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Accor is like an industry barometer, given its 5,304 hotels spanning the globe and across service types. Its numbers suggest the sector is broadly on track for recovery by year-end, with some exceptions such as China.
Accor, the Paris-based hotel operator of 5,304 hotels worldwide, said on Thursday it expected demand for bookings to return to pre-pandemic levels by the end of the year. Room prices in the last four months have already surpassed 2019 levels outside of Asia Pacific.
“We have today an average room rate which is above the level of first-quarter 2019 on a like-for-like basis,” said Jean-Jacques Morin, deputy CEO and chief financial officer.
Strength in hotel pricing is being supported by pent-up demand, especially for luxury and boutique properties. Travelers are also making more bookings in advance, which gives the group visibility into supply and demand trends to price more optimally, executives said.
The group — whose brands include Sofitel, Pullman, and Ibis — reported an upswing in people traveling domestically for leisure and business. Business travel accounts for 60 percent of its guest mix, on average. While the group has also seen international travel ramp up, it said China’s pandemic travel restrictions have held back a global recovery in international bookings.
The strong pricing has enabled Accor to manage inflation without alarm.
“There is inflation in this world, as we all know,” Morin said. “But we are in a business where you can pass it through to business or leisure individuals.”
In the first quarter, the group generated $737.1 million (€701 million) in revenue. That was up 85 percent year-over-year — but still 23 percent below the comparable period in 2019.
Revenue per available room and occupancy rates — two key industry metrics — improved but stayed below 2019 levels. Revenue per available room more than doubled year-over-year but remained down by a quarter compared with pre-pandemic heights.
The group said it had gained some operational efficiency, mainly from the integration of the companies making up the recently acquired Ennismore group.
The Ukraine war hasn’t had a significant impact, executives said.
Today, the group’s room count is 212,000, more or less at the level of the end of last year. During the first quarter, the group opened 22 hotels. It plans to grow its network of properties by 3.5 percent over the fiscal year.
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Tags: accor, earnings, future of lodging, hotels
Photo credit: Lobby of the Pullman London St. Pancras, part of the Accor empire. Source: Accor. Accor