Accor posted a strong performance in Q3 2023, with robust hotel demand driving RevPAR, which increased 15% compared to the same period in 2022.
The underlying dynamics seen in the earlier quarters remained unchanged, with average price still high and a considerable improvement in occupancy levels, which is marginally behind its pre-pandemic comparable, the company said in a statement.
In Q3, Accor opened 73 hotels totaling 9,200 rooms, achieving net unit growth of 3% in the last 12 months. By the end of September, the group’s portfolio stood at 5,537 hotels totaling 812,425 rooms and a pipeline of 1,273 hotels totaling 219,000 rooms.
For 2023, the company confirmed its forecast of net growth to range between 2-3%.
This is the sixth consecutive quarter of growth since returning to post-pandemic business levels, Accor’s Chairman and CEO Sébastien Bazin said.
“The group’s strong performance during the quarter illustrates once again the strength of business momentum in all of our markets, notably in Asia, and for the brands in our two segments: premium, midscale and economy, on the one hand, and luxury and lifestyle on the other. These positive trends and our strict financial and operational discipline enable us, once again, to raise our RevPAR and EBITDA guidance for the year,” he said.
REVENUE
Accor’s Q3 revenue increased 13% like-for-like (LFL) to €1,286 million ($1,356.45 million) from Q3 2022. This represents a 13% increase in the premium, midscale and economy division and 17% for the luxury & lifestyle division.
Changes in the scope of consolidation, mostly due to the consolidation of Paris Society in the luxury & lifestyle division, contributed positively by €85 million ($89.65 million).
Revenue generated by the premium, midscale and economy division increased 13% LFL to €767 million ($809 million) compared to the corresponding period in 2022. The increase aligns with the recovery in activity during the period.
The luxury & lifestyle division generated revenue of €539 million ($568.52 million), increasing 17% LFL from Q3 2022.
Management and franchise revenue were up 15% LFL to €334 million ($352.29 million), reflecting RevPAR growth in the three group regions and segments, which reached +15% relative to Q3 2022.
RevPAR of the premium, midscale and economy division increased by 15% compared to Q3 2022, mostly driven by prices.
The Europe North Africa region’s RevPAR increased by 9% from Q3 2022.
- In France, which represents 44% of the region’s room revenue, businesses benefitted from the rise in international leisure tourists to Paris. This offset weaker domestic tourist levels. The rest of the country in September was boosted by the Rugby World Cup, especially in the cities where hotel supply was limited (such as Nantes and Lille).
- RevPAR trends in the U.K. (which represents 13% of the region’s room revenue) can be compared with France due to the influx of international tourists, which benefitted London mainly.
- Germany’s RevPAR posted moderate growth compared to France and the U.K., accounting for 13% of the region’s room revenue. Germany remains mainly dependent on events, like shows, trade fairs and conventions, which are yet to return to their pre-pandemic levels.
The Middle East, Africa, and Asia Pacific region saw RevPAR rise by 25% from Q3 2022, led by a significant rebound in activity in Asia.
- Representing 22% of the region’s room revenue, the Middle East saw steady price growth. Occupancy levels improved marginally and have now returned to their pre-COVID levels. The two major religious pilgrimages in Ramadan (in early Q2) and the Hajj (end of Q2) mainly led activity in the first half of the year and helped in normalized RevPAR growth in the third quarter.
- The Pacific (representing 27% of the region’s room revenue) saw moderate growth in domestic customer figures but benefitted from a recovery in international business customers from Asian countries.
- Accounting for 28% of the region’s room revenue, Southeast Asia posted strong growth in RevPAR, particularly in Singapore. The return of international business customers to the country helped increase prices.
- Recovery continued in China, which accounts for 23% of room revenue, with RevPAR now slightly above pre-pandemic levels.
The Americas region, which primarily reflects the performances of Brazil (63% of the region’s room revenue), began to see a phase of stabilization. Brazil surpassed its 2019 occupancy rate from Q2 2022, with prices now driving growth.
RevPAR of the luxury & lifestyle division increased 14% from Q3 2022, also two-thirds led by prices.
- Representing 77% of the division’s room revenue, luxury reported a 15% rise in RevPAR from Q3 2022, led by prices and volumes. While still increasing, prices are approaching a stabilization phase, particularly among the Fairmont hotels in North America.
- RevPAR of the lifestyle segment improved by 12%. The segment benefitted from faster recovery than premium, midscale and economy segments after the pandemic. The base effect (compared to 2022) is, therefore, less favorable.
OUTLOOK
Accor raised its guidance for the fiscal year 2023. RevPAR growth is now expected to marginally exceed 20% (earlier at the top end of the 15-20% range).
Consolidated EBITDA is expected to range between €955 million ($1.007.31 million) and €985 million ($1,038.96 million), up from the previous €930 million ($980.94 million) and €970 million ($1,023.14 million).
PURCHASING ACTIVITY
Accor became the sole shareholder of Potel & Chabot after acquiring a 63% stake, besides the 37% it already owned. Potel & Chabot will be integrated within Accor’s luxury & lifestyle division.
Earlier this month, Accor completed the January 2019 hybrid bond refinancing transaction.