Accor Group, for full-year 2023, reported that earnings before interest, taxes, depreciation and amortization (EBITDA) surpassed the 1 billion euro mark for the first time in the company’s history, reaching 1.003 billion euros ($1.085 billion), up 49% year-over-year.
“While there were numerous reasons for this success, the solid performances were above all attributable to the group’s teams,” said Sébastien Bazin, chairman/CEO, Accor. “I would like to thank them for their commitment and their know-how in an industry whose strength lies above all in the women and men on the ground daily who raise the profile of our brands with a passionate and generous sense of hospitality. Over the past year, the group achieved growth in all segments and geographies, illustrating the strength of its asset-light model; the efficiency of its organization based on the two divisions, Premium, Midscale and Economy on the one hand, and Luxury and Lifestyle on the other; the desirability of its brands; and the strength of its distribution and loyalty tools, as well as its financial discipline.
He continued, “While the geopolitical backdrop remains complex, 2024 is set to be rich in major international events which should continue to fuel growth and we start this new year with confidence. Accor is ideally positioned to continue its bold expansion and bring to life its vision of a pioneering, responsible hospitality industry that creates value for its shareholders and its partners.”
In 2023, Accor opened 291 hotels, corresponding to 41,000 rooms, for net network growth of 2.4% in the last 12 months. At the end of December 2023, the group had a hotel portfolio of 821,518 rooms (5,584 hotels) and a pipeline of 225,000 rooms (1,315 hotels).
Fourth-quarter RevPAR
The Premium, Midscale and Economy (PM&E) division grew its RevPAR by 12% versus Q4 2022, still driven more by prices than the rise in occupancy rates.
The Europe North Africa (ENA) region posted RevPAR up 8% relative to Q4
- In France, which represents 43% of the region’s room revenue, RevPAR growth stabilized. The Paris region has been impacted by an unfavorable calendar leveled off with major events in 2023, such as the Paris Motor Show, the SIAL food show and the SIMA Agriculture show, which did not take place during the year. The provinces continued to enjoy steady business levels.
- The U.K., which represents 13% of the region’s room revenue, posted solid and balanced growth in RevPAR between London and other
- In Germany, 14% of the region’s room revenue, RevPAR continued to improve compared with previous quarters, notably thanks to Christmas markets. Nevertheless, occupancy rates still harbor strong upside potential. Indeed, they remain significantly behind pre-crisis levels.
The Middle East, Africa & Asia-Pacific region reported a 19% increase in RevPAR compared with Q4 2022, benefiting from a considerable rebound in business in Asia.
- The Middle East Africa, 26% of room revenue in the region, continued to apply strong price increases buoyed by steady leisure demand despite the conflict in Israel.
- Southeast Asia, 29% of room revenue in the region, saw RevPAR growth comparable to the Middle East, mainly driven by prices and supported by leisure demand.
- The Pacific, 26% of room revenue in the region, is now entering a normalization phase with more measured RevPAR growth, driven by occupancy rates in the fourth quarter.
- In China, 19% of hotel room revenue in the region, the recovery continued with marked RevPAR growth compared with Q4. Business is now slightly higher than the level seen in 2019, as was the case in the third quarter.
The Americas region, which mainly reflects the performances of Brazil (65% of room revenue for the region), reported RevPAR growth up 15% compared with Q4. Business continued to benefit from price increases, notably supported by congresses and events that took place over the period.
The Luxury & Lifestyle (L&L) division reported an 8% increase in RevPAR compared with Q4 2022, driven mainly by higher occupancy rates.
The Luxury segment, which accounts for 77% of the division’s room revenue, posted a 10% increase in RevPAR compared with Q4 2022. This increase was driven by the Asia-Pacific region where growth was Although occupancy rates improved clearly, they are still lagging pre-crisis levels by 5 points.
Lifestyle RevPAR was stable compared with Q4 2022. The more rapid recovery in this segment in 2022 led to a less favorable basis of comparison, amplified by the soccer World Cup which took place in Qatar in Q4 2022. Adjusted from this event, RevPAR in the Lifestyle segment increased by 6% over the quarter.
Consolidated revenue
The group reported revenue of 5.056 billion euros ($5.468 billion) in 2023, up 18% like-for-like (LFL) compared with 2022. This growth breaks down into a 17% increase for the Premium, Midscale and Economy (PM&E) division and 22% for the Luxury & Lifestyle division.
Scope effects, linked mainly to the full-year effect of Paris Society (acquired in 2022) and the takeover of Potel & Chabot (in October 2023) in the Luxury & Lifestyle division (the Hotel Assets & Other segment), positively contributed for 285 million euros ($308.2 million).
Currency effects had a negative impact of 228 million euro ($246.5 million), stemming mainly from the Australian Dollar (-7%), the Egyptian Pound (-40%) 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 2.960 billion euros ($3.201 billion), up 17% LFL versus 2022. This increase reflects the solid business levels recorded over the period.
Management & Franchise (M&F) revenue stood at 854 million euros ($923.7 million), up 27% LFL versus 2022 and in line with the increase in RevPAR over the period (+24%). The regional performance of Management & Franchise is detailed in the pages hereafter.
Services to Owners revenue, which includes the Sales, Marketing, Distribution and Loyalty division, as well as shared services and the reimbursement of hotel costs, came to 1.076 billion euros ($1.163 billion), up 11% LFL compared with 2022. This increase, which was more measured than RevPAR growth, reflects the comparison basis from the previous year which included the rebilling of costs incurred by Accor as part of its reception services for supporters during the soccer World Cup in Qatar.
Hotel Assets & Other revenue was up 15% LFL relative to 2022. This segment, closely linked to business in Australia, was impacted by a less favorable base effect owing to the recovery in leisure tourism which materialized earlier than for the rest of the Group.
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 2.175 billion euros ($2.351 billion), up 22% LFL versus 2022. This increase also reflects solid business levels over the period, as was the case for the Premium, Midscale and Economy division.
Management & Franchise (M&F) revenue stood at 446 million euros ($482 million), up 32% LFL versus 2022, driven by the increase in RevPAR (+20%) and a sharp acceleration in hotel incentive fees in management contracts. The segment performance of Management & Franchise is detailed in the pages hereafter.
Services to Owners revenue, which includes the Sales, Marketing, Distribution and Loyalty division, as well as shared services and the reimbursement of hotel costs, came to 1.359 billion euros ($1.469 billion), up 18% LFL, compared with 2022.
Hotel Assets & Other revenue was up 32% LFL relative to 2022. It included a significant scope effect following the takeover of Paris Society in November 2022 and Potel & Chabot in October 2023.
Outlook
- The group confirmed its medium-term growth prospects as disclosed during the Investor Day on June 27, 2023:
- Annualized RevPAR growth of between 3% and 4% (CAGR 2023-27)
- Average annual network expansion of between 3% and 5% (CAGR 2023-27)
- M&F 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%
