CASE ILLUSTRATION #5 The effects of September 11 2001: Accor hotel group Accor is a Paris-based multi-brand network, which in 2001 had 3,600 hotels in 90 countries that were fully integrated in terms of sales and technology. Hotel development is based on well-known international brands (such as Sofitel, Novotel, Mercure, Ibis, Formule 1, as well as Motel 6 and Red Roof Inns in the United States) which cover the full range of hotel segments, from budget to luxury class. Accor properties are now well represented around the globe, particularly in America, Europe and Asia. The travel industry, faced with a slowdown that was already perceptible in spring 2001, had to cope with one of the worst crises in its history: the events of September 11th, 2001 in America. The tragic events had two consequences. The first was immediate and of an unprecedented magnitude - a psychological shock. The second was the aggravation of the global economic slowdown affecting America, Europe and Asia simultaneously. As a result of the events, some hotel investments were postponed but very few were cancelled and the group still planned 250 new hotel openings over the subsequent few years. The group was protected to some extent from the worst effects of the downturn by the diversity of its hotel portfolio both geographically and in terms of quality. However, some effects on hotel bookings were inevitable. For example, the luxury hotel industry in Paris was severely affected, whereas the economy hotel segment in Europe held up well. Thus Sofitel's bookings dropped by 33% in October and 18% in November 2001, while Formule 1 and Ibis budget brands in Europe recorded an increase of 3.5% in their October bookings and 4.6% in November. In the US, Sofitel's bookings declined by 25%30%, whereas Red Roof Inns and Motel 6 (budget brands) registered a limited drop of 8.2% in October and then 6% in November 2001. www.accor.com Questions 1. Explain how Accor was affected by the 9/11 terrorist attacks. 2. Explain the managerial responses of Accor after the attacks.