The first half of 2024 confirmed Accor’s growth outlook, which was presented at the Capital Markets Day on June 27, 2023, and reiterated in recent earnings and revenue releases. The group’s diversification, both in terms of geographies and segments, plays a role for each of the two divisions.
During the first half of 2024, Accor opened 146 hotels, representing 24,000 rooms—i.e. net unit growth of 4.1 percent—over the last 12 months. At the end of June 2024, the group had a hotel portfolio of 838,722 rooms (5,682 hotels) and a pipeline of 218,000 rooms (1,297 hotels).
Sébastien Bazin, Chairman and CEO of Accor, said, “Once again in this first half-year, Accor posted solid performances, in line with the medium-term outlook we presented to our investors last year. This demonstrates 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 remained strong in all regions and for all our brands, our pace of development accelerated and our leading position in luxury and lifestyle was further strengthened by major partnerships. These performances enable us to raise our RevPAR target for 2024 and to reaffirm our confidence in the group’s strength and ambition.
The coming weeks will also be marked by the Paris 2024 Olympic and Paralympic Games, of which Accor is one of the partners. For this unique event, our teams, who have been mobilized for months, will be putting their expertise, their passion for hospitality, and their generosity at the service of the Athletes’ Village, the Media Village, and all visitors to our hotels, thereby helping to raise the profile of France throughout the world.”
Second Quarter 2024 RevPAR
The Premium, Midscale, and Economy (PM&E) division posted a 4 percent increase in RevPAR compared to the second quarter of 2023, still mostly driven by prices rather than by occupancy rates.
The Europe North Africa (ENA) region posted a 1 percent increase in RevPAR compared to the second quarter of 2023.
In France, which represents 43 percent of the region’s room revenue, RevPAR growth was negative compared to the second quarter of 2023, solely due to the Paris region, while the provinces continued to record positive RevPAR growth. This change was anticipated and mainly reflects a high comparison base (due in particular to the presence of the Paris Air Show in June 2023).
The United Kingdom, representing 13 percent of the region’s room revenue, posted slightly positive RevPAR growth, in line with the first quarter. The provinces slightly outperformed London.
In Germany, representing 14 percent of the region’s room revenue, RevPAR growth was stronger than in France and the United Kingdom, particularly in June thanks to the European Football Championship.
The Middle East, Africa, & Asia-Pacific region posted a 7 percent increase in RevPAR compared to the second quarter of 2023, with a particularly solid performance in the Middle East and Southeast Asia.
The Middle East Africa region, representing 27 percent of the region’s room revenue, continued to post double-digit RevPAR growth, particularly in the United Arab Emirates and Saudi Arabia. This latter country’s performance was boosted by the Hajj religious pilgrimage in June.
Southeast Asia, representing 30 percent of the region’s room revenue, also posted double-digit RevPAR growth. Countries such as Thailand benefited from the gradual recovery of Chinese tourist flows.
The Pacific, representing 25 percent of the region’s room revenue, recorded an improvement in the occupancy rate compared to the second quarter of 2023, but RevPAR growth was negative due to weak leisure demand.
In China, representing 19 percent of the region’s room revenue, RevPAR growth was negative. Tourism has recovered as expected but is not benefiting the domestic market, as Chinese customers are traveling more to Southeast Asian countries.
The Americas region, which mainly reflects the performance of Brazil (64 percent% of the region’s room revenue), recorded RevPAR growth of 12 percent compared to the second quarter of 2023. Brazil benefited from a strong event calendar, particularly in Sao Paulo and Rio de Janeiro.
The Luxury & Lifestyle (L&L) division posted an 8 percent increase in RevPAR compared to the second quarter of 2023, mainly driven by higher occupancy rate.
The Luxury segment, representing 76 percent of the division’s room revenue, posted a 6 percent increase in RevPAR compared to the second quarter of 2023. This performance was driven by all brands. Growth in the occupancy rate was the main factor behind this improvement.
Lifestyle RevPAR increased by 14 percent compared to the second quarter of 2023, driven by prices, particularly at resorts in Turkey, Egypt, and the United Arab Emirates.
Group Revenue
For the first half of 2024, the group recorded revenue of €2,677 million, up 11 percent compared to the first half of 2023. This growth breaks down as a 4 percent increase for the Premium, Midscale, and Economy division and a 22 percent increase for the Luxury & Lifestyle division.
Scope effects, mainly related to the takeover of Potel & Chabot (in October 2023) in the Luxury & Lifestyle division (Hotel Assets & Other segment), contributed by €117 million.
Currency effects had a negative impact of €63 million, mainly related to the Turkish lira (down 39 percent), the Australian dollar (down 4 percent), the Egyptian pound (down 18 percent), and the Argentine peso (down 77 percent).
