At the end of 2022’s first quarter, Accor reported improvements across several metrics, with a confirmed goal for net unit growth.
“We’re very happy to report that Q1 continues to show an improved business performance and momentum,” deputy CEO and CFO Jean-Jacques Morin said as he kicked off the earnings call with investors.
Systemwide revenue per available room for the quarter was up 108 percent compared to the same quarter last year, but still down 25 percent compared to Q1 2019. Most regions reported negative RevPAR growth compared to 2019, but the India, Middle East, Africa and Turkey region was up 8 percent over three years ago. Northern Europe was down 38 percent compared to 2019 while Southern Europe was down 21 percent, and the Americas were down 14 percent.
Total revenue for the company reached €701 million for the quarter, up 85 percent like for like compared to Q1 2021.
Morin credited the improvement to three factors: The rebound in both domestic business and leisure travel, the acceleration of international travel (with China a notable expectation, Morin said) and pricing power boosted by pent-up demand. “We've got in our hand a strong pricing power across our region and all segments, and we have today an average room rate which is above the level of Q1 2019 on a like-for-like basis,” he said.
Improving Rates and Unit Growth
That rate growth, in turn, is driven by another three factors: pent-up demand (especially for luxury and lifestyle properties), inflation (“We work in a business where you can pass it to business or leisure individuals,” Morin said) and the progressive improvement of the booking window. “That also leaves us a better capability to yield rates,” he said.
During the first quarter, Accor opened 26 hotels with about 3,700 rooms for net growth of 2.5 percent year over year. At the end of March, the group had a portfolio of 777,849 rooms in 5,304 hotels and a pipeline of about 212,000 rooms in 1,212 hotels.
“After a soft Q1, we will see acceleration starting the next quarter,” Morin said. “And that's why we feel confident to renew our net unit goals guidance at 3.5 percent for 2022.”
Looking ahead, based on current reservation and price increase trends, the Accor team expects RevPAR to keep improving. Domestic demand is expected to return to levels comparable to 2019 by the end of the year, and recovery in international demand is catching up—although Asia may continue to lag.