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 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.
Consolidated EBITDA was €205 million in H1 2022, versus €(120) million 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.
Management & Franchise EBITDA by region
The Management & Franchise division of HotelServices reported an EBITDA of €297 million in H1 2022, significantly higher than in H1 2021 (at €55 million) 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 in H1 2022 versus €25 million 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 in H1 2022, compared with €67 million in H1 2021.
The Share of net profit of associates & JVs came to €(27) million 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 positive impact recognised following the partial sale of a 1.5% stake owned in Huazhu in February 2021.
Cash flow generation
During H1 2022, the Group’s recurring free cash flow improved significantly, from €(260) million in H1 2021 to €41 million 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.
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, versus €1,844 million as of December 31, 2021. This slight increase is related to the finalisation 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, Accor had a liquidity position of €2.5 billion. The €560 million line, negotiated in May 2020, matured in May 2022.
Transformation and simplification of the Group’s structure
On July 5, 2022, the Group announced that it is evolving its structure to capitalise on the transformation undertaken in recent years, consolidate its leadership positions, focus its efforts, strengthen its know-how, accelerate its growth and continue to improve its profitability. As such, Accor will leverage two divisions comprising separate and distinctive expertise with the aim of further strengthening the excellence of each of these business lines, improving their operational and financial performance, offering their owners and guests even more relevant products and services, and attracting the best talents.
From October 1, 2022, Accor will be structured around two dedicated divisions:
“Economy, Midscale & Premium Division”, comprising notably the Group’s brands ibis, Novotel, Mercure, Swissôtel, Mövenpick and Pullman.
“Luxury & Lifestyle Division”, bringing together Accor’s luxury brands as well as the Group’s Lifestyle entity, Ennismore.
To support the implementation and ensure the roll-out of this new structure, Accor’s Board of Directors has confirmed its support to the Group’s leadership and unanimously decided to propose the renewal of Sébastien Bazin as Chairman and CEO at next Annual General Meeting called to approve the 2022 financial statements.
EBITDA guidance for FY22
Based on the activity recorded in the first half and considering the current macro-economic uncertainties in the second half-year, the Group expects EBITDA to exceed €550 million for the full-year 2022.
Events in first-half 2022
Exclusive negotiations on the disposal of a 10.8% interest in Ennismore
On June 21, 2022, Accor announced it is entering into exclusive negotiations to sell a 10.8% stake in Ennismore to a Qatari consortium for a total amount of €185 million. The envisioned also includes the preliminary contribution to Ennismore of the Group’s stake in Rixos, a hotel operator specialised in “All-Inclusive” hotels in the Middle East, and Paris Society, an upscale player in the restaurant, events and entertainment sectors.
Accor will retain a controlling stake of 62.2% in Ennismore, with the remaining shares held by Sharan Pasricha founder & co-CEO of Ennismore and the new incoming investors.
Closing is expected to occur in the second semester of 2022.
Decision made by the Board of Directors
At its meeting on February 23, 2022, and based on the recommendations of the Appointments, Compensation and CSR Committee, the Board of Directors resolved to propose the renewal of Mrs. Qionger Jiang, Mrs. Isabelle Simon, Mr. Nicolas Sarkozy and Mr. Sarmad Zok as Directors of the Company for a three-year duration.
The Board also decided to propose, in addition to the appointment of Mrs. Hélène Auriol Potier, which was already announced, the appointments of Mrs. Asma Abdulrahman Al-Khulaifi and Mr. Ugo Arzani as Directors, for the same period of three years.
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”.