Premium, Midscale, & Economy Revenue
Premium, Midscale, & Economy, which includes fees from Management & Franchise (M&F), Services to Owners, and Hotel Assets & Other of the group’s premium, midscale, and economy brands, generated revenue of €1,473 million, up 4 percent compared to the first half of 2023. This increase is broadly in line with the level of activity in the first half.
The Management & Franchise (M&F) business posted revenue of €431 million, up 7 percent compared to the first half of 2023 and slightly exceeding RevPAR growth during the period (up 6 percent).
Services to Owners revenue, which includes Sales, Marketing, Distribution, and Loyalty activities, as well as shared services and the reimbursement of hotel costs, amounted to €538 million, up 3 percent compared to the first half of 2023. This increase, which was more moderate than the change in RevPAR, reflects a base effect from the previous year, mentioned in the first quarter revenue release, which included the re-invoicing of costs incurred by Accor in providing supporter reception services during the soccer World Cup in Qatar.
Hotel Assets & Other revenue was up 2 percent compared to the first half of 2023. This segment, which is closely tied to activity in Australia, is affected by the current weakness of leisure demand.
Luxury & Lifestyle Revenue
Luxury & Lifestyle, which includes fees from Management & Franchise (M&F), Services to Owners, and Hotel Assets and Other of the group’s Luxury & Lifestyle brands, generated revenue of €1,243 million, up 22 percent compared to the first half of 2023. This increase reflects the performance of this business, the increase of the fees linked to the residential activity, and a scope effect linked to the takeover of Potel & Chabot.
The Management & Franchise (M&F) business posted revenue of €242 million, up 15 percent compared to the first half of 2023, driven by RevPAR growth (up 7 percent) and the timing of fees related to the residential activity in the Lifestyle segment.
Services to Owners revenue, which includes Sales, Marketing, Distribution, and Loyalty activities, as well as shared services and the reimbursement of hotel costs, amounted to €716 million, up 9 percent compared to the first half of 2023. This increase is linked to business growth in terms of RevPAR and the number of rooms.
Hotel Assets & Other revenue was up 84 percent compared to the first half of 2023. This activity includes a significant scope effect linked to the takeover of Potel & Chabot in October 2023.
The Management & Franchise (M&F) business recorded revenue of €673 million, up 10 percent compared to the first half of 2023. This reflected the increase in RevPAR in the group’s various regions and segments (up +6 percent compared to 2023), amplified by the residential activity in the Lifestyle segment.
Group EBITDA
Group EBITDA amounted to €504 million for the first half of 2024, up 13 percent compared to the first half of 2023. This performance was linked to strong revenue, the operating leverage of the M&F activity, and strict cost discipline in Services to Owners, enabling the group to post positive EBITDA for this part of the business, as expected.
Premium, Midscale, & Economy EBITDA
The Premium, Midscale, & Economy division posted EBITDA of €360 million, up 9 percent compared to the first half of 2023.
The Management & Franchise (M&F) business posted EBITDA of €299 million, up 8 percent compared to the first half of 2023, illustrating the operating leverage expected for this business.
Services to Owners EBITDA amounted to €13 million for the first half of 2024, slightly positive as anticipated in our outlook.
Hotel Assets & Other EBITDA was down 6 percent compared to the first half of 2023. Weak leisure demand in Australia coupled with an unfavorable cost environment explains this decline.
Luxury & Lifestyle EBITDA
The Luxury & Lifestyle division generated EBITDA of €196 million, up 13 percent compared to the first half of 2023.
The Management & Franchise (M&F) business posted EBITDA of €169 million, up 20 percent compared to the first half of 2023, reflecting strong revenue growth amplified by operating leverage.
Services to Owners EBITDA amounted to €4 million in the first half of 2024, also slightly positive.
Hotel Assets & Other EBITDA mainly reflects the acquisition of Potel & Chabot in October 2023.
Net profit, group share, amounted to €253 million for the first half of 2024 compared to €248 million in the first half of 2023.
The improvement to €49 million in the share of net profit of equity investments for the first half of 2024, compared with €9 million in the first half of 2023, is mainly linked to AccorInvest, which benefited from the stabilization of activity in Europe and the recognition of capital gains linked to its ongoing asset disposal plan.
During the first half of 2024, the group’s recurring free cash flow amounted to €120 million compared to €157 million in the first half of 2023. The cash conversion rate was therefore 24 percent.
Interest paid increased between the first half of 2023 and the first half of 2024, impacted by the increase in lease liabilities interest.
Income tax amounted to €105 million in the first half of 2024 compared to €67 million in the first half of 2023, an increase linked to growth and normalization of tax rate post-COVID.
Recurring investments, which include money paid for development as well as digital and IT investments, were 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 guidance presented at the Capital Markets Day on June 27, 2023.
Change in working capital requirement is seasonal by nature, and reflects the good level of business during the first half of the year, with an increase in trade receivables.
