Solid First Half of 2024: Strong Performance Aligned with Growth Objectives
Sébastien Bazin, Chairman and CEO of Accor, said :
” Once again this half-year, Accor has achieved solid performances, in line with the medium-term outlook that we outlined to our investors last year. We are thus demonstrating the strength of our model, the operational and financial discipline of our teams, and the strong momentum of the Group and its brands.
Activity in the second quarter remains strong in all geographic areas and for all our brands, our pace of development is accelerating and our leading position in luxury and lifestyle is further strengthened by leading partnerships. These performances allow us to raise our RevPAR target for 2024 and to reaffirm our confidence in the strength and ambition of the Group.
The coming weeks will also be marked by the Paris 2024 Olympic and Paralympic Games, of which Accor is one of the partners. On the occasion of this unique event, our teams, mobilized for months, will put their know-how, their passion for hospitality and their generosity at the service of the Athletes’ Village, the Media Village and all visitors to our hotels and thus participate in promoting France throughout the world .
The first half of 2024 confirms the Accor group’s growth prospects as presented during the Investor Day on June 27, 2023 and reiterated during the latest results and revenue publications.
The Group’s diversification, both in terms of geography and segments, plays a key role for each of the two divisions. Demand remains generally well oriented and Accor benefits from the exposure required to capture it.
During the first half of 2024, Accor opened 146 hotels corresponding to 24,000 rooms, representing net network growth of 4.1% over the last 12 months. At the end of June 2024, the Group has a hotel portfolio of 838,722 rooms (5,682 hotels) and a pipeline of 218,000 rooms (1,297 hotels).
Q2 2024 RevPAR
The Premium, Mid-Range and Economy (PM&E) division posted a RevPAR up 4% compared to the second quarter of 2023, still driven more by prices than by the occupancy rate.
The Europe North Africa (ENA) region posted a RevPAR increase of 1% compared to the second quarter of 2023.
- In France , which represents 43% of the region’s hotel accommodation revenue, the RevPAR variation is negative compared to the second quarter of 2023, solely linked to the Paris region while the provinces continue to record positive RevPAR growth. This change was anticipated and mainly reflects a high comparable base (notably linked to the presence of the Paris Air Show in June 2023).
- The United Kingdom , 13% of the region’s hotel accommodation revenue, posted slightly positive RevPAR growth in line with the first quarter. The province posted a slight outperformance compared to London.
- In Germany , where 14% of the region’s hotel accommodation turnover comes from, RevPAR growth was stronger than in the two countries mentioned above, particularly in June thanks to the European Football Championship.
The Middle East, Africa & Asia Pacific region posted a RevPAR increase of 7% compared to the second quarter of 2023, with a strong performance in the Middle East and South-East Asia.
- The Middle East, Africa , 27% of the region’s hotel accommodation revenue, continues to post double-digit RevPAR growth, particularly in the United Arab Emirates and Saudi Arabia. The latter’s performance benefited from the Hajj religious pilgrimage in June.
- Southeast Asia, which accounts for 30% of the region’s hotel accommodation revenue, also posted double-digit RevPAR growth. Countries such as Thailand benefited from the gradual recovery of Chinese tourist flows.
- The Pacific , 25% of the region’s hotel accommodation revenue, recorded an improvement in the occupancy rate compared to the second quarter of 2023 but the variation in RevPAR is negative linked to the weakness of leisure demand.
- In China , 19% of the region’s hotel accommodation turnover, the RevPAR variation is negative. The recovery in tourism has taken place as expected but does not benefit the domestic market, Chinese customers are traveling more to Southeast Asian countries.
The Americas region , which mainly reflects the performance of Brazil (64% of the region’s hotel accommodation revenue), posted a RevPAR up 12% compared to the second quarter of 2023. Brazil benefited from a solid event calendar, particularly in Sao Paulo and Rio de Janeiro.
The Luxury & Lifestyle (L&L) division posted a RevPAR up 8% compared to the second quarter of 2023, mainly driven by the increase in the occupancy rate.
- Luxury , 76% of the division’s hotel accommodation revenue, posted a RevPAR up 6% compared to the second quarter of 2023. This performance was driven by all brands. Growth in the occupancy rate was the main driver of the improvement .
- Lifestyle posted RevPAR growth of 14% compared to the second quarter of 2023, driven by prices particularly in Resorts in Turkey, Egypt and the United Arab Emirates.
