Accor Cites Strength in India and Business Travel, Dials Back Olympics Forecast

Accor reported strong results for the first half of the year Thursday, and pointed to promising bookings trends for the second half.

“We’re not worried about the pace of demand and the volume of demand across the globe,” said Sébastien Bazin, Accor’s Chairman and CEO.

The Paris-based operator of 5,682 hotels worldwide said it expected to see very good momentum in the Middle East, the U.S., and Southeast Asia.

The group modestly upgraded its forecast for full-year revenue per available room growth to between 4% and 5%.

Robust bookings, pricing power

The upbeat comments from the hotel group’s executives came Thursday after some airlines recently reported a softening in their airfares and profits in some markets.

The upbeat predictions followed a strong first half, during which Accor saw revenue-per-available room (RevPAR) growth of 6%.

“Ryanair’s second quarter stipulated that they had a drop in pricing of about 15%, but they had an increase in volume by about 10%,” Bazin said, noting that there was no slowdown in demand with Europe’s largest carrier by passenger volume.

“There’s no slowdown in demand in many of the airlines in the world and certainly not in India … or Qatar,” he said.

“If customers do end up paying less for the [air] travel, they may pay more for the hotels and for the food and beverage and entertainment,” Bazin said. “So [the trend in weakening airfares] may be actually going our way in terms of the mix of spending for the same customer.”

Looking to 2025, Bazin referenced Oxford Economics projections and interpreted the data to say that Europe may draw 80 million more visitors in 2025 than this year.

“That would be huge in terms of RevPAR impact,” Bazin said.

Accor first-half highlights

• The hotel group saw robust room pricing while controlling costs. It generated about $546 million (€504 million) in EBITDA, a company record—up 13% year over year.

• Accor’s net unit growth was 4.1% over the last 12 months. The company set its net unit growth guidance for the full year between 3% and 4%, reflecting a robust acceleration from the previous year’s 2.4%.

Paris Olympics impact

Nine months ago, Accor projected that the added demand from France for hosting the Paris Olympics would add about two percentage points of revenue per available room in France and about 0.5% for the group. Executives backed away from those forecasts on Thursday, echoing other reports about weaker-than-expected tourism to France in August generally.

“While the event itself is expected to be strong, there are uncertainties about pre- and post-Olympic periods,” Bazin said. Accor is the accommodation host for athletes during the event.

Business travel strength

Accor reported continued pricing strength, particularly in corporate bookings.

“For the last 12 months, every renegotiation that’s been happening with existing customers has been going upward [in rate] to an extent of 4% to 6%, depending on who the customer is and the size of the customer,” Bazin said.

India’s outbound travel boom

Bazin cited estimates that about 40 million Indian people will travel abroad this year, with most going to Southeast Asia and the Middle East. He believes that number will double over the next two years.

“That would be a huge pick up with a huge effect on the Middle East hotels of Accor and when it comes to [our properties in] Laos, Vietnam, Cambodia, Malaysia, and Jakarta,” Bazin said.

Possible sale of AccorInvest

Accor has a roughly 30% stake in AccorInvest, a hotel owner and operator of over 700 hotels. AccorInvest wants to sell more than $2 billion of hotels in Europe and Latin America and to reduce its more than $4 billion of debt.

“We need AccorInvest to be back on its feet in terms of performance,” Bazin said. “The level of debt is too high, and that’s why they’re conducting the asset sale program, which, by the way, not only gives proceeds back to AccorInvest, but it also enhances the margin and profitability because what they do sell is of a lesser quality than what they keep.”

Executives hope to find a third party to buy Accor’s stake in AccorInvest between the second half of 2025 and the fall of 2026, Bazin said. They would also be open to an investment firm buying all of AccorInvest.

Adding the Habitas brand

In June, Ennismore, the fast-growing lifestyle hospitality company that’s an Accor joint venture, entered into a strategic partnership to run and market the experiential luxury hotel brand Our Habitas as part of its family of brands.

Accor executives described how the deal came about. Habitas’s shareholders and management called Ennismore because they wanted to find the right partner to help them scale and reduce corporate costs.

Bazin said that Ennismore will give tiny Habitas the benefit of Accor’s marketing machine and cost advantages in global distribution.

“[Habitas] is in a segment that is extremely interesting,” Bazin said, claiming that no other international group has a presence in running and marketing small luxury leisure resorts.

Accor is frustrated with investors

Accor’s management bemoaned that the company’s share price hasn’t risen since it reorganized by splitting its luxury and lifestyle groups into a separate unit from its premium, midscale, and economy hotels in an attempt to reveal to shareholders how it has high fee growth in both categories.

“We are acutely aware that the value of our assets is not today properly reflected in the share price valuation of this company,” Bazin said. “We haven’t had the benefit of any re-rating.”

Bazin said Accor’s board of directors will assess the data from four quarters of performance under the reorganized structure at year-end.

Possible Accor break-up?

“Are we properly valued in terms of pieces, and what is it that the company should be thinking of doing or not doing probably in the 12 to 18 months between ’25 and Summer ’26?” Bazin said.

Some investment banking analysts have speculated that Accor may break itself into two parts.

But less dramatic options could include better communication with investors of the company’s value proposition, further improvements in the company’s financial performance, and a merger with another company to increase its market power (Jin Jiang, the Chinese conglomerate that owns a roughly 10% stake in Accor, is often suggested as a potential partner).

Bazin didn’t foresee Accor buying back any of its shares to boost the company’s price this year but said the board might approve a plan for share buybacks next year.

For now, Accor executives hope that the company will continue to deliver on its forecasted performance for the year and investors will bid up the stock’s value.

“The pace of demand is being confirmed every day passing, again, from different origins, but it is there globally, so which is why we feel strong on meeting objectives for between now and 2027,” Bazin said.

Accor’s stock price was down 1.5% after the earnings report.

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