RevPAR gains drive Accor's strong 1H earnings

PARIS - Accor reported results for the first half of 2024 and highlighted a 6% jump in RevPAR year-over-year, as well as net unit growth that accelerated to 4.1% over the past 12 months.

“Once again in this first half-year, Accor posted solid performances, in line with the medium-term outlook we presented to our investors last year,” said Accor Chairman and CEO Sébastien Bazin. “This demonstrates the strength of our model, the operational and financial discipline of our teams, and the strong momentum of the group and its brands.”

Bazin added that activity in the second quarter remained strong in all regions and for all Accor brands. “Our pace of development accelerated and our leading position in luxury and lifestyle was further strengthened by major partnerships. These performances enable us to raise our RevPAR target for 2024 and to reaffirm our confidence in the group’s strength and ambition.”

On the earnings call, CFO Martine Gerow added that Accor expects strong performance momentum to continue, especially in the Middle East and Southeast Asia. She also said Europe and North Africa should benefit from the Paris Olympics.

During the first half of 2024, Accor opened 146 hotels, representing 24,000 rooms for a net unit growth of 4.1% over the last 12 months. At the end of June 2024, the group had a hotel portfolio of 838,722 rooms (5,682 hotels) and a pipeline of 218,000 rooms (1,297 hotels).

For FY 2024, Accor is announcing the following guidance:

• RevPAR growth of between 4% and 5%
• Network unit of between 3% and 4%
• A positive contribution to EBITDA by Services to Owners
• EBITDA of between €1,095 million and €1,125 million

Net profit, Group share, amounted to €253 million for the first half of 2024 compared to €248 million in the first half of 2023.

The improvement to €49 million in the share of net profit of equity-investments for the first half of 2024, compared with €9 million in the first half of 2023, is mainly linked to AccorInvest, which benefited from the stabilization of activity in Europe and the recognition of capital gains linked to its ongoing asset disposal plan.

Group EBITDA amounted to €504 million for the first half of 2024, up 13% compared to the first half of 2023. This performance was linked to strong revenue, the operating leverage of the M&F activity and strict cost discipline in Services to Owners, enabling the Group to post positive EBITDA for this part of the business, as expected.

The Premium, Midscale and Economy (PM&E) division posted a 4% year-over-year increase in RevPAR during the second quarter, still mostly driven by prices rather than by occupancy rates. The Luxury & Lifestyle (L&L) division posted an 8% increase in RevPAR compared to the second quarter of 2023, mainly driven by higher occupancy rate.

For the first half of 2024, Accor recorded revenue of €2,677 million, up 11% compared to the first half of 2023. This growth breaks down as a 4% increase for the Premium, Midscale and Economy division and a 22% increase for the Luxury & Lifestyle division.

Premium, Midscale and Economy, which includes fees from Management & Franchise (M&F), Services to Owners and Hotel Assets & Other of the Group’s Premium, Midscale and Economy brands, generated revenue of €1,473 million, up 4% compared to the first half of 2023. This increase is broadly in line with the level of activity in the first half.

The Management & Franchise (M&F) business posted revenue of €431 million, up 7% compared to the first half of 2023 and slightly exceeding RevPAR growth during the period (+6%).

Luxury & Lifestyle, which includes fees from Management & Franchise (M&F), Services to Owners and Hotel Assets and Other of the Group’s Luxury & Lifestyle brands, generated revenue of €1,243 million, up 22% compared to the first half of 2023. Accor said this increase reflects the excellent performance of this business, the increase of the fees linked to the residential activity and a scope effect linked to the takeover of Potel & Chabot.

The Management & Franchise (M&F) business posted revenue of €242 million, up 15% compared to the first half of 2023, driven by RevPAR growth (+7%) and the favorable timing of fees related to the residential activity in the Lifestyle segment.

The Management & Franchise (M&F) business recorded revenue of €673 million, up 10% compared to the first half of 2023. This reflected the increase in RevPAR in the Group’s various regions and segments (+6% compared to 2023), amplified by the residential activity in the Lifestyle segment.

The Luxury & Lifestyle division generated EBITDA of €196 million, up 13% compared to the first half of 2023.