Group turnover
For the first half of 2024, the Group records a turnover of 2,677 million euros, up 11% compared to the first half of 2023. This increase is broken down into an increase of 4% for the Premium, Mid-Range and Economy division and 22% for the Luxury & Lifestyle division.
Scope effects, mainly linked to the takeover of Potel & Chabot (in October 2023) in the Luxury & Lifestyle division (Hotel Assets and Others segment), contributed positively for 117 million euros.
Currency effects had a negative impact of 63 million euros, mainly linked to the Turkish lira (-39%), the Australian dollar (-4%), the Egyptian pound (-18%) and the Argentine peso (-77%).
Premium, Mid-Range and Economy Sales
Premium, Mid-Range and Economy, which includes the Management & Franchise (M&F) royalty activities, Owner Services and Hotel and Other Assets of the Group’s Premium, Mid-Range and Economy brands, generated revenue of €1,473 million, up 4% compared to the first half of 2023. This increase is relatively in line with the level of activity for the half-year.
The Management & Franchise (M&F) activity recorded revenue of 431 million euros, up 7% compared to the first half of 2023 and slightly higher than the variation in RevPAR observed over the period (+6%).
Revenue from Owner Services , which includes Sales, Marketing, Distribution and Loyalty activities, as well as shared services and reimbursements incurred on behalf of hotels, amounted to €538 million, up 3% compared to the first half of 2023. This increase, more measured than the change in RevPAR, reflects a base effect from the previous financial year, mentioned in the publication of first quarter revenue, which included the re-invoicing of costs incurred by Accor in connection with the provision of fan reception services during the FIFA World Cup in Qatar.
Revenue from Hotel and Other Assets is up 2% compared to the first half of 2023. This segment, closely linked to activity in Australia, is affected by the weakness in leisure demand currently observed.
Luxury & Lifestyle turnover
Luxe & Lifestyle, which brings together the Management & Franchise (M&F) royalty activities, Owner Services and Hotel and Other Assets of the Group’s Luxe & Lifestyle brands, generated revenue of €1,243 million, up 22% compared to the first half of 2023. This increase reflects the very good performance of the business, the increase in royalties related to the residential activity and a scope effect linked to the takeover of Potel & Chabot.
The Management & Franchise (M&F) activity recorded revenue of €242 million, up 15% compared to the first half of 2023, driven by the change in RevPAR (+7%) and a favorable scaling of royalties linked to the residential activity of the Lifestyle segment.
Revenue from Owner Services , which includes Sales, Marketing, Distribution and Loyalty activities, as well as shared services and reimbursements incurred on behalf of hotels, amounted to €716 million, up 9% compared to the first half of 2023. This increase is linked to the growth of the activity in terms of RevPAR and number of rooms.
Revenue from Hotel and Other Assets is up 84% compared to the first half of 2023. This activity includes a significant scope effect linked to the takeover of Potel & Chabot in October 2023.
Management & Franchise Turnover
The Management & Franchise (M&F) activity recorded revenue of €673 million, up 10% compared to the first half of 2023. This variation reflects the growth in RevPAR in the Group’s various geographic areas and segments (+6% compared to the 2023 financial year) amplified by the residential activity of the Lifestyle segment.
Group Gross Operating Surplus
The Group’s Gross Operating Surplus (EBITDA) stands at 504 million euros for the first half of 2024, up 13% compared to the first half of 2023. This performance is linked to the good performance of the business, the operational leverage of the M&F business and strict discipline on the costs of Owner Services, making it possible to post, as anticipated, a positive EBITDA for this part of the business.
Gross Operating Surplus of Premium, Mid-Range and Economy
The Premium, Mid-Range and Economy division posted an EBE of 360 million euros, up 9% compared to the first half of 2023.
The Management & Franchise (M&F) activity recorded an EBE of 299 million euros, up 8% compared to the first half of 2023, and illustrates the operational leverage expected for this activity.
EBE from Owner Services amounts to 13 million euros for the first half of 2024, slightly positive as anticipated in our outlook.
EBE from Hotel and Other Assets is down 6% compared to the first half of 2023. Weak leisure demand in Australia coupled with an unfavorable cost environment explain this decline.
Luxury & Lifestyle Gross Operating Surplus
The Luxury & Lifestyle division generated an EBE of 196 million euros, up 13% compared to the first half of 2023.
The Management & Franchise (M&F) activity recorded an EBE of 169 million euros, up 20% compared to the first half of 2023 and reflecting the strong revenue growth amplified by the operational leverage effect.
