The first quarter of 2024 demonstrated the hotel demand in all Accor Group regions and segments. Operating performance indicators (RevPAR and portfolio growth) are trending positively, and the group has continued to manage its balance sheet in line with its commitments.
Sébastien Bazin, chairman and CEO of Accor, said, “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. 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 percent over the last 12 months. At the end of March 2024, 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
The Premium, Midscale & Economy (PM&E) division posted an 8 percent 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 percent increase in RevPAR compared with the first quarter of 2023.
In France, which represents 44 percent 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 strike compared to the same period last year.
The United Kingdom, 13 percent of the region’s room revenue, posted RevPAR growth comparable to France, with an even balance between London and the provinces.
In Germany, 13 percent of the region’s room revenue, RevPAR growth was stronger than in France and the United Kingdom. This change reflects an improvement and benefits from a 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 percent increase in RevPAR compared with the first quarter of 2023.
The Middle East Africa region has 26 percent of room revenue continued to post solid RevPAR growth, driven by rates and benefits in Saudi Arabia from the Ramadan calendar, most of which was held in the first quarter of 2024.
In South-East Asia, 30 percent of room revenue in the region, reported RevPAR growth, driven in particular by Singapore and Thailand.
The Pacific, 27 percent 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 percent 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 percent of room revenue for the region), posted a 4 percent increase in RevPAR compared with the first quarter of 2023. The activity, which had exceeded the occupancy recorded before COVID, posted a slight decline in demand. Nevertheless, this slight decline in occupancy was more than offset by higher average rates.
The Luxury & Lifestyle (L&L) division reported a 7 percent increase in RevPAR compared with the first quarter of 2023, mainly driven by higher occupancy.
The Luxury segment, 77 percent of the division’s room revenue, posted a 6 percent 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 percent compared with the first quarter of 2023. This was driven by improved occupancy at resorts in Turkey, Egypt, and the United Arab Emirates.
Group revenue
For the first quarter of 2024, the Group reported revenue of €1,236 million, up 8 percent on a like-for-like basis (LFL) compared with the first quarter of 2023. This increase breaks down into a 6 percent growth for the Premium, Midscale & Economy division and a 12 percent 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 segment), positively contributed to €38 million.
Currency effects had a negative impact of €37 million, mainly due to the Australian dollar (down 5 percent) and the Turkish lira (down 40 percent).
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, up 6 percent 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, up 14 percent LFL compared with the first quarter of 2023. This increase, which was higher than the 8 percent rise in RevPAR over the period, reflects the strong growth in incentive fees provided for in management contracts, particularly in the 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, down (1) percent 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 percent 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, up 12 percent 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, up 11 percent like-for-like compared with the first quarter of 2023, driven by a 7 percent 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, up 12 percent LFL compared with the first quarter of 2023.
Hotel Assets and Other revenue was up 13 percent LFL compared with the first quarter of 2023. This change on a like-for-like 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 percent 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, up 13 percent LFL compared with the first quarter 2023. This change reflects RevPAR growth of 8 percent LFL versus the first quarter of 2023 amplified by the sharp rise in incentive fees provided for hotel management contracts, particularly in the Asia-Pacific and Lifestyle segments, and a termination fee for a breach of contract in the Premium, Midscale & Economy segment in the Americas.
Outlook
The group confirmed its medium-term growth perspectives as disclosed during the Investor Day on June 27, 2023:
Annualized RevPAR growth between 3 percent and 4 percent (CAGR 2023-27)
Annualized net unit growth between 3 percent and 5 percent (CAGR 2023-27)
M&F revenue growth between 6 percent and 10 percent (CAGR 2023-27)
A marginally positive EBITDA contribution from Services to Owners
EBITDA growth between 9 percent and 12 percent (CAGR 2023-27)
Recurring free cash flow conversion in excess of 55 percent
A return to shareholders of around €3 billion over the 2023-2027 period
In the first quarter of 2024, Accor completed a €400 million share buyback program, with an accretive effect for shareholders through the cancellation of 3.9 percent of its shares.
Disposal of Accor Vacation Club
On January 30, 2024, Accor entered into an agreement with Travel + Leisure to sell Accor Vacation Club, its timeshare business in Australia, New Zealand, and Indonesia on the basis of an enterprise value of AUD78 million (€48 million). The agreement also includes an exclusive franchise agreement for Travel + Leisure’s future new timeshares under the Accor brands in Asia Pacific, the Middle East, Africa, and Turkey. This transaction is part of the group’s ongoing asset-light strategy and was closed at the end of Q1 2024.
Bond issue
On March 4, 2024, Accor successfully placed a €600 million 7-year bond with a coupon of 3.875 percent. The transaction was more than 4 times oversubscribed, reflecting Accor’s strong credit quality and investor confidence in its business model, growth potential, and financial structure. This transaction enables the group to take advantage of attractive market conditions and significantly extend the average maturity of its debt.
Share buyback
On April 5, 2024, Accor announced the completion of its €400 million share buyback program announced on February 22, 2024.
A first tranche of share buybacks totaling €275 million was completed through a share purchase agreement signed with Jinjiang International on March 11, 2024. The transaction accounted for 7 million shares at a price per Accor share of €39.22.
The remaining €125 million of the share buyback program, launched on March 20, 2024, was completed on April 4, 2024, with the acquisition of 2,923,228 shares at an average price of €42.93.
At completion, the group acquired 9,923,228 shares at an average price of €40.31. These shares have been canceled.
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