Accor boosts expected full-year RevPAR growth to 20%

Accor posted strong 3Q23 earnings on Thursday as well as a bullish outlook for the remainder of the year, anticipating full-year RevPAR growth to exceed 20%. Consolidated EBITDA is now expected between €955 million and €985 million (previously between €930 million and €970 million).

The Paris-based giant recorded third-quarter revenue of €1.286 billion, up 13% year over year. This growth breaks down into a 13% increase for the Premium, Midscale and Economy Division and 17% for the Luxury & Lifestyle Division. RevPAR was up 15% compared with 3Q22 when RevPAR was up 14% compared with 3Q19.

On October 10, following its return to a S&P Investment Grade rating and the successful refinancing of the January 2019 hybrid bond, Accor launched a €400 million share buyback program, consistent with the commitment it made to return €3 billion to shareholders over the 2023-27 period.

“The Group’s strong performance during the quarter illustrates once again the strength of business momentum in all of our markets, notably in Asia,” said Accor Chairman and CEO Sébastien Bazin. “For Accor, this is the sixth consecutive quarter of growth since the return to post-pandemic business levels. These positive trends and our strict financial and operational discipline enable us, once again, to raise our RevPAR and EBITDA guidance for the year.”

The underlying dynamics observed in previous quarters remained constant, with average price still high and a marked improvement in the occupancy rate which slightly lags the level of 2019.

All regions and segments contributed through solid operating performances, even if the first signs of normalization of activity growth are materializing after several quarters of intense recovery.

In third-quarter 2023, Accor opened 73 hotels, for around 9,200 rooms, and has thus achieved net unit growth of 3% over the last 12 months. At end-September 2023, the group had a hotel portfolio of 812,425 rooms (5,537 hotels) and a pipeline of around 219,000 rooms (1,273 hotels).

For 2023, the Group is confirming its forecast of net unit growth in the network between 2% and 3%.

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 €85 million.

Currency effects had a negative impact of €98 million, stemming mainly from the Australian Dollar (-11%), the US dollar (-7%) and the Turkish Lira (-38%).

Premium, Midscale and Economy, which includes fees from Management & Franchise, Services to Owners and Hotel Assets and Other activities of the group's Premium, Midscale and Economy brands, generated a revenue of €767 million, up 13% YOY. Management & Franchise revenue stood at €225 million, up 17% YOY.

Luxury & Lifestyle, which includes fees from Management & Franchise, Services to Owners and Hotel Assets & Other activities of the group's Luxury & Lifestyle brands, generated revenue of €539 million, up 17% YOY. Management & Franchise (M&F) revenue stood at €108 million, up 11% YOY and driven by RevPAR growth.

Management & Franchise (M&F) revenue stood at €334 million, up 15% YOY. This reflects the growth in RevPAR in the different Accor regions and segments that reached +15% compared with Q3 2022.

The Premium, Midscale and Economy division reported RevPAR up 15% compared with Q3 2022, two-thirds driven by prices.

The Europe North Africa (ENA) region posted RevPAR up 9% relative to Q3 2022. The Middle East Africa Asia-Pacific (MEA APAC) region reported a 25% increase in RevPAR compared with Q3 2022, benefiting from a considerable rebound in activity in Asia. The Americas region, which mainly reflects the performances of Brazil (63% of room revenue for the region), began a stabilization phase. Indeed, Brazil exceeded its pre-crisis occupancy rate since the second quarter of 2022 and growth is now driven by prices.

The Luxury & Lifestyle division reported a 14% increase in RevPAR compared with Q3 2022, also two-thirds driven by prices.