The EBE of Owner Services amounts to 4 million euros for the first half of 2024, also slightly positive.
The EBE of Hotel and Other Assets mainly reflects the takeover of Potel & Chabot in October 2023.
Net profit
The net result attributable to the Group is a profit of 253 million euros for the first half of 2024 compared to 248 million euros during the first half of 2023.
The improvement in the share in the results of equity-accounted companies of €49 million for the first half of 2024, compared to €9 million in the first half of 2023, is mainly linked to AccorInvest, which benefited from the stabilization of activity in Europe and the recording of capital gains linked to its ongoing asset disposal plan.
Liquidity generation
During the first half of 2024, the Group’s recurring Free Cash Flow will reach 120 million euros compared to 157 million euros in the first half of 2023. The cash conversion rate is therefore 24%.
Interest paid increases between the first half of 2023 and the first half of 2024 due to the increase in interest on rental debt.
Corporate tax will reach 105 million euros in the first half of 2024 compared to 67 million in the first half of 2023, an increase linked to the growth in activity and the normalization of the post-Covid tax rate.
Recurring investments , which include key money paid for development, and investments in digital and technology, are slightly higher than in the first half of 2023, at €90 million, due to the Group’s acceleration in the Luxury & Lifestyle segment, in line with the outlook communicated during the Investor Day on June 27, 2023.
The variation in working capital requirements is seasonal in nature, and reflects the good performance of the activity during the first half of the year with an increase in customer receivables.
The Group’s Net Financial Debt as of June 30, 2024 stands at 2,934 million euros, compared to 2,074 million euros as of December 31, 2023. The main explanation for this variation is the execution of the share buyback program and the payment of the dividend during the first half of 2024.
As of June 30, 2024, the Group’s average cost of debt stands at 2.6% with an average maturity of approximately 3.5 years.
At the end of June 2024, including the undrawn revolving credit line of €1 billion signed in December 2023, Accor has €1.9 billion in liquidity.
Outlook for fiscal year 2024
For the 2024 financial year, Accor announces the following outlook:
- RevPAR growth between 4% and 5%
- Network growth of between 3% and 4%
- A positive contribution to the EBE of Owner Services
- EBE between 1,095 million euros and 1,125 million euros
Medium-term outlook
The Group maintains its medium-term outlook as communicated during its Investor Day on June 27, 2023:
- Annual RevPAR growth of between 3% and 4% (CAGR 2023-27)
- Annual network growth of between 3% and 5% (CAGR 2023-27)
- M&F revenue growth of between 6% and 10% (CAGR 2023-27)
- A positive contribution to the EBE of Owner Services
- EBE growth between 9% and 12% (CAGR 2023-27)
- A conversion into recurring Free Cash-flow greater than 55%
- A return to shareholders of around 3 billion euros over the period 2023-2027
Events occurring in the first half of 2024
Sale of Accor Vacation Club
On March 1, 2024, Accor sold its timeshare business in Australia, New Zealand and Indonesia, Accor Vacation Club, to Travel + Leisure for a total consideration of AUD 77 million (€47 million). The agreement also provides for the establishment of an exclusive franchise agreement for the future development by Travel + Leisure of new timeshare properties under the Accor brand in Asia-Pacific, the Middle East, Africa and Turkey. This transaction is part of the Group’s continued “Asset light” strategy and was finalized at the end of the first quarter of 2024.
Accor and IDeaS enter into a global partnership
On February 28, Accor announced a global partnership for revenue management across the Accor portfolio. With the adoption of IDeaS’s advanced, tailored RMS solutions, Accor continues to transform its business strategy for the benefit of its hotels, owners and managers, and ensures best-in-class revenue management tools that will drive growth in RevPAR and the Group’s Revenue Generation Index (RGI). Accor will leverage IDeaS to sustain its revenue management strategy by deploying best-in-class technologies, thereby ensuring a competitive advantage by reinforcing value creation across its global portfolio. Built on strategic pillars, these new tools will enable hotels to benefit from dynamic pricing, revenue and profit optimization, and a more precise understanding of the competitive landscape, enabling improved revenue management strategies while fostering a strong culture of revenue management across Accor’s entire global portfolio.
Bond issue
On March 4, 2024, Accor successfully placed a 7-year bond issue for €600 million, with a coupon of 3.875%. The transaction was oversubscribed more than 4 times, reflecting Accor’s strong credit quality and investors’ confidence in its business model, growth potential and financial structure. This transaction allowed the Group to take advantage of good market conditions and significantly extend the average maturity of its debt.
