With just a few months left in 2023, Accor is raising its outlook on hotel revenue per available room growth and adjusted earnings before interest, taxes, appreciation and amortization.
Executives at the France-based global hotel company now anticipate full-year RevPAR growth to exceed 20%, according to its latest earnings release. In the third quarter of 2023, Accor's hotel RevPAR outpaced third-quarter 2022 by 15%.
Sébastien Bazin, Accor’s chairman and CEO, in a statement accompanying the earnings results, said: “This momentum should continue for the coming months, driven by robust demand in both leisure and business tourism. The performance enables us to raise our 2023 guidance and to continue investing in our brands, talents and digital tools.”
Accor also anticipates consolidated EBITDA to land between €955 million ($1 billion) and €985 million, up from a prior range of between €930 million and €970 million.
In Accor's two hotel divisions, the premium, midscale and economy segment posted a 15% increase in RevPAR in the third quarter, while its luxury and lifestyle division reported a 14% RevPAR increase.
Revenue for the period was €1.29 billion, a like-for-like increase of 13% over the same quarter in 2022.
Martine Gerow, Accor's group chief financial officer, said on a conference call that Accor's performance results were driven by hotel average daily rate, but there have been some notable examples of increased occupancy in some markets.
“Strong pricing resilience, [but] one-third by occupancy gains. … International leisure guests returned to Paris this summer, and also the Rugby World Cup has shown good demand, especially in cities where we have more limited supply,” she added.
By region, its Middle East, Africa and Asia-Pacific division saw the highest jump in RevPAR, up 36% in year-over-year terms.
Gerow mentioned the tension between Israel and Hamas in the Middle East. Accor has three hotels in Jerusalem and one in Tel Aviv.
“We’ll continue to monitor the situation. It would be premature to comment on changes to pricing in the region,” she said.
In the Middle East, Accor has 2% of its portfolio in Turkey and 9% across the Middle East and North Africa, Gerow said. In the Gulf nations, Accor's exposure is approximately 5%.
There have been hotel booking cancellations, but the rate of cancellations is low, Gerow said, and some outbound Israeli guests have canceled bookings.
Portfolio Growth and Other Developments
One thing Gerow did not want to talk about is 2019, which hotel companies across the industry have used to benchmark performance to pre-pandemic levels.
“We’re not talking about 2019 anymore. That was a long time ago,” she said.
Accor’s portfolio increased year over year by 2.3%. As of Sept. 30, Accor has 5,537 total hotels and 812,425 rooms. Of that number, 111 hotels and 21,949 rooms are owned and leased, 2,283 hotels and 443,971 rooms are managed and 3,143 hotels and 346,505 rooms are franchised.
“We’re confident that we will be able to accelerate this, especially in luxury and lifestyle,” Gerow said.
Accor also announced the launch of a €400 million share buyback program over the next six months. Gerow said the first batch of returned capital is “consistent with [Accor’s] commitment to return €3 billion to shareholders between this year and 2027; €80 million has already been completed.”
The company also recently regained its investment-grade credit rating, Gerow said, and that development led Accor management to launch its €500-million bond program earlier this month.
As of publication time, Accor’s stock was trading on the Euronext Stock Exchange at €29.84 per share, an increase of 27.8% year to date. Euronext was up 1.4% over the same period.