ISSY-LES-MOULINEAUX, France—According to Accor, hotel demand remained strong throughout Q3 2023, with RevPAR up 15 percent compared with the prior year despite a high comparable basis (RevPAR in Q3 2022 was up 14 percent compared with Q3 2019).
The underlying dynamics observed in previous quarters remained constant, with the average price still high and a marked improvement in the occupancy rate, which slightly lags the level of 2019.
All regions and segments contributed through solid operating performances, even if the first signs of normalization of activity growth are materializing after several quarters of intense recovery.
In Q3 2023, Accor opened 73 hotels for around 9,200 rooms and has thus achieved net unit growth of 3 percent over the last 12 months. At the end of September 2023, the group had a hotel portfolio of 812,425 rooms (5,537 hotels) and a pipeline of around 219,000 rooms (1,273 hotels).
For 2023, the Group is confirming its forecast of net unit growth in the network between 2 percent and 3 percent.
Sébastien Bazin, chairman and CEO of Accor, said, “The group’s strong performance during the quarter illustrates once again the strength of business momentum in all of our markets, notably in Asia, and for the brands in our two segments: Premium, Midscale, and Economy, on the one hand, and Luxury and Lifestyle on the other. For Accor, this is the sixth consecutive quarter of growth since the return to post-pandemic business levels. These positive trends and our strict financial and operational discipline enable us, once again, to raise our RevPAR and EBITDA guidance for the year.”
The group reported third-quarter 2023 revenue of €1,286 million, up 13 percent like-for-like versus Q3 2022. This growth breaks down into a 13 percent increase for the Premium, Midscale, and Economy Division and 17 percent for the Luxury & Lifestyle Division. Changes in the scope of consolidation, mainly due to the consolidation of Paris Society in the Luxury & Lifestyle Division (Hotel Assets & Other segment), contributed positively by €85 million. Currency effects had a negative impact of €98 million, stemming mainly from the Australian dollar (down 11 percent), the U.S. dollar (down 7 percent), and the Turkish Lira (down 38 percent).
Premium, Midscale, and Economy Revenue
Premium, Midscale, and Economy—which includes fees from Management & Franchise (M&F), Services to Owners, and Hotel Assets & Other activities of the group’s Premium, Midscale, and Economy brands—generated a revenue of €767 million, up 13 percent like-for-like versus Q3 2022. This increase is in line with the activity recovery over the period.
Management & Franchise (M&F) revenue stood at €225 million, up 17 percent like-for-like versus Q3 2022 and in line with the increase in RevPAR over the period (up 15 percent).
Services to Owners revenue—which includes the Sales, Marketing, Distribution, and Loyalty activities, as well as shared services and the reimbursement of hotel staff costs—came to €279 million in Q3 2023, up 11 percent like-for-like year on year. Reimbursements of hotel personnel costs were lower than in the third quarter of 2022, which included the re-invoicing of costs incurred under the accommodation management agreement for the Football World Cup in Qatar in 2022. Services to Owners revenue excluding the reimbursements of hotel personnel costs grew at a higher pace than RevPAR growth.
Hotel Assets & Other revenue was up 10 percent like-for-like relative to Q3 2022. This segment, closely linked to business in Australia, was impacted by a less favorable base effect owing to the recovery in leisure tourism which materialized earlier than in the rest of the group.
Luxury & Lifestyle Revenue
Luxury & Lifestyle—which includes fees from Management & Franchise (M&F), Services to Owners, and Hotel Assets & Other activities of the Group’s Luxury & Lifestyle brands—generated revenue of €539 million, up 17 percent like-for-like versus Q3 2022.
Management & Franchise (M&F) revenue stood at €108 million, up 11 percent like-for-like versus Q3 2022, driven by RevPAR growth. Based on the current macroeconomic and geopolitical environment, the group has decided to adopt a cautious approach to the recognition of incentive fees for hotels under management contracts.
