PARIS, 1 August 2022: Global hotel group Accor reported a strong rebound in its half-year 2022 performance last week that presented a significant improvement in profitability and cash flow generation.
Revenue gains clocked a 109% improvement to reach EUR1,725 million, and EBITDA was positive at EUR205 million, giving the group a net profit group share positive at EUR32 million.
Accor chairman and chief executive officer Sébastien Bazin commented on the turnaround in performance: “Once again this quarter, Accor reported very strong business growth, exceeding pre-crisis levels for the first time. This marked rebound in all regions and for all of our brands.
“The summer will confirm these trends, and the fall promises to be strong with the recovery of major seminars and conventions. Nevertheless, the group remains attentive to the evolution of the geopolitical and economic environment. At this stage, the group should report strong growth in EBITDA, with a target of more than €550 million for the full-year 2022”.
The group’s business rebounded significantly in H1 2022 after two years of major pandemic-related disruptions in the tourism and hospitality industry. In Q2 2022, activity recovered to levels close to, if not above, the 2019 levels in almost all of our geographies. China was one of the exceptions due to travel restrictions as part of its strict enforcement of a “zero-Covid” policy. This, in turn, impacted Southeast Asia, which is highly dependent on Chinese leisure visitors prevented from travelling overseas following the suspension of non-essential outbound travel.
During the first half of 2022, Accor opened 85 hotels, representing 11,700 rooms, i.e., net system growth of 1.8% in the last 12 months. By June 2022, the group had a hotel portfolio of 777,945 (5,300 hotels) and a pipeline of 212,000 rooms (1,215 hotels) pipeline.
For 2022, the group forecasts a net unit growth in the network of around 3.5%.
The group reported H1 2022 revenue of EUR 725 million, up 97% like-for-like compared with H1 2021. By activity, this growth breaks down into a 119% increase for HotelServices and 57% for Hotel Assets & Other. Compared with RevPAR (change presented versus 2019 throughout this release), the like-for-like decline in revenue versus H1 2019 is 10%.
Changes in the consolidation scope, mainly due to the consolidation of Ennismore, and the reopening of Pullman Montparnasse contributed positively by EUR31 million. Currency effects had a positive impact of EUR69 million, mainly due to the US dollar ((9)%).
Hotel Services revenue
Hotel Services, which includes fees from management & franchise (M&F) and services to owners, reported EUR1,276 million in revenue, up 119% like-for-like versus H1 2021 (down 12% like-for-like versus H1 2019). This increase reflects the significant recovery in the year’s first half.
Revenue in Management & Franchise (M&F) stood at EUR434 million, up 153% like-for-like versus H1 2021 (down 15% like-for-like versus H1 2019), with regional performances correlated to the business recovery in the considered countries. In general, the slightly sharper decline in M&F revenue compared with RevPAR (down 11% in H1 2022 versus H1 2019) can be attributed to the decrease in incentive fees based on the hotel operating margin generated from management contracts.
Consolidated RevPAR was down 11% overall in H1 2022 versus H1 2019 and up 1% in Q2 2022 versus Q2 2019. These figures reflect a month-after-month sequential improvement in business with a sharp price increase, driven by demand and inflation. Therefore, activity reached levels close to or even higher than 2019 in almost all regions in the second quarter.
RevPAR continued to improve sequentially in Asia-Pacific (+25 percentage points between Q1 2022 and Q2 2022). It was down 18% in Q2 2022 versus Q2 2019.
Pacific confirmed the recovery already seen in Q1 2022 and ended the second quarter up 9% versus Q2 2019. Reopening internal and external borders by the end of 2021 accelerated this recovery.
China saw a slight month-after-month pick-up in business in Q2 2022. However, the restrictions implemented as part of the strict enforcement of its “zero-Covid” policy adversely affected its performance and resulted in a 38% decline in RevPAR versus Q2 2019.
In Southeast Asia, RevPAR was down 31% in Q2 2022 versus Q2 2019. Although the main travel restrictions have been lifted, the region’s dependence on Chinese visitors harmed the recovery speed.
In the India, Middle East, Africa & Turkey region, the rebound in RevPAR, which exceeded the 2019 level (+32% in Q2 2022), was confirmed for a third consecutive quarter.
The United Arab Emirates continued to outperform after a strong Q1 boosted by the world Expo 2020.
In Saudi Arabia, the broader reopening of the holy cities for pilgrimages has led to a sharp rebound in activity, particularly during April Ramadan. This recovery is also expected to continue with the Hajj in July.
The full press release on Accor’s first half-year 2022 report visit: