Accor, for the first quarter ended March 31, reported revenue of 1.236 billion euros ($1.324 billion), up 8% on a like-for-like (LFL) basis compared with the first quarter 2023. RevPAR for the Premium, Midscale & Economy division increased by 8%, while the Luxury & Lifestyle division reported a 7% increase in RevPAR.
“In this first quarter, marked by the group’s return in CAC 40, Accor once again delivered a solid performance, increasing revenue in all regions, notably in the Middle East and Asia-Pacific,” said Sébastien Bazin, chairman/CEO, Accor. “Our network growth also accelerated, reflecting the attractiveness of our brands and the trust of our owners. By continuing to combine high standards with operational flexibility, quality of execution and financial discipline, we are confident in our ability to pursue a growth path that is in line with the objectives we have set for ourselves.”
In the first quarter of 2024, Accor opened 53 hotels corresponding to more than 8,000 rooms, representing a net unit growth of 3.1% over the last 12 months. At the end of March, the Group had a hotel network of 825,313 rooms (5,613 hotels) and a pipeline of 224,000 rooms (1,297 hotels).
First-quarter 2024 RevPAR
Premium, Midscale & Economy
The Premium, Midscale & Economy (PM&E) division posted an 8% increase in RevPAR compared with the first quarter of 2023, still more driven by rates than by occupancy rates.
The Europe North Africa (ENA) region reported a 5% increase in RevPAR compared with the first quarter of 2023.
- In France, which represents 44% of the region’s room revenue, the Paris region and the provinces posted comparable RevPAR growth. RevPAR growth in March was particularly strong, benefiting from a higher number of events than in March 2023 and the absence of a major strike compared to the same period last year.
- The U.K., 13% of the region’s room revenue, posted RevPAR growth comparable to France, with an even balance between London and the provinces.
- In Germany, 13% of the region’s room revenue, RevPAR growth was stronger than in France and the U.K. This change reflects a steady improvement and benefits from a more favorable base effect, as the activity recovery in the country was delayed as compared to the rest of Europe.
The Middle East, Africa and Asia-Pacific region reported a 12% increase in RevPAR compared with the first quarter of 2023.
- The Middle East-Africa region, 26% of room revenue in the region, continued to post solid RevPAR growth, driven by rates and benefiting—in particular, Saudi Arabia—from the Ramadan calendar, most of which was held in the first quarter of 2024.
- Southeast Asia, 30% of room revenue in the region, also reported strong RevPAR growth, driven in particular by Singapore and Thailand.
- The Pacific, 27% of room revenue in the region, continued the trend observed in the fourth quarter of 2023, with RevPAR growth driven primarily by higher occupancy rates.
- In China, 18% of hotel room revenue in the region, business continued to recover, albeit at a measured pace.
The Americas region, which mainly reflects the performance of Brazil (65% of room revenue for the region), posted a 4% increase in RevPAR compared with the first quarter of 2023. The activity, which had exceeded the occupancy recorded prior to COVID, posted a slight decline in demand. Nevertheless, this slight decline in occupancy was more than offset by higher average rates.
Luxury & Lifestyle
The Luxury & Lifestyle (L&L) division reported a 7% increase in RevPAR compared with the first quarter of 2023, mainly driven by higher occupancy.
The Luxury segment, 77% of the division’s room revenue, posted a 6% increase in RevPAR compared with the first quarter of 2023. Being more exposed to North America than the other segments, Luxury RevPAR growth is slightly more modest, reflecting a more mature market.
The Lifestyle segment reported solid RevPAR growth of 10% compared with the first quarter of 2023. This was driven by improved occupancy at resorts in Turkey, Egypt and the UAE.
Group revenue
For the first quarter of 2024, Accor reported revenue of 1.236 million euros ($1.324 billion), up 8% on a like-for-like basis (LFL) compared with the first quarter 2023. This increase breaks down into a 6% growth for the Premium, Midscale and Economy division and a 12% growth for the Luxury & Lifestyle division.