Rikas Takeover
On March 8, 2024, Accor, through its subsidiary Ennismore, acquired 51% of the shares of Rikas Restaurants Management LLC (“Rikas”), a Dubai-based company specializing in the management of luxury restaurants and fine dining establishments.
Share buyback
On April 5, 2024, Accor announced the completion of its €400 million share buyback program announced on February 22, 2024.
A first tranche of share buybacks totalling 275 million euros has been completed
through a share purchase agreement signed with Jinjiang International on March 11, 2024. The transaction involved 7 million shares at a price per Accor share of €39.22. The balance of the share buyback program, launched on March 20, 2024, for €125 million was finalized on April 4, 2024, with the acquisition of 2,923,228 shares at an average price of €42.93. At the end of this program, the Group acquired 9,923,228 shares at an average price of €40.31. These shares were canceled.
Dividends
On June 7, 2024, based on the 2023 results and the dividend distribution policy implemented since 2019 (established on the basis of a distribution of 50% of recurring free cash flow), Accor distributed an ordinary dividend of €1.18 per share, representing a total amount of €286 million.
LVMH and Accor join forces to take Orient Express to new horizons
On June 13, 2024, LVMH will partner with Accor through a strategic investment in the Orient Express brand, the company operating the future hotels and trains as well as in the entity owning the two sailboats. The first sailboat is currently under construction at Chantiers de l’Atlantique and the two groups are continuing to search for a third partner for this new activity.
By partnering with the revival of this iconic brand, LVMH brings its unique expertise in high-quality products and services, illustrated in particular in the world of travel by the Venice Simplon-Orient-Express train and the five other trains also operated by Belmond around the world. These extraordinary experiences reflect the operational expertise and creativity of LVMH Hospitality Excellence in this field.
Accor and Amadeus announce new collaboration
On June 5, 2024, Amadeus and Accor strengthen their strategic partnership to deploy the Amadeus Central Reservation System (ACRS) across the Group’s entire hotel portfolio. Amadeus’ cloud-based technology will enable Accor, a world leader in hospitality, to increase revenues, optimize distribution strategies and further personalize guest relationships.
Our Habitas integrates Ennismore
On June 20, 2024, Ennismore announced that it is integrating Our Habitas into its global lifestyle brand collective. Our Habitas, a brand that places human connection at the heart of its mission, will bring a new dimension to the Ennismore collective of founder brands. In return, Ennismore will provide access to Our Habitas, a leader in sustainable hospitality, to its operational expertise and international development capabilities.
Post-closing events
Since 2023, the AccorInvest company, accounted for using the equity method in the Group’s consolidated accounts, has initiated a significant asset disposal plan by 2025, aimed at optimizing its financial structure by reducing its debt and improving the profitability of its asset portfolio.
In July 2024, AccorInvest completed the refinancing of its bank debt, extending the maturities due in 2025 by two years and making a partial repayment. In order to facilitate the execution of this refinancing, a capital increase, in the form of preferred shares, was subscribed by the company’s shareholders, including Accor, for €67 million.
In addition, the shareholders have undertaken to subscribe, by March 2025, to an additional issue of preferred shares for a maximum amount equivalent to the first round, the triggering of which depends on the amount of asset sales carried out by AccorInvest.
Further information
The Board of Directors met on July 24, 2024 to review the financial statements as of June 30, 2024. The limited review procedures on the consolidated financial statements were carried out by the statutory auditors. Their limited review report is currently being issued. The consolidated financial statements and accompanying notes related to this press release are available on www.group.accor.com .
About Accor
Accor is a world leader in hospitality offering experiences in more than 110 countries with 5,700 hotels, 10,000 restaurants & bars, wellness and teleworking spaces. The Group deploys one of the most diversified ecosystems in the sector, thanks to more than 45 hotel brands ranging from luxury to economy, including lifestyle with Ennismore. Accor is committed to taking concrete action in terms of ethics and professional integrity, responsible tourism, sustainable development, community commitment, and diversity & inclusion. Founded in 1967, Accor SA, headquartered in France, is listed on Euronext Paris (ISIN code: FR0000120404) and on the OTC market in the United States (code: ACCYY). For more information, visit group.accor.com or follow us on X , Facebook , LinkedIn, Instagram and TikTok .
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