Business trends in Q2 2023 were solid in the Accor Group‘s two divisions. Hotel demand from both leisure and business guests remained buoyant. This was shown by the improvement in occupancy rates and a sustained increase in average room rates.
These results enable the Group to raise its full-year EBITDA guidance presented at the Capital Markets Day on June 27th, 2023.
During first-half 2023, Accor opened 114 hotels, representing 14,500 rooms, i.e. net unit growth of 3.5% in the last 12 months. At end-June 2023, the Group had a hotel portfolio of 805,436 rooms (5,487 hotels) and a pipeline of 217,000 rooms (1,262 hotels).
For 2023, the Group is confirming its forecast of net unit growth of the network between 2% and 3%.
Sébastien Bazin, Chairman and Chief Executive Officer of Accor, said: “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. The performance enables us to raise our 2023 guidance and to continue investing in our brands, talents and digital tools”.
The Group reported H1 2023 revenue of 2,402 million euros, up 35% like-for-like (LFL) versus H1 2022. This growth breaks down into a 34% increase for the Premium, Midscale and Economy division and 40% for the Luxury & Lifestyle division. Changes in the scope of consolidation, mainly due to the consolidation of Paris Society in the Luxury & Lifestyle division (Hotel Assets & Other segment), contributed positively by 139 million euros.
Currency effects had a negative impact of 61 million euros, stemming mainly from the Australian Dollar (+5%), the Egyptian Pound (+75%) and the Turkish Lira (+32%).
Premium, Midscale and Economy revenue
Premium, Midscale and Economy, which includes fees from Management & Franchise (M&F), Services to Owners and Hotel Assets & Other activities of the Group’s Premium, Midscale and Economy brands, generated revenue of 1,418 million euros, up 34% LFL versus H1 2022. This increase was in line with the recovery in business over the period.
Management & Franchise (M&F) revenue stood at 403 million euros, up 39% LFL versus H1 2022 and in line with the increase in RevPAR over the period (+39%). The regional performance of Management & Franchise is detailed in the following pages.
Services to Owners revenue, which includes the activities of Sales, Marketing, Distribution and Loyalty, as well as shared services and the reimbursement of hotel staff costs, reached to €521 million in H1 2023, up 41% LFL year on year.
Hotel Assets & Other revenue was up 24% LFL relative to H1 2022. This segment is closely tied to Australia, which recovered faster than the rest of the Group, impacting the year-on-year growth.
Luxury & Lifestyle revenue
Luxury & Lifestyle, which includes fees from Management & Franchise (M&F), Services to Owners and Hotel Assets & Other activities of the Group’s Luxury & Lifestyle brands, generated revenue of 1,020 million euros, up 40% LFL versus H1 2022. This increase also reflected the surge in business over the period.
Management & Franchise (M&F) revenue stood at 210 million euros, up 58% LFL versus H1 2022, driven by the increase in RevPAR and a sharp acceleration in hotel incentive fees under management contracts. The segment performance of Management & Franchise is detailed in the following pages.
Services to Owners revenue which includes the Sales, Marketing, Distribution and Loyalty division, as well as shared services and the reimbursement of hotel staff costs, came to 655 million euros in H1 2023, up 36% LFL year on year.
Hotel Assets & Other revenue was up 20% LFL relative to H1 2022. It included a significant scope effect following the consolidation of Paris Society at end-2022.
Management & Franchise (M&F) revenue stood at €613 million, up 45% LFL versus H1 2022. This reflected the increase in RevPAR in the Group’s various regions and segments (+38% vs H1 2022) which was accelerated by the surge in incentive fees.
Consolidated RevPAR continued its sequential rise in H1 2023, up 25% in Q2 compared with Q2 2022 (and +27% vs Q2 2019).
The Premium, Midscale and Economy division grew its RevPAR by 26% versus Q2 2022, still mostly driven by prices rather than the rise in occupancy rates.
- The Europe North Africa (ENA) region posted RevPAR up 20% relative to Q2 2022.
– In France, which accounts for 45% of the region’s room revenue, RevPAR remained solid, underpinned in particular by the influx of international leisure and business guests to Paris for major events such as the Paris Air Show, Viva Tech and the French Open tennis tournament at Roland-Garros. Social unrest at end-June had no significant impact on the quarter or on summer bookings.
– The United Kingdom, which represents 12% of the region’s room revenue, posted balanced growth in RevPAR between London and other cities.
– In Germany, which accounts for 13% of the region’s room revenue, RevPAR improved significantly in the second quarter, but nevertheless continued to lag behind the rest of Europe.
- The Middle East Asia-Pacific region reported a 37% increase in RevPAR compared with Q2 2022, benefiting from a considerable rebound in business in Asia.
– Accounting for 27% of the region’s room revenue, the Middle East continued to post solid performances despite the end of last year’s exceptional events (Expo 2020 in Dubai and the Soccer World Cup in Qatar). The holy cities in Saudi Arabia notably benefited from religious pilgrimages for Ramadan (beginning of the second quarter) and the Hajj (end of the second quarter).
– The Pacific, which accounts for 25% of room revenue for the region, maintained stable revenue compared with previous quarters.
– South-East Asia, which accounts for 27% of the region’s room revenue, restored pre-crisis levels, especially in major cities, bolstered by the return of international business clients.
– In China, which represents 21% of room revenue for the region, while a strong recovery has been noticeable since the start of the year, there is still room for considerable growth, as business has not yet returned to pre-crisis levels.
- The Americas region, which mainly reflects the performances of Brazil (63% of room revenue for the region), maintained a solid level of business driven solely by prices, since the region had already returned to its 2019 occupancy rate. The Luxury & Lifestyle division reported a 24% increase in RevPAR compared with Q2 2022, driven by both higher occupancy rates and prices.
- Luxury, which accounts for 77% of the division’s room revenue, posted a 25% increase in RevPAR compared with second-quarter 2022. This increase was particularly driven by the MEASPAC region where growth was very robust.
- Lifestyle RevPAR increased 20% compared with Q2 2022. This performance reflected a less favorable base effect as it was the segment to stage the most substantial recovery at the end of the crisis.
The article Accor reports H1 2023 results: Solid activity growth first appeared in TravelDailyNews International.
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Author: Theodore Koumelis