Accor posts record €1 billion profits for 2023

PARIS – Enjoying one more post-COVID bump, Accor set new records in operating and financial performance in 2023, reporting full-year results led by a 23% year-over-year (YOY) increase in RevPAR, a 20% increase in revenue, a 49% jump in EBITDA to reach more than €1 billion for the first time, and a 57% increase in net profit.

In 2023, Accor opened 291 hotels, corresponding to 41,000 rooms, and net network growth of 2.4%.  At the end of 2023, the group had 821,518 rooms (5,584 hotels) and a pipeline of 225,000 rooms (1,315 hotels).

Looking ahead, the Paris-based group confirmed its medium-term growth prospects with an upbeat forecast thanks to major international events and increased business travel:

• Annualized RevPAR growth of between 3% and 4% (CAGR 2023-27)
• Average annual network expansion of between 3% and 5% (CAGR 2023-27)
• Management and franchise revenue growth of between 6% and 10% (CAGR 2023-27)
• A marginally positive EBITDA contribution from services to owners
• EBITDA growth of between 9% and 12% (CAGR 2023-27)
• Recurring free cash flow conversion in excess of 55%
• A shareholder payout of around €3 billion over 2023-2027, including notably a share buy-back program of around €400 million to be launched during 2024.

Accor Chairman and CEO said on the group’s earnings call that he was wrong three years ago when he said they were probably going to premanantly lose 25% of corporate travel because of remote work. “We are already at 90% of the level of 2019,” he said, adding that the group is “blessed” for the next 12 months because of major events such as the Paris Olympics and the Euro 2024 soccer tournament.

CFO Martine Gerow added that Accor has made an encouraging start in 2024 with an increase in occupancy and rates holding up well and renewed confidence in their ability to generate and share growth. 

At the same time, Bazin also cautioned that 2024 economic growth in Europe will differ widely from country to country. In fact, France has lowered its forecast to 1% from 1.4% and Germany expects an anemic 0.2% growth in 2024.

"But you still have Spain, Greece, Italy fetching probably well above 2%... Watch out because we are going to be navigating through a lot of different waters depending on where we sit," Bazin added.

In 4Q24, the Premium, Midscale and Economy (PM&E) division grew its RevPAR by 12% YOY, still driven more by prices than the rise in occupancy rates.

The Europe North Africa region posted RevPAR up 8% with France, representing 43% of the region’s room revenue, reporting stabilized RevPAR growth. The Middle East, Africa & Asia Pacific region reported a 19% increase in RevPAR compared with 4Q22, benefiting from a considerable rebound in Asia.

The Luxury & Lifestyle (L&L) division reported an 8% increase in RevPAR compared with 4Q422, driven mainly by higher occupancy rates. The Luxury segment, which accounts for 77% of the division's room revenue, posted a 10% YOY increase in RevPAR, driven by the Asia Pacific region.

Lifestyle RevPAR was stable YOY as the more rapid recovery in this segment in 2022 led to a less favorable basis of comparison.

Accor reported revenue of €5,056 million in 2023, up 18% YOY with a 17% increase for the Premium, Midscale and Economy division and 22% for the Luxury & Lifestyle division.

Management and franchise revenue came to €1.3 billion, up 29% YOY,  reflecting RevPAR growth in the group’s different geographic regions and segments (+23% compared with 2022) and amplified by the sharp increase in incentive fees under management contracts.

Net profit, group share was €633 million in 2023, compared with €402 million in 2022. In 2023, the share of net profit of equity-accounted investments increased to €44 million, versus €33 million in 2022, primarily driven by AccorInvest, which enjoyed a rebound in business, particularly in Europe.

Accor is expected to pay an ordinary dividend of €1.18 per share.