Services to Owners revenue—which includes the Sales, Marketing, Distribution, and Loyalty activities, as well as shared services and the reimbursement of hotel staff costs—came to €343 million in Q3 2023, up 18 percent like-for-like compared with Q3 2022. The increase in revenue, higher than the RevPAR variation, reflects the greater contribution from distribution channels (notably direct and indirect web channels) on which Accor collects fees.
Hotel Assets & Other revenue was up 20 percent like-for-like relative to Q3 2022. Reported revenue includes a scope effect following the consolidation of Paris Society at end-2022.
Management & Franchise (M&F) Revenue
Management & Franchise (M&F) revenue stood at €334 million, up 15 percent like-for-like versus Q3 2022. This reflects the growth in RevPAR in the different group regions and segments that reached up 15 percent compared with Q3 2022. Potential distortions between M&F revenue and RevPAR reflect mainly the differences in recognition of incentive fees of hotels as part of management contracts in Q3 2023 and Q3 2022.
The Premium, Midscale, and Economy division reported RevPAR up 15 percent compared with Q3 2022, two-thirds driven by prices.
The Europe North Africa (ENA) region posted RevPAR up 9 percent relative to Q3 2022.
In France, which represents 44 percent of the region’s room revenue, business benefited from the increase in international leisure tourists to Paris, offsetting weaker domestic tourist numbers. In September, the rest of France was boosted by the Rugby World Cup more particularly in cities where hotel supply is more limited such as Lille and Nantes.
In the United Kingdom, which represents 13 percent of the region’s room revenue, RevPAR trends were comparable with France thanks to the influx of international tourists which benefited London more than other cities.
In Germany, which accounts for 13 percent of the region’s room revenue, RevPAR saw more moderate growth than in France and the United Kingdom. This market remains particularly dependent on large events, such as trade fairs, shows, and conventions, which did not return to their pre-COVID levels.
The Middle East Africa Asia-Pacific (MEA APAC) region reported a 25 percent increase in RevPAR compared with Q3 2022, benefiting from a considerable rebound in activity in Asia.
Accounting for 22 percent of the region’s room revenue, the Middle East continued to post solid price growth. Occupancy rates improved slightly as they have now returned to pre-COVID levels. The two major religious pilgrimages linked to Ramadan (early in the second quarter) and the Hajj (end of the second quarter) were key drivers of activity in the first half of the year, explaining the more normalized growth in RevPAR in Q3.
The Pacific, which accounts for 27 percent of room revenue for the region, reported relatively moderate growth in domestic customer numbers but benefited from a recovery in international business customers from Asian countries.
South-East Asia, which accounts for 28 percent of the region’s room revenue, reported strong RevPAR growth, notably in Singapore. The return of international business customers to the country enabled a sharp increase in prices.
In China, which represents 23 percent of room revenue for the region, the recovery continued, and RevPAR is now slightly above 2019.
The Americas region, which mainly reflects the performances of Brazil (63 percent of room revenue for the region), began a stabilization phase. Indeed, Brazil exceeded its pre-crisis occupancy rate since the second quarter of 2022 and growth is now driven by prices.
The Luxury & Lifestyle division reported a 14 percent increase in RevPAR compared with Q3 2022, also two-thirds driven by prices.
Luxury, which accounts for 77 percent of the division’s room revenue, posted a 15 percent increase in RevPAR compared with Q3 2022, driven by volumes and prices. The latter are still increasing but approaching a stabilization phase, notably for the Fairmont hotels in North America.
Lifestyle RevPAR increased by 12 percent compared with Q3 2022. This segment had benefited from a faster recovery than Premium, Midscale, and Economy segments after the COVID pandemic, the base effect (i.e. comparison with 2022) is therefore less favorable.
Based on the performance over the first nine months of the year and considering the known-to-date macroeconomic and geopolitical uncertainties, the group raises its guidance for the fiscal year 2023:
- Growth in RevPAR now expected to slightly exceed 20 percent (previously at the top end of the 15-20 percent range);
- Consolidated EBITDA now expected between €955 million and €985 million (previously between €930 million and €970 million).