Scope effects, mainly linked to the acquisition of Potel & Chabot (in October 2023) in the Luxury & Lifestyle division (Hotel Assets and Other segments), positively contributed for 38 million euros ($40.7 million). Currency effects had a negative impact of 37 million euros ($39.6 million), mainly due to the Australian dollar (-5%) and the Turkish lira (-40%).
Premium, Midscale & Economy revenue
Premium, Midscale & Economy, which includes fees from Management & Franchise (M&F), Services to Owner and Hotel Assets & Other of the group’s Premium, Midscale & Economy brands, generated revenue of 690 million euros ($739.2 million), up 6% LFL compared with the first quarter of 2023. This increase reflects the sustained activity reported over the period, mitigated by a base effect in Services to Owner.
The Management & Franchise (M&F) revenue totaled 192 million euros ($205.7 million), up 14% LFL compared with the first quarter of 2023. This increase, which was higher than the 8% rise in RevPAR over the period, reflects the strong growth in incentive fees provided for in management contracts, particularly in Asia-Pacific region. Management & Franchise performance by region is detailed on the following page.
Services to Owners revenue, which includes Sales, Marketing, Distribution and Loyalty activities, as well as shared services and the reimbursement of hotel costs, totaled 252 million euros ($270 million), down 1% LFL compared with the first quarter of 2023. This decline reflects a base effect on the same period last year, which included the final rebilling of costs incurred by Accor as part of its reception services for supporters during the soccer World Cup in Qatar.
Hotel Assets and Other revenue was up 9% LFL compared with the first quarter of 2023. This segment, which is strongly linked to activity in Australia and Brazil, reflects the level of activity recorded in these regions.
Luxury & Lifestyle revenue
Luxury & Lifestyle, which includes fees from Management & Franchise (M&F), Services to Owner and Hotel Assets & Other of the Group’s Luxury & Lifestyle brands, generated revenue of 566 million euros ($606.4 million) up 12% LFL compared with the first quarter of 2023. This increase also reflects the good activity performance over the period, as well as the opening of new venues at Paris Society.
Management & Franchise (M&F) revenue totaled 102 million euros ($109.2 million), up 11% like-for-like compared with the first quarter of 2023, driven by a 7% increase in RevPAR and strong growth in incentive fees from management contracts. The performance of the Management & Franchise business by segment is detailed on the following page.
Services to Owners, which includes Sales, Marketing, Distribution and Loyalty activities, as well as shared services and the reimbursement of hotel costs, totaled 347 million euros ($371.6 million), up 12% LFL compared with the first quarter of 2023.
Hotel Assets and Other revenue was up 13% LFL compared with the first quarter of 2023. This change on a LFL basis reflects the opening of the Abbaye des Vaux de Cernay hotel and new restaurant venues at Paris Society, while the reported change of +77% includes a significant scope effect linked to the acquisition of Potel & Chabot in October 2023.
Management & Franchise revenue
Management & Franchise (M&F) posted revenue of 294 million euros ($314.9 million), up 13% LFL compared with the first quarter 2023. This change reflects RevPAR growth of 8% LFL vs. the first quarter of 2023 amplified by the sharp rise in incentive fees provided for in hotel management contracts, particularly in the Asia-Pacific and Lifestyle segments, as well as a termination fee for a breach of contract in the Premium, Midscale & Economy segment in the Americas.
Outlook
- Annualized RevPAR growth between 3% and 4% (CAGR 2023-27)
- Annualized net unit growth between 3% and 5% (CAGR 2023-27)
- M&F revenue growth between 6% and 10% (CAGR 2023-27)
- A marginally positive EBITDA contribution from Services to Owners
- EBITDA growth between 9% and 12% (CAGR 2023-27)
- Recurring free cash flow conversion in excess of 55%
