Accor: Group Revenue Performance in Q1 2024

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Published on 26/04/24 - Updated on 26/04/24

Finance

During the first quarter of 2024, the Accor Group demonstrated notable strength in its revenue growth and operational performance across various regions and segments.

"In this first quarter, marked by the Group's return in CAC 40, Accor once again delivered a solid performance, increasing revenue in all regions, notably in the Middle East and Asia-Pacific. Our network growth also accelerated, reflecting the attractiveness of our brands and the trust of our owners. By continuing to combine high standards with operational flexibility, quality of execution and financial discipline, we are confident in our ability to pursue a growth path that is in line with the objectives we have set for ourselves." -  Sébastien Bazin, Chairman and CEO of Accor

Revenue Growth and Portfolio Expansion

Accor reported a revenue of €1,236 million for the first quarter of 2024, reflecting a substantial 8% increase on a like-for-like basis compared to the same period in 2023. This growth underscores the sustained demand for hotel services within the Accor network.

In terms of portfolio expansion, Accor added 53 new hotels, comprising over 8,000 rooms during the quarter. This expansion contributed to a net unit growth of 3.1% over the last 12 months, further solidifying Accor's position in the hospitality industry. As of March 2024, the group boasted a hotel network of 825,313 rooms across 5,613 hotels, with a pipeline of 224,000 rooms in development.

Regional Performance

Premium, Midscale & Economy Division
The division witnessed an 8% increase in Revenue per Available Room (RevPAR) compared to the first quarter of 2023, primarily driven by rate increases. The Europe North Africa (ENA) region recorded a 5% increase in RevPAR, with notable growth observed in France, the United Kingdom, and Germany. 

- Within France, constituting 44% of the region’s room revenue, both the Paris region and provincial areas experienced similar growth in RevPAR.
- The United Kingdom, contributing 13% of the region’s room revenue, saw RevPAR growth on par with France, with London and provincial areas showing a balanced performance.
- Germany, accounting for 13% of the region’s room revenue, exhibited stronger RevPAR growth compared to France and the UK. This improvement reflects a consistent upward trend, benefitting from a more favorable baseline effect due to the delayed recovery of activity in the country compared to the rest of Europe.

In the Middle East, Africa, and Asia-Pacific region, RevPAR surged by 12%, supported by solid growth in regions like South-East Asia and the Middle East.
•    The Middle East Africa region, constituting 26% of room revenue in the overall region, maintained its RevPAR growth trajectory.
•    South-East Asia, contributing 30% of room revenue in the region, also witnessed notable RevPAR growth, particularly driven by Singapore and Thailand.
•    The Pacific, representing 27% of room revenue in the region, sustained the momentum observed in the fourth quarter of 2023, with RevPAR growth primarily propelled by increased occupancy rates.
•    In China, accounting for 18% of hotel room revenue in the region, business continued its recovery, albeit at a gradual pace.

The Americas region, largely influenced by Brazil (constituting 65% of room revenue for the region), experienced a 4% uptick in RevPAR compared to the first quarter of 2023. 

Luxury & Lifestyle Division

Accor's Luxury & Lifestyle division saw a 7% increase in RevPAR compared to the first quarter of 2023, fueled by higher occupancy rates. The Luxury segment reported a 6% increase in RevPAR, while the Lifestyle segment recorded a solid 10% growth, driven by improved occupancy at resorts in select destinations.

Revenue Breakdown

Premium, Midscale & Economy
The Premium, Midscale & Economy segment, encompassing revenue from Management & Franchise (M&F), Services to Owner, and Hotel Assets & Other of the Group's brands within this category, yielded €690 million in revenue. This marked a 6% increase on a like-for-like (LFL) basis compared to the first quarter of 2023.

•    Management & Franchise (M&F) revenue: €192 million, up 14% compared to Q1 2023, reflecting strong growth in incentive fees, particularly in the Asia-Pacific region.
•    Services to Owners revenue: €252 million, down 1% compared to Q1 2023, influenced by base effect due to rebilling of costs incurred during the soccer World Cup in Qatar.
•    Hotel Assets and Other revenue: Up 9% compared to Q1 2023, indicating the level of activity in regions like Australia and Brazil.

Luxury & Lifestyle

The Luxury & Lifestyle segment, encompassing revenues from Management & Franchise (M&F), Services to Owners, and Hotel Assets & Other under the Group's Luxury & Lifestyle brands, saw a revenue surge of €566 million, marking a 12% increase compared to the first quarter of 2023.

•    Management & Franchise (M&F) revenue: €102 million, up 11% compared to Q1 2023, driven by RevPAR growth and incentive fees from management contracts.
•    Services to Owners revenue: €347 million, up 12% compared to Q1 2023, reflecting strong growth in sales, marketing, distribution, and loyalty activities.
•    Hotel Assets and Other revenue: Up 13% compared to Q1 2023, bolstered by new venue openings and significant scope effects.

Outlook and Future Prospects

Accor reiterated its medium-term growth perspectives, focusing on annualized RevPAR growth, net unit growth, revenue growth, and EBITDA growth. The group remains committed to returning value to shareholders, as evidenced by its completion of a €400 million share buyback program in the first quarter of 2024.

Notable Events

•    Disposal of Accor Vacation Club: Accor sold its timeshare business in Australia, New Zealand, and Indonesia, aligning with its asset-light strategy.
•    Bond issue: Accor successfully placed a €600 million 7-year bond, enhancing its financial structure.
•    Share buyback: Accor completed a €400 million share buyback program, signaling confidence in its business model and growth potential.


Accor's Annual Shareholders' Meeting scheduled for May 31 is poised to provide further insights into the group's strategic initiatives and future trajectory.
 

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