The French hotel giant has reported solid financial results for the first half of 2024, with net profit of €253 million and sales of €2.68 billion. This performance exceeded analysts’ expectations, confirming the resilience and solidity of Accor’s business model.
French hotel giant Accor reported solid financial results for the first half of 2024 on July 25.
Net profit amounted to 253 million euros, slightly higher than the 248 million euros recorded for the same period in 2023. Group sales reached 2.68 billion euros, up 11% on the previous year.
This performance exceeded analysts’ expectations, confirming the resilience and solidity of Accor’s business model.
The sector’s leading indicator, revenue per available room (RevPAR), was up 6% year-on-year. This growth has enabled Accor to raise its annual RevPAR target. The increase was particularly marked in the Luxury & Lifestyle division, where RevPAR rose by 8% in the second quarter, mainly thanks to higher occupancy rates.
Accor CEO Sébastien Bazin emphasized the robustness of the Group’s margins, with EBITDA up 13% to €504 million. “We’re very pleased. At 504 million euros, our half-year EBITDA has never been higher. Our margins are growing faster than our sales, confirming the robustness of our business model,” he said.
Divisional performance
The Luxury & Lifestyle division performed particularly well, with sales up 22% to €1.243 billion. The group, which owns brands such as Ibis, Sofitel, Novotel, Mercure and Pullman, benefited in particular from the acquisition of caterer Potel et Chabot in October 2023 for 117 million euros.
The Premium, Mid-range and Economy divisions also contributed to growth, posting a 4% increase to a total of 1.473 billion euros.
“Organizing the Group around two divisions (Luxury and Lifestyle on the one hand, Economy, Midscale and Premium on the other) allows us to be more efficient and agile, giving more responsibility to the teams on the ground,” says Sébastien Bazin.
This distribution enables Accor to diversify its risks and capitalize on the boom in travel in high-growth regions. While business in Germany saw “double-digit growth” thanks to the Euro soccer tournament, that in France recorded a negative year-on-year variation, due to the Paris region, which had benefited from the Paris Air Show the previous year.
In China, business was also negative: “the upturn in tourism has taken place as expected, but it is not benefiting the domestic market, as Chinese customers are travelling more to South-East Asian countries”, explained Group CFO Martine Gerow on a conference call.
Geographic expansion
Accor continues to expand its portfolio with the opening of 146 new hotels, representing 24,000 rooms, in the first half of 2024. The global network now reaches 5,682 hotels (838,722 rooms) and a pipeline of 1,297 hotels (218,000 rooms).
This expansion represents net network growth of 4.1% over the last twelve months.
In addition, the group, which is also a premium partner of the Paris Olympic Games, reported “strong growth in bookings, with occupancy rates of over 80%, which is in line with our expectations”, added the CFO.
Good outlook
Accor is maintaining its annual targets, while raising its RevPAR forecasts. The group is now targeting RevPAR growth of 4% to 5% for 2024, compared with a previous estimate of 3% to 4%, underpinned by robust demand across all regions and brands.
“Tourism depends on global demographics, air traffic and the middle classes. But all are growing,” explained Sébastien Bazin, adding that demand remains strong despite fare adjustments. In ten years, 1.3 billion more people have been able to afford to travel. There will be another 1.3 billion by 2034, mainly thanks to India.
Annual EBITDA is forecast at between €1.095 billion and €1.125 billion, confirming the Group’s positive momentum. Accor also expects to convert EBITDA into recurring free cash flow in excess of 55%, demonstrating its efficient and disciplined management.
The Accor hotel group’s first-half results testify to the strength of its business model and its ability to adapt to market trends. With its robust financial performance and promising outlook, Accor continues to strengthen its leadership position in the global hotel industry.
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Featured photo : © Accor
