AC Accor

PARIS—AccorHotels SA Thursday said it continues to suffer from the fallout of November's terrorist attacks in Paris even as the French hotels group reported a rise in earnings that reflects recent turnaround efforts and improved revenue in other key regions.

Europe's largest hotel operator, which makes around 30% of its sales in France, reported a sharp 6.6% drop in fourth-quarter sales in France due to the Nov. 13 terror attacks, leading to a 0.5% drop for the year. That came despite tens of thousands of delegates coming to Paris for an environmental conference in December, the company said.

"We're set for a better January but it remains a gradual improvement," Chief Financial Officer Jean-Jacques Morin said on a call with reporters.

Mr. Morin said the company's sales in Paris plunged 14% in November and 17% in December as tourists canceled reservations and conferences were rescheduled or downsized. In France more widely, Mr. Morin said sales dropped 4% in November and 7% in December.

"The effect was greatest on the luxury sector," Mr. Morin said. "People decided not to come to Paris but to go to other capital cities."

The Paris terrorist attacks dealt a blow to France's tourist industry and slowed its economy. Sales at Paris hotels dropped by half in the week after Nov. 13 as tourists canceled bookings for the Christmas period and beyond. Although new bookings are returning to normal, companies like AccorHotels are still suffering from the spate of cancellations immediately after the attacks, analysts say.

Mr. Morin added that the first quarter this year would also impacted but that reservations were "good or even very good" after that, notably due to the European soccer championships in France starting in June.

Still, the company said Thursday its turnaround efforts paid dividends in 2015 as it reported a 9.4% jump in net profit to 244 million euros ($271.6 million), up from €223 million the year before.

The owner of the Ibis and Sofitel chains is in the midst of a turnaround plan led by Chief Executive Sebastien Bazin, a private equity specialist. Mr. Bazin has expanded the group's business in China, increased its exposure to the luxury sector and pursued acquisitions to ramp up its digital know-how.

Accor in December agreed to acquire the owner of the Fairmont, Raffles and Swissotel hotel in a deal that values the Toronto-based company, FRHI Holdings Ltd., at about $3 billion, increasing its exposure to the U.S. and the upmarket sector.

Full-year earnings before interest and taxes rose 11% to €665 million as an increase in sales in most of the group's key regions outweighed falling revenue in France and Brazil. Full-year sales rose 2.3% to €5.58 billion, slightly missing analysts' expectations of €5.65 billion.

Accor declined to provide any specific financial goals for 2016.

Write to Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

February 18, 2016 04:45 ET (09:45 GMT)

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