Group net financial debt on June 30, 2024, was €2,934 million, compared to €2,074 million on December 31, 2023. The main explanation for this change is the execution of the share buyback program and the payment of the dividend during the first half of 2024.
On June 30, 2024, the group’s average cost of debt stood at 2.6 percent with an average maturity of around 3.5 years.
At the end of June 2024, including the €1 billion undrawn revolving credit line signed in December 2023, Accor had a liquidity position of €1.9 billion.
Outlook for Full-Year 2024
For full-year 2024, Accor is announcing the following guidance:
- RevPAR growth of between 4 percent and 5 percent
- Network unit of between 3 percent and 4 percent
- A positive contribution to EBITDA by Services to Owners
- EBITDA of between €1,095 million and €1,125 million
Medium-term outlook
The group maintains its medium-term outlook as presented at its Capital Markets Day on June 27, 2023:
- Annual RevPAR growth of between 3 percent and 4 percent (CAGR 2023-27)
- Annual network unit growth of between 3 percent and 5 percent (CAGR 2023-27)
- M&F revenue growth of between 6 percent and 10 percent (CAGR 2023-27)
- A positive contribution to EBITDA by Services to Owners
- EBITDA growth of between 9 percent and 12 percent (CAGR 2023-27)
- Recurring free cash flow conversion of more than 55 percent
- A return to shareholders of around €3 billion over the period 2023-2027
Events in First-Half 2024
Sale of Accor Vacation Club
On March 1, 2024, Accor sold to Travel + Leisure its timeshare business in Australia, New Zealand, and Indonesia, Accor Vacation Club, based on an enterprise value of AUD77 million (i.e. €47 million). This agreement also provides for the establishment of an exclusive franchise contract for the future development by Travel + Leisure of new timeshare properties under Accor brands in Asia-Pacific, the Middle East, Africa, and Turkey. This transaction is part of the continuation of the group’s strategy and was finalized at the end of Q1 2024.
Accor and IDeaS enter into a global partnership
On February 28, Accor announced the conclusion of a global revenue management partnership for the Accor portfolio. With the adoption of the suite of IDeaS RMS solutions, Accor continues to update its business strategy for the benefit of its hotels, owners, and managers, providing revenue management tools to drive growth in RevPAR and the group’s Revenue Generation Index (RGI).
Bond issue
On March 4, 2024, Accor placed a €600 million 7-year bond issue with a coupon of 3.875 percent. The deal was more than 4 times oversubscribed, reflecting Accor’s credit quality and investor confidence in its business model, growth potential, and financial structure.
Rikas takeover
On March 8, 2024, Accor, through its subsidiary Ennismore, acquired a 51 percent stake in Rikas Restaurants Management LLC (Rikas), a hospitality company based in Dubai, specializing in managing restaurants and dining establishments.
Share buyback
On April 5, 2024, Accor announced the completion of its €400 million share buyback program announced on February 22, 2024.
An initial €275 million share buyback tranche was executed through a share purchase agreement signed with Jinjiang International on March 11, 2024. The transaction involved 7 million shares at an Accor share price of €39.22.
The remaining amount 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.
On completion of this program, the group acquired 9,923,228 shares at an average price of €40.31. These shares have been canceled.
Dividends
On June 7, 2024, based on the 2023 results and the dividend distribution policy implemented since 2019 (based on the distribution of 50 percent of recurring free cash flow), Accor paid out an ordinary dividend of €1.18 per share, representing a total amount of €286 million.
LVMH and Accor join forces to lead Orient Express
On June 13, 2024, LVMH joined forces with Accor through an investment in the Orient Express brand, the company that will operate the future hotels and trains, as well as in the entity that owns the two sailboats. The first sailboat is currently under construction at Chantiers de l’Atlantique and the two groups seek a third partner for this new activity.
Accor and Amadeus announce a new collaboration
On June 5, 2024, Amadeus and Accor strengthened their partnership to deploy the Amadeus central reservation system (ACRS) across the group’s entire hotel portfolio.
Our Habitas integrates Ennismore
On June 20, 2024, Ennismore announced the addition of Our Habitas to its global collective of lifestyle brands. Our Habitas, a brand whose mission is to create human connection, will bring dimension to the Ennismore collective of founder-built brands. In return, Ennismore will give Our Habitas access to its operational expertise and international development capabilities.
Subsequent events
Since 2023, AccorInvest, which is accounted for under the equity method in the group’s consolidated statements, has initiated an 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 finalized the refinancing of its bank borrowings, extending by two years the maturities due in 2025, along with a partial reimbursement. To facilitate the execution of this refinancing, a capital increase in the form of preferred shares was subscribed to by the company’s shareholders, including Accor for €67 million.
Furthermore, the shareholders are committed to subscribe, by March 2025, to an additional issuance of preferred shares for a maximum amount equivalent to the first issuance, and a function of the amount of asset disposal plan completed by AccorInvest.
