Travel desire, demand and bookings across the globe have helped boost Accor in the first quarter.
The France-based global hotel company reported that its hotels in the Middle East, Africa and Australia significantly contributed to Accor's earnings performance in the quarter.
Year over year, Accor's revenue grew by 8.7% to €1.24 billion ($1.33 billion). Revenue per available room in the first quarter increased globally by 7.6%, but in the Middle East, Africa and Asia-Pacific region, RevPAR jumped 12.1%.
Across its entire portfolio of more than 5,600 hotels, Accor has little exposure in North America. That might have helped its first-quarter earnings due to a slight softening in demand reported by U.S.-based companies such as real estate investment trust Pebblebrook Hotel Trust.
In the Americas, Accor's hotel RevPAR increased 3.6% in the quarter. Occupancy, however, declined 1.3% year over year, and the Americas was Accor's only region that reported an occupancy decline in the quarter. Approximately 65% of the revenue Accor generated came from Brazil.
Martine Gerow, Accor’s CFO, said the Americas portfolio “had exceeded the occupancy recorded prior to COVID-19, [but] posted a slight decline [of -1.3%]. Nevertheless, this slight decline in occupancy was more than offset by higher average rates.”
In a news release accompanying the first-quarter results, Accor CEO and Chairman Sébastien Bazin said “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.”
In the quarter, Accor's net unit growth was 3.1% as the company opened 53 hotels and approximately 8,000 rooms. At the end of March, its hotel and key count stood at 5,613 hotels and 825,313 rooms, while its development pipeline sits at 1,297 hotels and approximately 224,000 rooms. A year ago, Accor announced it had surpassed 1 million rooms in open and pipeline hotels.
Executives confirmed Accor's midterm guidance provided last June, which included earnings before interest, taxes, depreciation and amortization of between 9% and 12%, recurring free cash flow in excess of 55% and the return to shareholders of approximately €3 billion before the end of 2027.
During an investor presentation Friday, Gerow said Accor returned a further €400 million through share buybacks in the first quarter, “with an accretive effect for shareholders through the cancellation of 3.9% of its shares.”
On March 15, Accor rejoined Euronext Paris’ CAC 40 index after a four-year absence.
As of press time, Accor stock was trading at €42.03 a share, an increase of 21.3% year over year. The CAC 40 was up 7% over the same period.
Bazin has commented that Accor's share price has risen notably now that the company has been reorganized into two divisions: luxury and lifestyle and premium, midscale and economy. Accor's efforts have also focused on growing existing brands rather than acquisitions, which has been the firm’s major goal across most of the last decade.