Accor has raised its full-year guidance, fueled by strong activity growth in the first half of the year and considering the prevailing macroeconomic uncertainties.
The French hospitality giant now expects the RevPAR growth at the top end of the 15-20% range, while consolidated EBITDA is projected to range between €930 million ($1,029 million) and €970 million ($1,073.5 million). The group has previously estimated its consolidated EBITDA to range between €920 ($1,018 million) million and €960 million ($1,062.43 million).
The company reported solid business trends in Q2 2023 in its two divisions, while hotel demand from both leisure and business sectors remained steady. This was reflected in the improvement in occupancy numbers and a continued rise in room rates.
In the first half of the year, Accor opened 114 hotels totaling 14,500 rooms, accounting for a net unit growth of 3.5% in the past 12 months. By the end of June, the company’s total portfolio stood at 5,487 hotels totaling 805,436 rooms, with a pipeline of 1,262 hotels totaling 217,000 rooms.
Accor confirmed its forecast of net growth of the network between 2-3% in 2023.
“Half-year activity growth was very strong across all of our brands and markets. These good performances are underpinned by the rigorous execution of our strategy, the attractiveness of our brands and the commitment of our teams. This momentum should continue for the coming months, driven by robust demand in both leisure and business tourism,” said Sebastien Bazin, chairman and CEO of Accor.
REVENUE
Accor’s H1 2023 revenue stood at €2,402 million, up 35% like-for-like (LFL) compared to H1 2022. This represents a 34% increase for the Premium, Midscale and Economy division and 40% for the Luxury & Lifestyle division.
This segment includes fees from management and franchise services to owners and hotel assets and other activities of Accor’s brands under this division. The division generated revenue worth €1,418 million (%1,569.3 million), up 34% LFL from H1 2022. The rise was in line with the recovery in business over the period.
The Luxury & Lifestyle division generated revenue of €1,020 million ($1,128.83 million), rising 40% LFL versus H1 2022. This increase also reflected the surge in business over the period.
REVPAR
Consolidated RevPAR continued to rise in H1 2023, increasing 25% in Q2 against Q2 2022 (and +27% vs Q2 2019).
RevPAR of the Premium, Midscale and Economy division surged 26% from Q2 2022, still largely boosted by prices rather than the rise in occupancy rates.
- The Europe and North Africa region recorded RevPAR up 20% compared to Q2 2022.
- RevPAR in France, which represents 45% of the region’s room revenue, held steady. This was underpinned particularly by the influx of international leisure and business travelers to Paris for multiple major events. Social unrest at the end of June did not have any major impact on the quarter or summer bookings.
- The Middle East Asia Pacific region saw RevPAR rise by 37% relative to Q2 2022, driven by a significant rebound in business in Asia. The Middle East region, which accounts for 27% of the region’s room revenue, sustained its solid performance despite the end of last year’s outstanding events. The holy cities in Saudi Arabia majorly benefited from pilgrimages during Ramadan (at the beginning of the second quarter) and Hajj (end of the second quarter).
- Representing 25% of revenue in the region, Pacific saw stable revenue relative to the previous quarters.
- South East Asia, accounting for 27% of the region’s revenue, restored to its pre-crisis figures, particularly in the big cities, boosted by the return of international business clients.
- China, which represents 21% of the region’s revenue, posted a strong recovery since the beginning of the year. However, business in this market is yet to return to its pre-crisis levels.
- The Americas region, mainly reflecting the impressive performance of Brazil (63% of room revenue for the region), sustained a good level of business fueled only by prices since the region had already returned to its pre-pandemic occupancy level.
The Luxury & Lifestyle division posted a 24% rise in RevPAR relative to Q2 2022, bolstered by higher occupancy rates and prices.
- Luxury accounts for 77% of the division’s revenue and registered a 25% rise in RevPAR against Q2 2022. This was mainly driven by the MEASPAC region, which saw strong growth.
- RevPAR in Lifestyle jumped 20% compared to Q2 2022, reflecting a less favorable base effect as this segment staged the most significant recovery by the end of the crisis.
EBITDA
Consolidated EBITDA more than doubled from H1 2022 to stand at €447 million ($494.7 million) in H1 2023. This can be attributed to the robust recovery in activity and strict discipline in costs of services to owners, allowing Accor to post a slightly positive EBITDA as expected for this activity.
NET PROFIT
Net profit, group share stood at €248 million ($274.46 million) in H1 2023, against €32 million ($35.41 million) in H1 2022.
The improved share of net profit of equity-accounted investments, positive at €9 million ($9.96 million) compared to a negative €27 million ($29.88 million) in H1 2022, was primarily boosted by the recovery at AccorInvest, which saw a rebound in business, especially in Europe.
INVESTMENTS FOR RENOVATIONS
Meanwhile, Accor Pacific announced that its partners have invested over $300 million in renovations and refurbishments of its properties since the beginning of 2022. The hotels, which were renovated, are located across the Pacific region in countries like Australia, New Zealand, Fiji and French Polynesia. The investment aims to improve the guest experience and upgrade hotel amenities.
The renovations and refurbishments align with Accor’s sustainability goals. The company incorporated eco-friendly practices and technologies throughout the process.
Among the noted projects completed was the refurbishment of Manly Pacific – MGallery in Manly, Sydney. The enhanced property now features updated facilities, modernized rooms and improved amenities.
The luxury boutique Playford – MGallery in Adelaide received a $25 million complete makeover which saw upgrades to its rooms, function spaces, reception and a new standalone restaurant and bar.