ACCOR FUELS CHINA EXPANSION WITH ESTABLISHMENT OF JV WITH ZENITH HOTELS' MANAGEMENT COMPANY

Accor, the world's largest hotel and tourism company, is to become a joint-partner in Zenith (formerly KYZ) Hotels International, one of China's most experienced and successful hotel management companies, following the announcement today of a joint-venture agreement between the two companies.

Zenith currently operates nine hotels (3448 rooms), including eight in China, and has a further four hotels (1318 rooms) under development.

All Zenith's hotels are of 4 or 5-star standard and are located in China's key centres, including Beijing, Hangzhou and Shenzhen. Zenith also operates a hotel in Bangkok, and as part of its expansion programme, will add three new hotels in China (Chongqing, Guangzhou and Hefei).

KYZ was formed in 1991 by former Holiday Inn executives Rudi Koppen, Ernst Zimmermann, Francis Yan and See Foon Chan-Koppen. All had over 15 years experience with Holiday Inn and were instrumental in the group's rapid expansion in China. Development of key relationships with the public and private sector in China was the foundation for the group's success in the country, and the company worked closely with their Chinese partners to bring to fruition new projects in both well-established and emerging destinations.

Accor has also enjoyed considerable success in expanding its presence in China, with a current portfolio of nine Sofitel and Novotel hotels in major cities such as Beijing and Shanghai, as well as in some of the fastest growing regional centres such as Jinan and Zhengzhou.

Commenting on the agreement, Accor's Jochen Dobel, Deputy Chairman Asia Pacific, said that the deal was a result of the two companies' natural synergies and the opportunities presented by the co-operation agreement.

"Zenith's executive team contains some of the most experienced 'China hands' in the business," said Dobel. "As most companies find, getting established in China requires considerable expertise, and that only comes with experience and the building of strong relationships with local partners. The team at Zenith has pioneered the development of the international hotel sector in China, and we believe that our two companies will add value combining Zenith's China expertise with Accor's global and Asia experience, enabling us to extend our network at an even faster rate.

"Accor believes China has enormous growth potential in its tourism and hospitality sector. The country's economy continues to flourish, attracting increasing levels of corporate travel, and tourism is also growing rapidly, attracting significant increases from Asia, Europe and Australia - all destinations where Accor has a major presence.

Ernst Zimmermann, Chief Executive Officer of Zenith Hotels, welcomed the partnership with Accor: "Zenith sees the partnership with Accor as taking our involvement in China and Asia to the next level. The hotel sector is increasingly global in its operation and outlook, and Accor - as a global leader in hotels and tourism - will add this dimension to the partnership.

Possibilities for further co-operation between Accor and Zenith hotels will be evaluated within the coming three months.

"It will enable both parties to take advantage of our combined experience and skills, while offering new potential owners access to the most dynamic partnership in China."

"China is a fast changing market and it is essential for international operators to maintain close relationships with local partners. In many cases, we have worked with owners and developers for some twenty years, building trust and close understanding, and with Accor now on board, we believe we can add additional local partners to further develop the group's network."