PARIS--Accor on Tuesday reported revenue results for the first quarter of 2012. Highlights include:
- Revenue up +4.5% like-for-like and +1.2% as reported
- Solid performance in every segment, led by robust rate increases
- Management and franchise fees up +22.2%
- Record expansion during the quarter, with the opening of 7,720 rooms (56 hotels), 90% of which under management and franchise agreements
- Consolidated revenue totaled €1,371 million for the first three months of 2012, up+4.5% like-for-like on firstquarter 2011 and +1.2% as reported.
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First-quarter 2012 revenue up +4.5% like-for-like
Consolidated revenue for the three months ended March 31, 2012 amounted to €1,371 million, up +1.2% on a reported basis. It reflected the following factors:
- The sustained improvement in RevPAR, with average room rates rising in every segment.
- Expansion, which increased quarterly revenue by €11 million and added +0.8% to reported growth. Expansion set a new record during the period, with the opening of 7,720 rooms (56 hotels), 90% of which under management and franchise agreements.
Changes in the scope of consolidation due to the asset disposal strategy, which reduced reported growth by -5.2% and revenue by €71 million, of which €25 million from the sale of Lenôtre.
- The currency effect which, at a positive €16 million, added +1.2% to reported growth, primarily due to the increase in the Australian dollar and US dollar against the euro.
At constant scope of consolidation and exchange rates, the like-for-like increase was +4.5%.
Upscale and Midscale Hotels: up +3.6% like-for-like to €781 million
Revenue from the Upscale & Midscale segment rose +1.4% as reported and +3.6% like-for-like over the quarter. This solid performance was led by the increase in management and franchise fees (+21.4%), in line with the transformation of the Group’s business model. Emerging markets delivered another quarter of robust growth, with gains of +8.3% in the Asia Pacific region and +13.5% in Latin America. The only region where business continued to contract was Southern Europe, particularly in Spain and Portugal. On the other hand, business in Italy has turned upwards, with a year-on-year increase in revenue in the first three months of the year. Over the quarter, revenue from operations in Europe and Asia was lifted by an excellent contribution from the Pullman brand.
Economy Hotels outside the US: up +5.4% like-for-like to €437 million
Revenue from Economy hotels outside the United States rose by a solid +6.1% as reported and +5.4% likefor-like in the first quarter. This performance was driven by the significant increase in management and franchise fees. In Europe, all of the country markets reported similar growth, albeit with steeper gains in Germany, the United Kingdom and Belgium. Emerging markets remained extremely dynamic, with increases of +13.3% in the Asia Pacific region and +17.1% in Latin America. Among the brands, all seasons/ibis Styles and Etap Hotel/Formule 1/ibis budget turned in the best revenue growth performance.
Revenue by key market
In France, revenue rose +1.4% like-for-like in the Upscale & Midscale segment and +2.1% like-for-like in the Economy segment. With volumes penalized by high comparables in first-quarter 2011, growth was led by room rates in every segment. Demand was strong throughout the period, with a pick-up in growth in March.
Paris reported a very good performance and was the primary market growth driver, while business in other large French cities (such as Lyon, Lille and Strasbourg) was hurt by less events last quarter.
In Germany, revenue grew +3.1% like-for-like in the Upscale & Midscale segment and +3.9% like-for-like in the Economy segment. Business was lifted by the solid economic environment and sustained demand. All of the segments benefited from the continued deployment of an effective revenue management process, which made a tangible contribution to RevPAR growth.
In the United Kingdom, like-for-like revenue growth stood at +1.4% in the Upscale & Midscale segment and +5.0% in the Economy segment. Business continued to benefit from very strong demand across every segment and the remarkable gains in London, where the hotels reported room rate increases and close to record occupancy rates for a first quarter (at 79.6% in the Upscale and Midscale and 83.7% in the Economy segment). The “dynamic pricing” policy introduced in the Economy hotels in 2011 continued to deliver benefits and is helping to optimize RevPAR, with strong growth in occupancy rates in the segment.
Economy Hotels in the United States: up +6.8% like-for-like to €128 million
Economy Hotels in the United States had an excellent first quarter, with revenue increasing by +6.8% like-for-like (+6.5% as reported), led by the improvement in both occupancy rates (up +1.2 points to 59.8%) and average room rates (up +3.6% to $42.60). Franchise fees rose by +17.7% over the quarter thanks to the impact of the 79 franchises added in 2011.
Motel 6 is actively pursuing its franchise expansion program, with 46% of its hotels operated under this structure as of March 31, 2012, versus 41% a year earlier.
Robust performance in first-quarter 2012
The solid +4.5% like-for-like growth in first-quarter 2012 revenue was primarily driven by two factors: the firm growth in room rates across every segment and the increase in management and franchise income. The first quarter also saw record expansion, with the opening of 7,720 rooms over the period.
All these factors demonstrate the relevance of Accor’s business model transformation.
Despite the uncertain economic environment in some regions, the Group remains confident for the second quarter, with business expected to follow the same trend as in the first quarter.
Quarterly Information – Significant Events of the Period
Accor opened a record number of rooms in first-quarter 2012, with a total of 7,720 rooms in 56 hotels, of which:
- 90% were under management and franchise agreements and 10% were owned or leased.
- 39% were located in the Asia Pacific region, 24% in Europe and 9% in Latin America.
Accor confirms its objective of opening 40,000 new rooms in 2012.
Accor actively pursued its asset management program during the first quarter, in particular with the outright sale of the Pullman Paris Rive-Gauche in January for €77 million and the sale & management back of the Novotel New York Times Square for €160 million.
In addition, the Group closed in March the sale & franchise back of 20 Formula 1 hotels in South Africa for €28 million.
BBB- rating affirmed by Standard & Poor’s
On March 9, Standard & Poor’s upgraded Accor’s outlook from negative to stable and reaffirmed the Group’s BBB- credit rating.