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Accor raises outlook after strong post-pandemic growth

Photography, Helmet, Adult Murray-Pietsch
Hotel demand remained strong between July and September, with revenue per available room jumping by 15% year on year in Q3 2023
  • Revpar up 15% compared to 2022
  • Third-quarter revenue hits $1.36bn
  • ‘No impact’ from Palestine conflict

Europe’s biggest hotel group, Accor, raised its core profit target for 2023 on Thursday for the second time this year, citing positive business momentum in all of its markets after another strong post-pandemic summer.

The sector continues to benefit from a leisure travel boom, despite inflation and the resurgence of recession fears in Europe.

Accor, whose brands include Ibis and Novotel, said in a statement that hotel demand remained strong between July and September, with revenue per available room (revpar), a key industry gauge of performance, up by 15 percent compared with the same period in 2022.

That is above the average estimate of 13 percent in a company-compiled survey of analysts.

Accor also said third-quarter revenue reached €1.29 billion ($1.36 billion), in line with expectations. The hotel group said it was seeing the first signs that growth was returning to normal after several quarters of intense recovery, with average prices still high.

In France, Accor’s business benefited from the increase in international tourists to Paris, which compensated for weaker domestic tourist numbers. It was also boosted by the Rugby World Cup, particularly in cities where hotel supply is more limited, such as Lille and Nantes, Accor said.

The group, which operates in more than 110 countries, said it sees no risk of the Israeli-Palestinian conflict having a major impact on its activities.

“We are seeing a very low cancellation rate, which is not significant at group level,” Accor’s CEO, Martine Gerow, said on a call with journalists.

Accor has three hotels in Jerusalem and one in Tel Aviv.

The group now expects core earnings (ebitda) of between €955 million ($1 billion) and €985 million for 2023, up from a previous forecast of between €930 million and €970 million, which was already upgraded in July.

It also raised its forecast for growth in revpar in 2023 and now expects it to slightly exceed 20 percent. That was up from a previous estimate at the top end of a 15 to 20 percent range.