Three new Sofitels announced as China leads Asian and global tourism growth

China�s position as the most dynamic force in modern-day tourism has been further enhanced with the announcement of three new Sofitel hotels for the Accor network.

The three new hotels are to be located in Hangzhou, Haikou and Liyang. Two of the hotels are scheduled to open by the end of 2005, which will extend the number of Sofitel hotels opening in China this year to eight.

The expansion of Accor�s 5-star hotel brand is part of a dramatic development that will see Accor�s hotel network double in size from the current 24 hotels to 50 hotels by the end of 2007, including over 20 Sofitel hotels and resorts.

The three hotels are: Sofitel Xanadu Resort Hangzhou � opening at the end of 2005, the resort-style hotel is set on 120 acres of land that will include the 305 room hotel as well as 140 villas, conference centre, restaurants and leisure facilities. The hotel will target conference and leisure business, as well as corporate travellers visiting the nearby commercial areas. The hotel is being developed by the Zhejiang Wanda Group. Sofitel Fizi Haikou � an eight storey beachfront hotel that is scheduled to open by the end of 2005. The 308 room hotel is located on the rapidly developing western coastline of Haikou and will offer three restaurants, extensive meeting and function facilities and swimming pool. A health centre and spa will be added in phase two of the development. The resort will reinforce Sofitel�s presence in the Hainan market, complementing the Sofitel Boao. The hotel is being developed by the FIZI Group, a well-known residential and commercial property developer. Sofitel Fizi Tianmu Lake � the hotel is being built on the shoreline of Tianmu Lake in Liyang City in Jiangsu Province. Designed by renowned, New York-based architects and interior designers BBG-BBGM, the 400 room lakefront hotel is expected to be completed by December 2006. The Sofitel will make the most of its picturesque location with a private jetty and a special deck to take advantage of the lake views and a private jetty. The hotel will have three restaurants, swimming pool, fitness centre, ballroom and meeting facilities and � in the future � its own heliport. The Sofitel is being developed by the FIZI Group. Opening next month is the Sofitel Xian, part of a three-hotel complex in Renmin Square in the heart of Xian. The Sofitel is offering the city�s finest deluxe accommodation and raises the city�s ability to host major international and domestic groups.

Later this year Sofitel hotels will open in Xiamen, Suzhou, Shi Jia Zhuang and two in Nanjing.

Announcing the new hotel signings, Managing Director of Accor Asia Pacific, Michael Issenberg, said that in addition to the Sofitel openings there would also be new Novotel, Mercure and Ibis hotels opening across China this year.

�There is unprecedented momentum occurring with China�s tourism, and while there is an aggressive and substantial building programme currently taking place, demand from both local and international travellers continues to grow rapidly,� said Mr Issenberg.

�This year occupancies across our China network are running at 74%, with our hotels in Beijing performing at over 90%. Our hotels in Hong Kong are also achieving 90% occupancies. Encouragingly � from an operators� and owners� point of view, we have also been able to raise our rates, though this only just partially compensates for the losses that were sustained during the SARS period.�

Mr Issenberg said that he was confident of announcing a new hotel for Hong Kong as well in the near future. Accor currently operates four hotels in Hong Kong.

Mr Issenberg said that the growth in travel in China and Hong Kong was being fuelled by the strong economy, the increase in the number of Approved Destination Status countries, and the growth in airline services, especially low-lost air carriers.

�By the end of the decade, China will boast the world�s largest and most influential domestic, inbound and outbound markets,� he said.

�Hong Kong will continue to grow in importance as a key gateway city, but so will airports such as the new Baiyun Airport in Guangzhou, where Accor will operate a new Novotel hotel.

�We are expanding our presence in the region across all brands, from our 5-star Sofitels to our 3-star Ibis hotels. Last year we added an extra wing to the Ibis North Point in Hong Kong and later this year the second Ibis in China will open in Chengdu, following the great success of Ibis Tianjin.

�The growth of Ibis reflects the vast increases in domestic and regional travel in China. We have used the Ibis Tianjin as a testing ground for the product and it has performed even more successfully than we anticipated. There is no international hotel brand in China aimed at this sector and with domestic travel scheduled to grow five-fold by 2010, there is a clear market need for quality, internationally branded accommodation in major cities, new economic zones, transport hubs and regional centres.

�Accor will also introduce its Mercure brand to China later in the year, and the benefit of having our four main hotel brands � Sofitel, Novotel, Mercure and Ibis � present in the China market is that it will make these brands familiar for Chinese travellers visiting abroad.

�With Chinese outbound travel expected to double from its current 25 million to 50 million by 2008, we are working closely with our partners to ensure that we cater for the new travellers in popular destinations such as Europe, Australia, Hong Kong and a number of Asian countries. Already we lead the way with hotels offering additional facilities and services for Chinese travellers, and we will continue to expand that policy.�

Mr Issenberg also welcomed the new Chief Executive Officer of Accor�s China operations, Mr Brian Deeson. Mr Deeson succeeds Mr Reggie Shiu, who was a casualty in the tsunami-disaster of last December. Mr Deeson is one of Asia�s most experienced and successful hotel executives. He developed the Century hotel brand in Hong Kong and China before it became integrated in the Accor group in 2002, and has been Accor�s senior executive in charge of development since then.

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Accor is the worldwide leader in hotels, tourism and corporate services, employing 168,000 people in 140 countries, with two major international activities: - hotels: 4,000 hotels (463,000 rooms) in 90 countries (including over 230 hotels and resorts in Asia-Pacific under the brands Sofitel, Novotel, Mercure, All Seasons, Ibis and Formule 1) as well as backpacking hostels, travel agencies, restaurants and casinos; - services to corporate clients and public institutions: 19 million people in 34 countries use a broad range of services (food vouchers, people care and services, incentive, loyalty programs, events) engineered and managed by Accor.

For further information, please contact: Impact Asia Limited Jessica Chong Account Manager Tel: (852) 2521 1498 Fax: (852) 2804 6786 Email: jessica@impactasia.com