Accor has reported good performance across all segments, led by steadily rising prices:
First-half revenue up 3.6% like-for-like, reflecting improvement in RevPAR and led by the growth in prices across every segment and the sharp increase in Management and Franchise fees.
• 20.1% increase in management and franchise fees over the semester
• Record expansion in the first-half, with the opening of 20,700 rooms (141 hotels), 85% of which under management and franchise contracts
• Growth linked to business levels that remained very robust in emerging markets (the Asia-Pacific region, Latin America and Africa/Middle East). Generally stable in Europe, with solid conditions in the key markets (excellent performance in the capitals) but still very challenging in the Southern countries.
• Despite low visibility and the uncertain economic environment in some regions, the Group anticipates these ongoing trends to carry on through the summer season.
Revenue for the six months ended June 30, 2012 H1 2011 (restated) H1 2012 (reported) % change (restated) % change (like-for-like)
Upscale & Midscale 1,698 1,710 +0.7% +3.5%
Economy 911 952 +4.5% +4.0%
Hotels 2,609 2,662 +2.0% +3.7%
Other businesses3 111 55 -50.4% +2.2%
Total 2,720 2,717 -0.1% +3.6%
Expansion results
Increased revenue by €37 million, adding 1.4% to reported growth. The expansion set a new record during the period, with the opening of 20,700 rooms (141 hotels), 85% of which under management and franchise contracts.
This includes 5,400 rooms added by the Mirvac acquisition, which was completed last May.
Upscale and Midscale Hotels: second-quarter revenue up 3.5% like-for-like to €929 million
Revenue from the Upscale & Midscale segment rose 0.1% as reported and 3.5% like-for-like over the quarter. This performance was driven by the 19.7% increase in management and franchise fees. Emerging markets continued to deliver a very good performance, with growth of 7.9% in the Asia-Pacific region and 9.5% in Latin America. In Europe, demand remains strong, even though the situation in Spain, Italy and Portugal still weighed on the regional performance. Sofitel reported the segment’s best performance for the quarter.
Economy Hotels: second-quarter revenue up 2.8% like-for-like to €516 million
In the second quarter, revenue from Economy Hotels rose by 3.3% as reported and 2.8% like-for-like, lifted by generally rising prices and the 13.1% increase in management and franchise fees. Emerging markets remained extremely dynamic, with gains of 6.8% in the Asia-Pacific region and 14.6% in Latin America. The key European gateways turned in a good performance for the period.
Management and franchise fees
Thanks to the dynamic expansion strategy, management and franchise fee revenue rose by 20.1% to €233 million in the first half, with growth of 20.5% in the Upscale & Midscale segment and of 18.9% in Economy Hotels.
Revenue in the UK
Demand in the United Kingdom remains very strong. However, preparations for the London Olympic Games had a negative impact on the revenue of the Upscale & Midscale segment that was down 3.9% like-for-like with the renovation of some London hotels and the anticipated closure of the Excel Congress Center as well as the O2 Arena.
On the other hand, revenue from Economy Hotels rose by 4.3% like-for-like, led by the combined impact of firm demand and sustained application of the dynamic pricing policy, which helped to optimize RevPAR. At the same time, the UK operations benefited from the growth in fee revenue thanks to their dynamic expansion strategy.
Significant Events
Expansion
Accor turned in another record performance in room openings in first-half 2012, bringing on stream a total of 20,700 rooms in 141 hotels, of which:
– 85% were under management contracts or franchise agreements.
– 57% were in the Asia-Pacific region, 25% in Europe, 13% in Africa and the Middle East and 5% in Latin America.
Motel 6 disposal
On May 22, Accor announced the sale of Motel 6 to Blackstone for $1.9 billion. The transaction should be completed in the third quarter.
Transaction carried out since June 30, 2012
Acquisition in Latin America
On July 16, Accor announced the acquisition of the South American activities of Grupo Posadas. It includes a portfolio of 15 hotels (2,600 rooms) and a secured pipeline of 14 hotels (2,000 rooms) under management contracts. This operation consolidates Accor’s leadership over this area, especially in Brazil.