the payroll on the last day of the month (5) Among employees who worked at least three months in the year. concerned), divided by 12 months. (6) Health, Safety and Working Conditions Committee. (3) Number of days of employee absences divided by the theoretical number of days worked.

DEFINITION OF SCOPE FOR ACCOR IN FRANCE Full-scope data cover all companies in the Group, irrespective of how many • Total headcount, in the case of subsidiaries and entities managed by people they employ. This scope encompasses: Accor under contract. • Full and part-time employees with permanent contracts or fixed-term con- • Half of total headcount in the case of 50%-owned subsidiaries. tracts exceeding three months, as well as employees hired under vocational • These proportions have also been used for the other indicators provided training programs. in the table below.

EMPLOYMENT Total number of employees at December 31, 2004(1) 28,540

COMPENSATION Total gross payroll €676,914,500 Payroll taxes €288,493,773

TRAINING Training expenditure as a percentage of total payroll 1.9% Average training days per employee 2.3 days

(1) All employees in service at December 31, 2004, irrespective of the type of employment contract.

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Accor’s people, around the world

Accor employed 168,619 people around the world as of December 31, 2004, compared with 158,023 the previous year and 157,412 at December 31, 2002.

These figures include: • Full and part-time employees with permanent contracts or fixed-term • Half of total headcount in the case of 50%-owned subsidiaries. contracts exceeding three months, as well as employees hired under • These proportions have also been used for the other indicators provided vocational training programs. in the table below. • Total headcount, in the case of subsidiaries and entities managed by Accor under contract.

Total Employees of managed France Europe North South Others Total Total 2004 businesses at December 31, 2004 (excl. France) America America and countries 2003 2002 the Caribbean Hotels 19,823 27,833 20,496 9,392 43,373 120,917 112,095 112,426 Upscale and midscale 14,694 22,610 4,021 8,184 40,882 90,391 84,391 84,282 Economy 5,129 5,223 1,208 2,491 14,051 12,895 11,048 Economy US 16,475 16,475 14,809 17,096 Services 529 1,083 97 1,997 251 3,957 4,039 3,658 Other Travel agencies 1,354 2,919 1,833 395 374 6,875 7,047 7,504 Casinos 1,968 411 2,379 2,287 2,126 Restaurants 1,060 5,266 18,406 24,732 22,468 21,234 Onboard train services 2,377 2,476 4,853 5,330 5,610 Other 1,429 255 32 3,112 78 4,906 4,757 4,854 TOTAL 28,540 40,243 22,458 33,302 44,076 168,619 158,023 157,412

Human resources indicators France Europe North South Others Total by region at December 31, 2004 (excl. France) America America and countries 2004 the Caribbean NUMBER OF EMPLOYEES 28,540 40,243 22,458 33,302 44,076 168,619 Workforce % women 53% 57% 71% 51% 35% 51% % men 47% 43% 29% 49% 65% 49% o/w employees on permanent contracts 91% 83% 94% 93% 84% 88% Management Total % of management positions* 23% 9% 9% 8% 12% 12% positions o/w held by women 42% 42% 53% 62% 32% 43% o/w held by men 58% 58% 47% 38% 68% 57% Training Training expenditure as a % of total payroll 1.9% 2.0% 1.5% 4.8% 1.9% 2.0% Number of training days 64,414 62,300 34,424 69,343 89,648 320,129 Average training days per employee 2.3 1.5 1.5 2.1 2.0 1.9 Number of employees having attended at least one training course 122,682 Workplace accidents Incidence rate of workplace accidents** 17.6 Number of fatal workplace accidents 0 0 0 1 55*** 56 Number of fatal accidents commuting to/from work 1 1 0 0 3 5

*Management position: a position held by an employee who is in charge of a team and/or who has a high level of expertise. **Incidence rate: number of workplace accidents with lost time (as defined in accordance with local legislation) per million hours worked. ***1 workplace accident and 54 employees who died or were reported missing after the Asian tsunami, as of March 15, 2005.

WWW.ACCOR.COM 124 CORPORATE DIRECTORY

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Aubert Ludovic, Bernager Elie, Bertrand Marc, Biletta Joël, Burlot Jack, Cateloy Fabrice, Charaffi Fabian, Damase Joël, Denize Alain, Detalle Serge, Elibrik Moussa, Gucia Jacques Yves, Guichard Jean, Hill Hans, Kraus Stéfan, Le Tourneur Cyril, Lebar Jacques, Lefranc David, Peix Olivier, Quaegebeur Fabrice, Rambert Fabrice, Rastoin Pierre-Emmanuel, Raverdy Jeanne, Reichel Jean-Noël, Selvais Luc, Tordjeman Gilles, Veldman Annemiek, Wang Philippe, DR, Getty Images / Digital Vision / Photodisc / Rubberball Productions / Steven Peters - Graphic Obsession / Iconotec / CAV-SNCF. Executive portraits: Grégoire Korganow / Agence Rapho.