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B&B    | http://www.hotelbb.com
France - Investment : € 35 million - 74.1%

B&B
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M. Georges Sampeur | Chairman of the Executive Board of B&B Hotels Group

M. Georges Sampeur
In 2008, we continued our strategy to provide our customers with the so called “econochic” concept which involves the renovation of 78 hotels, continuing our expansion in France and abroad with the opening of seven new hotels and the creation of subsidiaries in Poland, Hungary and Italy.

The Group’s first brand-advertising campaign was a success as reflected in the significant rise in Internet traffic. The different strategies and actions have paid off at the dawn of a highly uncertain economic period and allowed us to start 2009 with the right tools to weather the storm but also to take advantage of the opportunities created by the new climate.


organigramme de détention organigramme de détention


B&B – 3rd player on the budget hotel segment

With 196 hotels in France and in Germany comprising 14,506 rooms, B&B is positioned at the top end of the budget hotel segment. Its innovative concept is driven by a quality offer at a highly attractive price, to match the demands of business and recreational travelers.

Since the Group’s creation, quality has always been important in the development of hotels: choice of construction materials, equipment, furniture, policy to offer a genuine bathroom, sufficiently spacious family suites, generous all-you-can-eat breakfast buffets, access to latest technologies (free, unlimited WiFi access), etc.

2008 operations

Good operational performance in a tough economic climate

Total revenues grew 7.8% from 150.3 million euros to 162.0 in 2008.

This increase can be explained in particular by an increase in the number of rooms sold from 4.3% and an increase in the average price of a room of 2.9%.

The level of operational return is still excellent, with operating income at more than 50% of revenues in France and more than 53% in Germany and EBITDAR (EBITDA before rents) above 40% in both countries.

Becoming a European leader in the budget hotel industry

B&B’s announced policy to become the leading European budget hotel chain was reflected in a regular stream of new hotel openings in Germany and France.

The chain continued its development in France with the opening of 4 hotels: Aulnay-sous-Bois (113 rooms), Lille- Euralille (127 rooms), Salon de Provence (83 rooms) and Valenciennes (83 rooms).

In Germany, B&B continued its expansion with the opening of three hotels: Munich (132 rooms), Frankfurt (100 rooms) and Hamburg (182 rooms). The partnership with Tank&Rast signed late 2007 should allow the opening in 2009 of a dozen additional franchisee hotels.

The first development milestones in the rest of Europe were also achieved with projects started in Torùn, Budapest, Monza, Milan and Torino as well as the launch of the first franchise hotel in Portugal.

Quality and recognition: B&B’s weapons to weather the harsh economic storm

Beyond the on-going three-year renovation program, a large part of the old Villages Hôtel network was specifically renovated to harmonize it with the concept on the French network. In Germany, all the hotels have now been renovated.

These investments were combined with a large-scale brand-marketing campaign, specifically through the sponsoring of Prime Time shows, weather reports before the 8 p.m. news as well as very powerful Internet presence (partnership, banners, etc.). The jersey partnership with the Lorient League 1 football club also helped to further entrench the recognition of B&B brand in the collective mind.

Raising the public visibility and the quality of B&B helped to significantly boost market share and maintain the operational and financial performance despite the difficult economic context. The complete overhaul of the loyalty program in 2008, deployment of free Wi-Fi in all rooms by June 2009 and continued investments will help the brand to attract new customers and retain exiting ones.




2008 annual accounts

Consolidated income statement

(In million euros) 2007
2008
Revenues 150.3 162.0
EBITDA before rents
 60.9 63.9
EBITDA margin before rents 40.5% 39.4%


Consolidated balance sheet as at December 31, 2008

(In million euros) ASSETS LIABILITIES AND SHAREHOLDERS’ EQUITY
Goodwill 237.7    
Intangible assets 23.4 Shareholders’ equity 117.7
Plant, property and equipment 81.9 Long-term debt 202.6
Other non-current assets 4.0 Non-current liabilities 16.8
Cash and other current assets 37.2 Current liabilities 64.8
Other assets held for sale 17.7
Total 401.9 Total 401.9
Sustainable Development

In recent years, B&B has noticed an increasingly strong awareness in customers and employees to environmental protection issues. In the changing world of the budget hotel industry, B&B has decided to raise major environmental challenges that fall under its activities: air, water, waste and energy consumption.

In 2008, B&B committed to an environmental approach. Accordingly, it initiated the Green Key label procedure. Created by the Foundation for Environmental Education, the label was chosen to match B&B ’s philosophy: well-being, comfort, simplicity, modern facilities and friendliness.

10 volunteer hotels obtained the label. Each hotel answered a questionnaire with 90 criteria and especially, demonstrated genuine motivation for the approach.
Accordingly, these hotels pledged to deploy multi-year environmental policies and to strive to:
  • Reduce water consumption, by installing water saving devices in hotels or educate customers and enforce better monitoring of consumer habits;
  • Reduce energy consumption through the installation of low-energy lighting systems or the insulation of buildings and use more renewable energies;
  • Manage waste better, with for example, the introduction of selective sorting or negotiate the limited use of packaging with suppliers.

Throughout the year, significant efforts were devoted to educating and mobilizing the teams around this unifying project: training, internal marketing campaigns, bill-boarding, educating about “eco-gestures”, etc. Furthermore, the first technical tools (water saving devices, low-energy lights, etc.) were set up. There are also ongoing discussions about “responsible buying”.

This first stage confirmed the relevance of B&B Green Key label choice. The 2009/2010 objective is to obtain the label for all directly-managed hotels with salaried employees and to include all the hotels in the corporate environmental approach.


The Green Key an environmental label for tourist accommodations

Created in 1994 in Denmark at the initiative of hotel industry professionals, the Green Key is one of the five programs of the Foundation for Environmental Education (FEE). It rewards hotels, Bed & Breakfasts or camp sites, for their environmental initiatives. The Foundation has environmental (reduce the environmental footprint of each stay), economic (reduce operating expenses of accommodation structures), educational (raise awareness, train, etc.) and marketing (promoting award-winners) objectives.

The label is obtained after completing a questionnaire with 90 criteria divided into six families: environmental policy, water, energy and waste management, use of chemical products and education about the environment.

Partnership agreements are signed with the World Tourism Organization (WTO) and the United Nations Program for the Environment (UNPE).

Today, the Green Key label exists in 13 countries and 700 institutions in Europe.
b-b
2008 Revenues
€ 162 m of consolidated revenues in France and in Germany, + 7.8%
2008 EBITDAR
€64 m of EBITDA before rents*,
+ 5.0 %
 * EBITDAR
2008 Highlights
• Opening of 7 hotels in 2008 (4 in France and 3 in Germany).

• Remodeling of 78 hotels to reflect the new concept (4,925 rooms).

• Communication campaign: TV sponsorship, Internet,
Crazy weekend.
• Steady business in a tough economic climate.
Sustainable development
• Environmental initiative in order to obtain a known and recognized environmental label: The Green Key.

• 10 hotels with the Green Key label in 2008.

• Raising awarness of B&B teams throughout the year
about this new approach.

• Initiation of discussions on “responsible buying”.