Accor has released its Q3 results showing revenues up nearly 11 percent year over year.
“Accor’s third-quarter performance was solid, validating the quality of its asset-light model in a mixed international environment,” said Chairman/CEO Sébastien Bazin. “The Group once again generated solid revenue growth with steady supply growth and a record-setting pipeline. At the same time, Accor continued to execute its strategy, making progress on the sale of its remaining real estate activities, and on the launch of ALL, the Group’s new distribution platform and loyalty program, in the near future.”
During Q3, Accor opened 60 hotels with 8,500 rooms. At the end of September, the Group's portfolio totaled 726,345 rooms in 4,946 hotels and the pipeline represented 1,181 hotels corresponding to 205,000 rooms. As HM reported last month, the company's construction portfolio has 980 hotel projects with 175,002 rooms underway.
At the end of the quarter, the company officially launched its economy Greet brand, which had soft-opened in Burgundy, France, earlier this year. The next Greet property will open in Darmstadt, Germany. Other upcoming locations include Marseille (St Charles et Aéroport), Lyon Perrache, Paris, St-Witz, Rennes, Bourges and St-Germain-en-Laye. By 2030, Accor hopes to have 300 Greet hotels open across Europe.
Region by Region
Consolidated revenue for the quarter reached €1.049 billion, up 10.9 percent as reported and 4.1 percent on a like-for-like basis compared with third-quarter 2018.
Revenue per available room increased by 0.7 percent, with performances varying by region: Europe was relatively resilient (up 1.2 percent), while Asia-Pacific recorded a slight decline (down 1.1 percent), mainly due to the "environment" in China, according to Accor.
Management and franchise (M&F) revenue increased substantially in Europe (up 4.8 percent like-for-like), buoyed by RevPAR growth of 1.2 percent. This RevPAR performance was driven by pricing, on a very high basis of comparison (RevPAR up 7.1 percent in Q3 2018), the company noted.
In France, RevPAR was up 2.3 percent. According to Accor, this strong performance reflected robust resilience in light of the basis of comparison (RevPAR up 8.3 percent in Q3 2018). Regional cities (up 3.5 percent) outperformed the Paris region (up 0.4 percent), also reflecting the RevPAR growth recorded last year (3.5 percent and 16.5 percent, respectively).
RevPAR growth remained modest (up 0.4 percent) in the U.K., with considerable differences persisting between London and the regional cities. The increase in RevPAR in London (up 1.6 percent) reflected the still-dynamic domestic tourism market, while RevPAR in the regional cities (down 0.9 percent) suffered from political and economic uncertainties related to Brexit, which have "dampened" demand from business travelers, the company said.
RevPAR in Germany decreased 4.6 percent, and was affected by an unfavorable basis of comparison given the absence of certain conventions and sports events, Accor noted. In addition to the particularly unfavorable calendar, attendance was lower at the conventions that did take place.
RevPAR growth in Spain was significant at 9 percent thanks to the strong pick-up in demand following completion of Fairmont and Pullman renovations in Barcelona.
Asia-Pacific posted "brisk" growth in management and franchise revenue of 9.1 percent on a like-for-like basis, despite negative RevPAR in the third quarter (down 1.1 percent). Growth was driven by the development of the network and by the reopening of the Fairmont in Singapore.
At the same time, implications of the trade tensions between China and the United States, along with the unrest in Hong Kong, caused market conditions to worsen in China. The entire region, including Australia, has been affected by this economic slowdown, Accor noted.
The Middle East and Africa region reported a 4.7 percent increase on a like-for-like basis in M&F revenue, in line with modest RevPAR growth of 0.7 percent and the development of the network in the region. Occupancy rates continued to increase thanks the pricing policy. According to STR, Accor’s African portfolio had 24,512 rooms at the end of July and 19,745 rooms in development. In April, Accor announced it was on track to open 35 hotels in Africa by 2020, and had set a target of signing between 15 to 20 projects each year between now and 2025.
South America continued to post significant growth, particularly in Brazil, with revenue up 9.5 percent on a like-for-like basis backed by a 10.2 percent increase in RevPAR, Accor noted.
Based on the RevPAR trends observed in the first nine months of the year, and in particular given the uncertainties looming over Asia-Pacific, the Group forecasts full-year 2019 EBITDA of €820 million to €840 million.