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Very strong rebound of the activity with Q2 above 2019 level for Accor Group


Q2 REVPAR above 2019 level, significant improvement in profitability and cash flow generation.

The Accor Group’s business rebounded significantly in H1 2022 after two years of major pandemic-related disruptions in the tourism and hospitality industry. In Q2 2022, activity recovered to levels close to, if not above, the 2019 levels in almost all of our geographies. The only laggards were China, which is impacted by travel restrictions as part of its strict enforcement of a “zero-Covid” policy, and South East Asia, which is highly dependent on Chinese visitors.

This rebound reflects both the recovery of the number of business and leisure domestic guests, and border reopenings which accelerated the return of international travelers. It was accompanied by a sharp increase in prices, driven by demand and emphasized by inflation.

During first-half 2022, Accor opened 85 hotels, representing 11,700 rooms, i.e., net system growth of 1.8% in the last 12 months. At end-June 2022, the Group had a hotel portfolio of 777,945 rooms (5,300 hotels) and a pipeline of 212,000 rooms (1,215 hotels).

Sébastien Bazin, Chairman and Chief Executive Officer of Accor, said: “Once again this quarter, Accor reported a very strong growth in business, exceeding pre-crisis levels for the first time. This marked rebound in all regions and for all of our brands. The summer will confirm these trends and the fall promises to be strong with the recovery of major seminars and conventions. Nevertheless, the Group remains attentive to the evolution of the geopolitical and economic environment. At this stage, the Group should report a strong growth in EBITDA, with a target of more than €550 million for the full-year 2022”. 

For 2022, the Group is confirming its forecast of net unit growth in the network of around 3.5%.

Consolidated revenue
The Group reported H1 2022 revenue of 1,725 million euros, up 97% like-for-like compared with H1 2021. By activity, this growth breaks down into a 119% increase for HotelServices and 57% for Hotel Assets & Other. To provide a comparison with RevPAR (change presented versus 2019 throughout this release), the like-for-like decline in revenue versus H1 2019 is 10%. Changes in the consolidation scope, mainly due to the consolidation of Ennismore, and the reopening of Pullman Montparnasse contributed positively by 31 million euros.

Currency effects had a positive impact of 69 million euros, mainly due to the US dollar ((9)%).

HotelServices revenue
HotelServices, which includes fees from Management & Franchise (M&F) and Services to Owners, reported 1,276 million euros in revenue, up 119% like-for-like versus H1 2021 (down 12% like-for-like versus H1 2019). This increase reflects the significant recovery seen in the first half of the year.

Revenue in Management & Franchise (M&F) stood at 434 million euros, up 153% like-for-like versus H1 2021 (down 15% like-for-like versus H1 2019), with regional performances correlated to the business recovery in the considered countries. In general, the slightly sharper decline in M&F revenue compared with RevPAR (down 11% in H1 2022 versus H1 2019) can be attributed to the decrease in incentive fees based on the hotel operating margin generated from management contracts.

Consolidated RevPAR was down 11% overall in H1 2022 versus H1 2019 and up 1% in Q2 2022 versus Q2 2019. These figures reflect a month-after-month sequential improvement in business with a sharp increase in prices, driven by demand and emphasized by inflation. Therefore, activity reached levels close to, or even higher than 2019 levels in almost all of our regions in the second quarter.

In Q2 2022, RevPAR in South Europe was 2% above the Q2 2019 level.

  • In France, Q2 2022 RevPAR was 3% above the Q2 2019 level. The recovery of international travelers helped Paris to close the gap with province, both now above 2019 level in Q2. Prices were higher than those of the same period in 2019, with a favorable combination of public events in May (UEFA Champions League Final, Roland-Garros Tournament...).
  • In Spain, RevPAR was up 2% in Q2 2022 versus Q2 2019.

In Q2 2022, RevPAR in North Europe was down 7% versus Q2 2019, but business improved sequentially month after month.

  • In the United Kingdom, the strength of the recovery was comparable to that seen in France. Both London and the province recovered to RevPAR levels above those of Q2 2019.
  • In Germany, which took longer to lift its health restrictions related to the Covid crisis, business recovered at a slower pace. Nevertheless, in June, the country’s RevPAR performance came close to the levels recorded in neighboring countries.

RevPAR continued to improve sequentially in Asia-Pacific (+25 percentage points between Q1 2022 and Q2 2022). It was down 18% in Q2 2022 versus Q2 2019.

