Accor is having a happy, "Emily in Paris" kind of year. High-spending Americans thronged Europe this summer, helping the hotel giant beat expectations for revenue and profit.
The group raised its forecast for growth in revenue per available room, a key industry metric. It guided investors to expect that metric to exceed 20% year-over-year this year. It had earlier in the year guided analysts to expect a 15-20% range for the figure.
The better revenue numbers will translate into greater profitability, the company said.
The group now expects this year to produce core earnings before interest, taxes, depreciation, and amortization of between $1.007 billion (€955 million) and $1.039 billion (€985 million) — up roughly 4% from a July forecasted range of $1.01 billion to $1.05 billion.
“We’re trying to have a balanced view between obviously being on the being within [our previously stated] guidance and taking into account whatever uncertainty there is in the current political environment,” said Martine Gerow, the group’s chief financial officer.
Accor Enjoys Hotel Pricing Power
Accor runs hotels in 110 countries but has a stronghold in Western Europe. There, it benefited this year from better-than-usual bookings from American visitors. The Americans generally had a higher tolerance for robust hotel pricing than European travelers, who have been hit with higher inflation and lower economic growth in Europe. Between July and September, Accor’s revenue per available room rose by 15% year-over-year, ahead of expectations.
At the company’s premium, midscale, and economy properties, the average room rate was up 10% year-over-year, and the occupancy rate was up three points, versus the prior year, at 71%.
Corporate group bookings have been increasing in volume, and their pricing has been increasing in line with inflation, Gerow said.
The hotel operator said it produced revenue of $1.36 billion (€1.29 billion) in the quarter, up 13% year-over-year.
It said it has seen an acceleration in its hotel development pipeline across the group, but more so in its luxury and lifestyle division.
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Photo credit: Lobby of the Pullman London St. Pancras, part of the Accor empire. Source: Accor. Accor