Accor Announces Formation of Accor Economy Lodging; New Lodging Division Will Focus On Ownership and Operation of High-quality Economy Lodging Brands Throughout North America

Business Wire, August 17, 1999

PARIS and DALLAS--(BUSINESS WIRE)--Aug. 17, 1999--

Capitalizing on the success of its existing economy brands, Dallas-based Motel 6 and Studio 6, as well as its latest acquisition of Columbus, OH-based Red Roof Inns, Accor S.A. today announced its formation of Accor Economy Lodging to function as a multi-branded, strategic growth division of Accor. As part of this announcement, Jean-Marc Espalioux, chairman of the management board and CEO of Accor S.A., has appointed Georges Le Mener, currently the president and chief executive officer of Motel 6, to the additional position as president and CEO of Accor Economy Lodging, which will be based in Dallas.

With the addition of Red Roof Inns to its brand portfolio, Accor Economy Lodging immediately emerges as the largest owner and operator of lodging properties in the economy sector, and as the ninth-largest U.S. hotel company overall, with 1,112 properties representing more than 122,000 rooms located throughout the 48 contiguous states. In addition, Accor Economy Lodging now comprises in aggregate more than 10% of the entire economy lodging sector. Its parent company, Paris-based Accor S.A., is currently the third-largest hospitality company in the world, with a portfolio comprised of 3,084 lodging properties representing more than 340,000 rooms.

"We have been extraordinarily pleased with the successful turnaround of the Motel 6 brand, as well as the introduction of the Studio 6 extended-stay brand, under Georges's leadership," Espalioux said. "Through our acquisition of Red Roof Inns and the formation of Accor Economy Lodging, we believe we are well-positioned -- with the highest-quality brands in the U.S. economy sector -- to enjoy continued growth while providing the best products possible for our value-minded customers. Georges's keen understanding of the industry, combined with his people-centered management philosophy, will be the springboard for this division's ongoing expansion and success."

According to Le Mener, the formation of Accor Economy Lodging underscores Accor's commitment to the continued growth of its three U.S. economy brands, and its belief in the continued growth opportunities available in the economy sector of the industry.

"For quite some time, Accor has pursued an aggressive global strategy designed to strengthen its worldwide leadership in the economy lodging sector. Completing the Red Roof acquisition and establishing Accor Economy Lodging were two extremely savvy steps toward capturing even greater market share in the U.S. economy sector. Going forward, we will focus on the aggressive growth of both the Red Roof and Motel 6 brands, which is facilitated by the financial strength that constitutes our parent company, Accor," Le Mener said.

In order to maintain brand integrity and to optimize each brand's strategic growth potential, Le Mener emphasized that Red Roof Inns and Motel 6 will continue to do business as distinct and unique operating groups. However, to realize the operational synergies already identified, certain support functions will be consolidated including franchising, development, purchasing, marketing and sales, reservations, financial functions, management information systems, construction and legal.

Le Mener said he will be joined on the AEL executive committee by: Emmett Gossen, group executive vice president responsible for corporate affairs and development; Carol Ann Kirby, group executive vice president responsible for marketing and sales; David O'Shaughnessey, group executive vice president responsible for franchising, quality and technical resources; Armand Sebban, group executive vice president and chief financial officer; and, Joe Wheeling, executive vice president and chief operating officer of Red Roof Inns.

"With a superior team of executives, combined with two high-quality, value-oriented property brands and the financial strength of Accor as our foundation, we are well-positioned to take full advantage of future growth opportunities. Today's announcement is just the beginning," he said.

About Red Roof Inns

Acquired by Accor S.A. in August 1999, Red Roof Inns is one of three proprietary brands operated by Accor Economy Lodging and is a recognized leader in the economy lodging sector. With more than 300 properties representing over 36,000 rooms throughout 38 states and the District of Columbia, Red Roof Inns offers business and leisure travelers exception value, quality and convenience. With one of the highest occupancy rates in the industry, Red Roof Inns will continue to grow through franchising, acquisitions, and new development and is poised to become a truly nationally recognized brand.

About Motel 6

Beginning in 1962 with one property in Southern California, Motel 6 now is comprised of more than 800 properties representing nearly 86,000 rooms throughout the 48 contiguous states. While providing its guests the best value for their lodging dollars, Motel 6 properties offer free local phone calls and no long distance access charges, free morning coffee, 24-hour faxing service at the front desk, free HBO and ESPN, and remote-controlled television sets. Most properties also have pools, guest laundries, electronic door locks, and phones with dataports. With both company-owned and franchised properties all across the country, Motel 6 offers the best price of any national lodging chain. Motel 6 also is operated by Accor Economy Lodging.