  • Pacific confirmed the recovery already seen in Q1 2022 and ended the second quarter up 9% versus Q2 2019. The reopening of internal and external borders since the end of 2021 accelerated this recovery.
  • China saw a slight month-after-month pick-up in business in Q2 2022. However, the restrictions implemented as part of the strict enforcement of its “zero-Covid” policy adversely affected its performance and resulted in a 38% decline in RevPAR versus Q2 2019.
  • In South East Asia, RevPAR was down 31% in Q2 2022 versus Q2 2019. Although the main travel restrictions have been lifted, the region’s dependence on Chinese visitors had an adverse impact on the recovery speed.
  • In the India, Middle East, Africa & Turkey region, the rebound in RevPAR, which exceeded 2019 level (+32% in Q2 2022), was confirmed for a third consecutive quarter.
  • The United Arab Emirates continued to outperform after a strong Q1 boosted by the world Expo 2020.
  • In Saudi Arabia, the broader reopening of the holy cities for pilgrimages has led to a sharp rebound in activity, particularly during April Ramadan period. This recovery is also expected to continue with the Hajj in July.
  • In the Americas, Q2 2022 RevPAR was 5% higher than in Q2 2019.
  • In North/Central America and the Caribbean, RevPAR was in line with 2019 levels in Q2 2022, driven by a sharp increase in prices.
  • In South America, and particularly Brazil, the pick-up in business volumes was notably impressive, with occupancy rates above the 2019 level throughout Q2 2022.

Services to Owners revenue, which includes the Sales, Marketing, Distribution and Loyalty division, as well as shared services and the reimbursement of hotel staff costs, came to 842 million euros in H1 2022, down 10% compared with 2019, in line with consolidated RevPAR for the period.

Hotel Assets & Other revenue
At end-June 2022, this segment, which includes owned and leased hotels, represented 114 hotels and 22,417 rooms.

Revenue in the “Hotel Assets & Other” segment was up 57% like-for-like in H1 2022 versus H1 2021 and down 8% like-for-like versus H1 2019. This segment, which is closely tied to activity in Australia, benefited in particular from renewed leisure and business tourism demand.

Since early 2021, this segment has included concierge services, luxury home rentals, private sales of hotel stays and digital services for hotel owners. All these activities benefited from the uptrend in tourism.

Positive EBITDA
Consolidated EBITDA was 205 million euros in H1 2022, versus (120) million euros in H1 2021. This performance was linked to the activity recovery. In the first half, immediate marketing actions were activated to capture and convert this rebound. On top, we are faced with an unexpected cost inflation, which structurally affects our cost base. The RESET cost saving plan, that is being delivered per plan, is helping to offset all the above.

HotelServices EBITDA by business
HotelServices EBITDA was positive at €208 million in H1 2022. This performance breaks down as positive EBITDA for Management & Franchise (M&F) and a negative contribution from Services to Owners. This negative contribution reflects both marketing expenses incurred to capture the pick-up in business and general cost inflation. Rebilling of hotel costs (with revenue at €497 million), included in Services to Owners, structurally remains at breakeven at the EBITDA level.

The Management & Franchise division of HotelServices reported an EBITDA of 297 million euros in H1 2022, significantly higher than in H1 2021 (at 55 million euros) but still below H1 2019 ((19)% like-for-like). All regions are now generating positive EBITDA.

Hotel Assets & Other EBITDA
Hotel Assets & Other EBITDA came to 58 million euros in H1 2022 versus 25 million euros in H1 2021. This segment is mainly driven by Australia, where the activity has recovered. New Businesses, included in this segment since early 2021, reported positive EBITDA in the first half of the year.

Net profit, Group share was 32 million euros in H1 2022, compared with 67 million euros in H1 2021.

The Share of net profit of associates & JVs came to (27) million euros in H1 2022, stemming very largely from AccorInvest’s contribution, which was much more limited than in H1 2021. AccorInvest’s results improved significantly due to the business pick-up in Europe.

Non-recurring items in H1 2021 mainly included a 649 million euros positive impact recognized following the partial sale of a 1.5% stake owned in Huazhu in February 2021.

During H1 2022, the Group’s recurring free cash flow improved significantly, from (260) million euros in H1 2021 to 41 million euros in H1 2022.

Cost of net debt was stable between H1 2021 and H1 2022, demonstrating the quality of our financing policy.

The Group’s recurring expenditure, which includes “key money” paid by HotelServices for its development, digital and IT investments, remained under control to end the period at 55 million euros.

Change in working capital is seasonal in nature and reflects the activity recovery reported in H1 2022.

The Group’s net financial debt as of end-June 2022 reached 2,025 million euros, versus 1,844 million euros as of December 31, 2021. This slight increase is related to the finalization of the restructuring plan and some investments including in Reef, a US dark kitchen operator.

On June 30, 2022, the average cost of Accor’s debt was 1.9% (a decrease due to the redemption of bonds that had a higher coupon) with an average maturity of about 4 years and with no major repayments due before 2026.

As of end-June 2022, combined with the undrawn credit facilities of 1.2 billion euros, Accor had a liquidity position of 2.5 billion euros. The 560 million euros line, negotiated in May 2020, matured in May 2022.

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