Accor`s consolidated revenues rose 5.6% to EUR 1,676 million in the first three months…
Accor`s consolidated revenues rose 5.6% to EUR 1,676 million in the first three months of 2005.
|
(In EUR millions) |
2004 reported |
2004 |
2005 IFRS |
% Change |
% Change |
|
1,125 |
1,109 |
1,127 |
+1.6% |
+2.0% |
|
|
Services |
121 |
123 |
140 |
+13.2% |
+11.8% |
|
Other businesses |
352 |
354 |
409 |
+15.6% |
+6.6% |
|
Total |
1,598 |
1,586 |
1,676 |
+5.6% |
+3.8% |
Figures for 2005 have been prepared in accordance with IAS/IFRS. Prior-year comparatives have been restated according to the same standards, with the result that 2004 revenues are EUR11.8 million lower than originally reported under French GAAP. The 5.6% increase in first-quarter 2005 revenues is based on comparable accounting standards.
Revenues were up by 3.8% on a like-for-like basis, i.e. at constant scope of consolidation and exchange rates.
First-quarter performance was shaped by two non-recurring factors:
- February included one less day than in 2004, which reduced revenues for the period by 1.1%
- In most European countries (but not France), the Easter holidays fell in March rather than in April, as they did in 2004. This trimmed 0.5% off first-quarter revenues
Excluding these two unusual factors, first-quarter revenues would have been up 5.4% like-for-like.
Despite these two factors that tend to obscure the Company`s true performance, business was generally good in the first quarter, especially in the Economy Hotel segment with like-for-like revenues up 3.5% for operations outside of the U.S and revenues up 4.5% in the U.S. The Services business enjoyed remarkable 11.8% growth in revenues. Only the Upscale and Midscale Hotels segment reported marginal growth, of 0.5%.
Upscale and Midscale Hotels
Like-for-like revenues in the Upscale and Midscale segment rose by a modest 0.5%, although the situation varied from one market to another. Revenues were up 8% in the United States, lifted by the increase in average room rates as the upturn in the hotel cycle gained momentum. However, revenues edged back 0.5% in France, in a sluggish economy, and were down 2.7% in the rest of Europe, where the change in the Easter vacation calendar reduced revenues for the period by 3.1%. Note that the one-time calendar effect was offset in the first two weeks of April. Eliminating the impact of Easter vacations and the one less day in February, Upscale and Midscale Hotel revenues in Europe would have been up 1%.
In response, Accor is focusing on more efficiently managing average room rates, successfully raising them in France, for example, by 4% during the quarter.
Economy Hotels
Like-for-like revenues from Economy Hotels rose a strong 3.5% during the quarter, including 4.1% for France. The increase was led by the improvement in average room rates, which rose by 2.8% for the period.
The expansion strategy pursued in Europe, where 24 hotels have opened under the Ibis, Etap Hotel and Formule 1 brands over the past 12 months, helped to drive a 6.7% increase in reported revenues for the segment.
Economy Hotels in the United States
The improvement noted in fourth-quarter 2004 carried over into 2005, as first-quarter revenues rose by 4.5%, including 5.1% for Motel 6 and 3.2% for Red Roof Inn. Revenues per available room (RevPAR) was up by 6.1%, with gains of 6.3% for Motel 6 and of 5.5% for Red Roof Inn. The Red Roof Inn figure includes rooms closed for renovation; when these are excluded, the increase in RevPAR was 7.7%. To date, 74 Red Roof Inn properties have been renovated and RevPAR from those units was up by more than 10%.
Services
Services enjoyed particularly strong demand in first-quarter 2005, with like-for-like revenues increasing by 11.8%. Growth were generally solid across the board, with a 7.6% gain in Europe, led by the development of new products, and a 20.3% surge in Latin America, thanks to an excellent economy.
Recent acquisitions, notably Capital Incentive in the UK and Hungastro in Romania, added 2% to revenue growth.
In all, reported revenues in the Services division were up 13.2% for the quarter.
Travel Agencies
Consolidation of Protravel in France and Maritz in the United States drove a 23.6% increase in travel agency revenues for the period. Like-for-like growth was 8.1%.
Casinos
The major event in the Casinos business was the creation in December 2004 of Groupe Lucien Barriere SAS, which combines the assets of Accor Casinos and Groupe Lucien Barriere. The new company operates 37 casinos and 13 hotels, with full-year revenues of roughly EUR1 billion.
Accor`s 30.19% interest in Groupe Lucien Barriere has been proportionally consolidated as from January 1, 2005.
On this basis, first-quarter revenues from the Casinos business totaled EUR76 million, an increase of 42.7% as reported and of 3.9% like-for-like.
Conclusion
The first quarter of 2005 has confirmed the very positive revenue trends in most of our business portfolio:
- Economy Hotels outside of the U.S. up 3.5%
- Economy Hotels in the United States up 4.5%
- Services up 11.8%
- Other businesses up 6.6%
Growth in the Upscale and Midscale Hotels segment was still modest in the first quarter, but April revenues benefit from the change in the Easter vacation calendar. For the full year, Accor is focusing on optimizing average room rate management in the segment.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
