Accor beats revenue predictions, sees return of France
 
Accor beats revenue predictions, sees return of France
27 JULY 2017 8:33 AM

The first two quarters of 2017 have been a period of growth and change for AccorHotels.

PARIS—Outpacing analyst predictions, AccorHotels outlined strong first-half 2017 numbers as it continues a transformation from a traditional hotel company to one that aspires to be at the center of every community where it has a property.

The company also is right on the cup of moving beyond the 600,000 room mark across its entire portfolio, said AccorHotels’ Group CFO Jean-Jacques Morin during a conference call with analysts.

Its latest two initiatives were announced the day before the H1 results.

The first was the formation a new group of three of its recent buys, Onefinestay, Travel Keys and Squarebreak, to include more than 10,000 upscale, private villa and home rentals, along with hospitality and concierge services. Officials with the French company said they are still finalizing the full buy of Squarebreak, an upscale villa digital platform. Javier Cedillo-Espin, CEO of Onefinestay, will lead the new division.

The second was a 50-50 joint venture with Bouygues Immobilier, the real estate development subsidiary of Bouygues Group, to grow “collaborative workspace” provider Nextdoor in France and Europe.

AccorHotels also has recently moved into sectors such as event and food-and-beverage services, as well as continuing purchasing tech startups such as VeryChic and Availpro.

French bounceback
Morin said the firm was also buoyed by the return of decent numbers from its core market, France, which has suffered from a dip in performance due to terrorism.

France (numbers include Switzerland) saw a 3.7% like-for-like increase in revenue to AccorHotels’ HotelServices division, which showed a 6% revenue increase over its entire portfolio to €839 million ($981 million).

Company officials were less enthused about recent performance in Brazil, which saw revenue drop 9.7%. Revenue for all of South America fell 5.1%.

Despite the headwinds in the region, AccorHotels assumed the management of 26 hotels—approximately 4,400 rooms—in Brazil from Brazil Hospitality Group in March.

“Momentum remains strong for hotels, with 3.8% like-for-like systemwide RevPAR,” Morin said.

H1 2017 performance
First-half 2017 numbers showed revenue increased by 33.5% to €922 million ($1.1 billion), or 8.3% in like-for-like terms, while earnings before interest and tax rose by 68%—33.9% like-for-like—to €226 million ($264 million). Room openings in the first two quarters of the year topped 23,000, 94% of which are franchises and approximately 7,000 rooms of which came from its 50% buy of Turkish resort chain Rixos Hotels in April.

EBIT guidance for the rest of 2017 is forecasted to be between €460 million ($538 million) and €480 million ($561 million).

Morin said the company is still on track to sell its AccorInvest portfolio and that numbers relevant to that portfolio are no longer included in quarterly numbers’ updates.

In February, CEO Sébastien Bazin announced the firm’s new partial asset-light tack, saying that 430 of the 1,100 assets held in the company’s HotelInvest portfolio and with a value of approximately €6.6 billion ($7.7 billion) are to be included in the move. Morin provided an update during Thursday’s earnings conference call.

“(The) separation of HotelInvest as a standalone legality has been completed,” Morin told analysts. “The company is actively participating in discussions with future investors.”

New business—that is, much of AccorHotels’ non-hotel purchases—generated double-digit growth, albeit from a lower base as this business is a new revenue stream for AccorHotels, Morin added.

According to executives, AccorHotels has a pipeline of 910 hotels, with approximately 167,000 rooms. The majority of those, 81%, will be in emerging markets.

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