Accor has reached 1 million hotel rooms in operation and its pipeline combined, and buoyed by the company's strong performance in the first quarter, executives have raised their expectations for 2023.
Executives said the French hotel firm's portfolio now consists of 507 hotels in its luxury and lifestyle division, with a further 110 properties in the pipeline, for a total of approximately 161,000 rooms. In its premium, midscale and economy division, there are currently 4,937 hotels in operation and 996 in the pipeline, which combined total approximately 853,000 rooms.
In all, Accor has a global inventory of approximately 1,014,000 rooms in 6,540 hotels.
Accor confirmed it had reached this mark at the end of December.
In the first quarter of 2023, Accor opened 36 hotels and approximately 4,400 rooms, contributing to a network growth of 2.9% in the past 12 months.
During a presentation of the French hotel firm’s first-quarter earnings, Jean-Jacques Morin, CEO for premium, midscale and economy brands and Accor's deputy CEO, said these first-quarter openings did not constitute “a stellar quarter by any means” for openings.
“On top of that, we’ve done a little bit of active churning, I would say. … The assumption one should take is that pipeline is not going to go down for the rest of the year,” he said.
Morin added that comparable, systemwide revenue per available room increased 57% in the first quarter versus 2022 and 19% versus 2019, giving executives confidence to upgrade full-year 2023 RevPAR guidance from the previously announced range of between 5% and 9% to double-digit figures.
Morin clarified that "somewhere between 10% and 14% [RevPAR growth] is the most probable scenario at this juncture [but] it can be higher than that."
Morin said business groups were not expected to come back in meaningful levels in 2023, but that has been the case in Asia-Pacific region, notably Greater China, with the region posting an increase in RevPAR of 77% from last year.
“Consumer appetite for traveling is higher than ever, and [we are] perfectly positioned. … Asian momentum is definitely firming up. We are expecting it. We anticipated it, and it is there,” he said.
“Pricing power remains remarkable,” he said, noting that average daily rate in the first quarter was 20% above 2022 levels and 27% above 2019.
“As anticipated, occupancy is recurring. We see it increasing quarter after quarter, and it is now reaching an average 60%,” he added.
Morin said overall occupancy remained 5% down compared to 2019, which he attributed in part to remaining jitters in airline capacity.
Strength in Numbers
Accor's revenue for the first quarter was approximately 1.14 billion euros ($1.54 million).
Accor's premium, midscale and economy division contributed 681 million euros of that overall revenue, up 62% from the same period in 2022, and its luxury and lifestyle division contributed 477 million euros, up 52%.
In an earnings news release, Accor Chairman and CEO Sébastien Bazin said, “These excellent performances were driven in particular by the strong rebound in Asia, good price levels and increased occupancy rates.”
The continuation of Bazin’s role as CEO and chairman has been approved by Accor’s board and will be voted on at its next shareholders’ meeting May 17.
Morin said industrial unrest and protests in Paris did not significantly affect RevPAR of its French hotels, which accounted for 46% of the country’s hotel rooms revenue. He added international guests have now returned to Paris.
Restructuring
Accor officially debuted in the first quarter its new brand-portfolio division into two segments — luxury and lifestyle; and premium, midscale and economy — amid other organizational developments.
In January, the firm sold its remaining stake in H World Group, formerly Huazhu Group, for a sum of $460 million. It said the accumulated disposal value since 2019 now totaled $1.2 billion, up from an initial investment of $200 million.
H World recently also sold its stake in Accor, but the two companies will continue to work together in Greater China.
In a C-suite change, Omer Acar started on March 1 as CEO of Raffles and Orient Express.
On July 1, Martine Gerow will take over the role of group chief finance officer, the role for which Morin was appointed and continues to have responsibility for another two months or so.
Gerow previously held the same role at American Express Global Business Travel.
Also in January, Accor announced its 45th brand, midscale Handwritten Collection, which started with two operating hotels and 10 more signed. Five of those are due to open before the end of the year.