Accor said net unit growth during the next year will be primarily driven by its Luxury & Lifestyle division as it expressed confidence for continued pricing growth in the luxury segment.
The hospitality company stated robust demand in the luxury segment – particularly in the US - shows no sign of slowing down, adding that it anticipates an acceleration in net unit growth propelled by a strong lineup of openings planned for its Luxury & Lifestyle division during the next twelve months.
In Europe and North Africa, the revenue per available room (RevPAR) increased by 20% in the second quarter. France remained strong driven by large inflows of international leisure and business guests in Paris for large events. Accor noted that fortunately, riots which took place in early July didn’t have a significant impact on summer bookings.
In the UK, Accor highlighted a “very balanced performance across London and the provinces”. Turning to Germany, Accor noted a significant improvement in performance for the second quarter of 2023, now exceeding the levels of 2019.
The company is also witnessing a robust recovery in the Meetings, Incentives, Conferences and Exhibitions (MICE) space, which it points out will benefit hotels like Pullman and Fairmont.
Accor added that despite its plans to acquire French event and catering specialist Potel et Chabot in its aim to expand its food and beverage offering - particularly in the lifestyle and the meeting and events segment - it has no plans for further M&A deals.
For the first half of 2023, Accor posted revenue of €2.4 billion, up 25 per cent year-on-year, with revenue for Luxury & Lifestyle division up by 40 per cent to €1.02 billion. For Premium, Midscale & Economy, like-for-like revenue growth was up 34 per cent year-on-year at €1.4 billion. Net profit for the first six months of the year was €248 million. The company raised its full year guidance for EBITDA to €970 million from €930 million.
What they said
Martine Gerow, group chief finance officer of Accor said: “In the luxury segment in the US, we see very sustained demand going into the summer and no sign of slowing down, other than the quarter-over-quarter growth rate, which as we lap over recovery periods, will somewhat soften. We do see an acceleration of net unit growth and that will be primarily driven by the Luxury & Lifestyle. The openings that are planned in in this division, for the next year at least, are very strong."
Why it matters
Accor’s decision to acquire Potel et Chabot and its focus on expanding its food and beverage offering shows the increasing importance of F&B and how brands are using it to woo investors. Revenue growth for Accor’s Luxury & Lifestyle division was 6 percentage points ahead of the Premium, Midscale & Economy brands, underscoring the fact that travelers are seeking more experiential and design-led stays and are willing to pay a premium for that.