Accor Hotel Stays Surpass 2019 Levels Even Excluding Chinese Outbound Travel – Skift Travel News | Gmx Pharm

Accor, the Paris-based operator of some 5,300 hotels worldwide, announced on Thursday that second-quarter hotel room stays exceeded pre-pandemic levels for the first time across all regions and brands. The international company has recovered despite the lack of outbound Chinese and Japanese travelers.

“We’ve been missing these Chinese travelers ever since,” Accor chairman and CEO Sébastien Bazin said during a call with investors. “But the enormous American tourism [in Europe] is certainly an indication that our industry is still blessed with two things, the recreation of international travelers and a very, very strong domestic leisure market.”

The group, which operates chains like 25hours, Pullman and Ibis, posted net income of about $32 million (€32 million) on sales of $1.77 billion (€1.73 million) for the first six months of the year Billion euro).

In the second quarter, Accor’s rates rose above 2019 levels in many key markets. In London, the group’s hotel rates rose 14 percent. In Paris, interest rates rose by 11 percent. In Sydney by 7 percent.

Strong pricing helped the company grow its global revenue per available room, a key industry metric, by 1 percent in the quarter from levels it achieved in April-June 2019. Compare that result to a 3 percent improvement over 2019 reported by Hilton on Wednesday.

“The hotel sector is particularly being supported by the excess savings of Western European and US consumers during the pandemic,” Sabrina Blanc, an equity analyst at Societe Generale, wrote in a report. “Our main concern remains the ability of companies to pass inflation on to end customers.”

Inflation has not yet weakened travel demand, Accor executives said.

“We already have the advantage of almost getting through the month of July where we have a very solid performance that was even better than June,” said Bazin. “No worries at this stage in terms of activity, pace, geography and that goes for all brands.”

Business travel typically accounts for “probably 60 percent” of Accor’s business in the third quarter, Bazin said, and he has wondered what demand will be like this year. But he noted that major events such as the German Oktoberfest, the Paris Motor Show and the World Cup in Doha are confirmed.

Accor said its marketing efforts to avoid losing travel bookings to third parties such as online travel agencies worked in the first half. Direct bookings have made up the same percentage of the mix so far this year as they did in 2019. Direct bookings help the company and its partners avoid more commissions to sales agents.

Hotel development continues to advance, with a target of “plus or minus 3.5 percent net room growth” for this year.

“I was with the head of development yesterday and she said we might have an exceptional number for July,” Bazin said. “So it’s really just a question of recovery and opening up countries.”

In the meantime, the company needs to downsize by selling the remaining 7 percent of its network that it directly owns. It also remains focused on increasing per-room fees as a (undisclosed) metric rather than increasing gross volume, Bazin said.

No company split planned immediately, but…

When Accor announced this month that it was reorganizing and splitting its leadership into two entities, speculation arose that it could be preparing for a dissolution.

One of the two business units would be an Economy, Midscale and Premium division for 4,816 hotels representing brands such as ibis, Novotel, Mercure, Swissôtel, Mövenpick and Pullman.

“That’s 90 percent of our hotels,” Bazin said. “That’s 85 percent of the fees, but only two-thirds of the cash flow.”

The other section would be for “Luxury and Lifestyle”. It would receive four branded collections comprising 488 hotels combined: Raffles & Orient Express, Fairmont, Sofitel & MGallery and Ennismore.

“It’s probably about a third of EBITDA [earnings before interest, taxes, depreciation, and amortization]’ Basin said.

Accor executives said there was no immediate plan for a split or major asset sale.

“Regarding a possible split, there is no thinking today,” Bazin said. “What’s in that thinking is getting better, being clearer, being more efficient and probably having an easier relationship with the owners. Because the owners [of the luxury properties] are completely different in many cases [than with the budget and mid-scale properties]with different ambitions, expectations and very different numbers in terms of investments and risky dollars.”

Nonetheless, Bazin managed to hint that one benefit of the restructuring — alongside promised efficiencies and upskilling of the company’s luxury workforce — is that it would give the group more options for a potential demerger in the future.

Bazin said that “what we will be doing for at least 24 months” is to provide common common services such as sales software and information technology from the group as a service to the entities and essentially control them at the headquarters level.

“If one day there was a split, which we’re not considering today, we would have prepared the company to have that option on the balance sheet,” Bazin said.

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