One of the hotel industry's major global brand companies has yet to see major demand swings from global economic uncertainty and U.S. tariff talk.
France-based Accor reported its first quarter revenue rose 9.2% year over year to €1.35 billion ($1.5 billion), which surpassed executives' expectations.
Martine Gerow, Accor's group chief financial officer, said the company has “started the year with sustained momentum” and added executives anticipated Accor's hotels would perform better in the second half of the year.
The only demand softness in the first quarter came as the quarter concluded, Gerow said.
“First-quarter [revenue per available room] reflected solid trading,” she said, adding that March was “softer” than January and February.
But a major relief is that the geopolitical and economic shockwaves from U.S. President Donald Trump's back-and-forth tariff policy hasn't led to major declines in hotel demand or future bookings at Accor's properties, Gerow said.
Accor’s business in the U.S. equals 5% of its rooms revenue business, and for U.S. guests traveling internationally, it represents less than 3%, Gerow said.
“When you’re looking at April or May, we’re not really seeing much change in [U.S.] bookings,” she said. “The only market where we’ve seen an inflection, which is actually benefitting us, is Canada, where we see Canadians who were planning to travel in the U.S. actually staying in Canada and some events that were planned in the U.S. now repositioned in Canada.”
Accor's global hotel RevPAR rose 5% in the first quarter. RevPAR in Accor's premium, midscale and economy increased 3.4% while lifestyle hotel RevPAR rose 8.3%, Gerow said.
In a news release accompanying the results, Accor CEO and Chairman Sébastien Bazin said that the company is “maintaining strong operational discipline [and in] pursuing our strategy of development and value creation, [we] are confident in our ability to continue improving our performance.”
Accor achieved two “significant breakthroughs” in the first quarter, Gerow said, strengthening its portfolio in two key markets: India and Mexico.
In India, Accor signed a deal with Indian hotel-development firm InterGlobe with a goal of opening 300 Accor-branded hotels. Currently, it has 71. In addition, the two partners invested in a majority share of hotel-franchising firm Treebo, which has approximately 800 hotels across India. As part of the deal, Treebo signed 10 Mercure-branded hotels in India and will become the master franchisor for Accor’s Ibis and Mercure brands in the country.
In Mexico, Accor signed 17 hotel management agreements in the quarter with Royal Holiday Group for a total consideration of $79 million to “create a platform to accelerate the development of lifestyle and [premium. midscale and economy] hotels” across Mexico and Central and South America.
In the quarter, Accor opened 45 hotels and more than 5,900 rooms, a 2.7% increase year over year by room count. Worldwide, Accor now has 5,695 hotels and 847,290 rooms. In its development pipeline, Accor has 1,388 hotels and more than 235,000 rooms.
In February, Accor issued a €600 million ($682 million) eight-year bond with a 3.5% coupon. The company also launched another share buyback program of €200 million during the quarter.
Its loyalty program ALL, or Accor Live Limitless, reached 100 million members in March, making it the fifth hotel firm to reach that milestone and the first non-U.S. company to do so.
As of press time, Accor stock was trading at €42.80 euros a share, up 2.5% year over year. The Euronext Stock Exchange was up 86.5% over the same period.