Sébastien Bazin, Chairman and Chief Executive Officer of AccorHotels, said: “AccorHotels turned in a solid performance in the third quarter, reflecting positive operating trends in the majority of our markets as well as the Group’s strong growth as a result of acquisitions made since the start of the year. In addition to these operations, which enable us to cement our international leadership, our organic growth continued at a fast pace and our pipeline rose above the 1,000 hotel mark, underlining the strength of our brand portfolio. Despite contrasting conditions across our geographies, this strong operating momentum enables us to narrow our EBITDA target to the upper range of the guidance announced in July.”
In the third quarter of 2018, revenue came in at €1,033 billion, up 22.3% as reported and 7.6% like for like.
RevPAR climbed 5.9%, reflecting positive performances in all regions – particularly in Europe (+7.1%) and Asia-Pacific (+3.1%) – primarily as a result of a strong price effect (76%).
Changes in the scope of consolidation (acquisitions and disposals) had a positive impact of €144 million (+17.0%), thanks in particular to the addition of Mantra, Mövenpick and Gekko.
Currency effects had a negative impact of €20 million, attributable to the euro’s substantial appreciation against a number of currencies, and despite a fall in value versus the US dollar (1.0%).
During the period, AccorHotels opened 73 hotels, adding nearly 11,000 rooms. At end-September 2018, the Group’s pipeline had risen above the symbolic 1,000 hotel mark with 1,031 units in planning, representing record volumes of around 184,000 rooms.
SHARP GROWTH IN REVENUE
In third-quarter 2018, the Group posted a sharp 22.3% rise in revenue, mainly reflecting the impact of consolidating Mantra and Mövenpick. Like-for-like growth came in at a solid 7.6%, driven by HotelServices (+9.1%) and Hotel Assets (+6.3%). Revenue from New Businesses contracted by 5.8% like for like.
POSITIVE MOMENTUM FOR HOTELSERVICES
HotelServices, which operated 4,681 hotels (684,836 rooms) under franchise agreements and management contracts at the end of September 2018, reported a 9.1% like-for-like increase in revenue to €679 million. This growth resulted from very strong activity in all regions.
Within the division, Management & Franchise (M&F) posted like-for-like revenue growth of 8.5%, supported by a solid RevPAR performance and expansion of the hotel portfolio:
Systemwide RevPAR system was up 5.9% overall.
In Europe, M&F posted strong like-for-like revenue growth (+10.2%), driven by RevPAR growth of 7.1%.
- In France, RevPAR was up 8.3% like for like. This good performance was driven essentially by Paris (+16.5%), where conditions were favorable thanks to a busy trade fair and sporting calendar. Activity was also strong outside Paris, with RevPAR up 3.5%.
- In the United Kingdom, RevPAR growth during the quarter (+3.4%) reflected a particularly favorable summer period. Unlike in the first half, activity was up sharply in London (+5.8%), where the occupancy rate reached a record high of over 90% in the third quarter. Outside London, RevPAR also increased, albeit at a more modest rate (+1.4%).
- RevPAR growth was +3.7% in Germany thanks to a busy trade fair calendar during the quarter, particularly in September.
- Spain was impacted by the complex political situation in Catalonia, recording a 1.4% decline in RevPAR.
In Asia-Pacific, RevPAR growth slowed slightly to +3.1% while M&F revenue rose 6.1% on a like-for-like basis. In Australia, RevPAR (+0.6%) was affected by political uncertainty as well as the overcapacity of hotel rooms in some major towns and cities. In China, RevPAR remains solid at +6.0%, following growth of +8.1% in the first half of the year.
In the Middle East & Africa region, RevPAR climbed 5.4% during the third quarter, up sharply compared with the first half of the year. The increase was driven by the implementation of a sound pricing strategy during the Hajj celebration in the Middle East. M&F revenue grew by 1.5% on a like-for-like basis during the period.
North America, Central America & the Caribbean delivered a 4.6% increase in RevPAR, with healthy business in Canada (+8.6%). M&F Revenue for the region advanced 7.1% like for like.
Lastly, the recovery in South America continued apace, with RevPAR up 11.2% and M&F revenue up 13.4%. In Brazil, RevPAR rose 10.1%, with a very pronounced acceleration across the entire country, except in Rio, where overcapacity and socio-economic difficulties continued to dampen demand.
The Group’s development continues at a rapid pace. During the third quarter, AccorHotels opened 73 hotels, representing nearly 11,000 rooms. At the end of September 2018, the Group’s pipeline comprised 1,031 hotels and over 184,000 rooms, of which 80% in emerging markets and 49% in the Asia-Pacific region.
MIXED PERFORMANCES IN NEW BUSINESSES
In third-quarter 2018, revenue for the New Businesses division came in at €40 million, reflecting mixed performances across the different businesses. AvailPro, FastBooking and VeryChic posted strong growth, as did recent acquisitions such as Gekko, ResDiary and Adoria, while onefinestay and John Paul turned in negative performances, in part due to the strategic review launched this summer. Overall, the segment grew by 27.1% as reported, and contracted by 5.8% like for like.
HOTEL ASSETS: A SOLID PERFORMANCE IN EASTERN EUROPE AND BRAZIL
Revenue from the Hotel Assets division grew by 6.3% at constant scope of consolidation during the third quarter. The increase reflects brisk business, with 6.2% growth in RevPAR driven by Brazil and Turkey.
At September 30, 2018, the division's hotel base comprised 242 hotels and 45,291 rooms.
FULL-YEAR 2018 EBITDA TARGET
In light of these factors and the expected continuation of the trends observed since the beginning of the year in its different markets, the Group expects full-year 2018 EBITDA to come out in the upper range of the target disclosed in July, i.e., between €700 million and €720 million.
SHARE BUYBACK PROGRAM
As part of the share buyback program announced on July 27, 2018, the Group has bought back 5.7 million shares to date, representing a total of €243 million.
HIGHLIGHTS OF THE PERIOD FROM JULY 1, 2018 to
SEPTEMBER 30, 2018
On July 2, the Group announced it had established a new €1.2 billion revolving credit facility for which the Group's environmental, social and governance (ESG) performance would be taken into account in calculating the margin.
On July 23, Katara Hospitality and AccorHotels created an investment fund with an investment capacity of over USD 1 billion dedicated to hospitality in
Sub-Saharan African countries.
On July 31, the Group signed an agreement to acquire 21c Museum Hotels. The transaction was completed at the end of September.
On September 4, AccorHotels completed the acquisition of Mövenpick.
On September 20, Chris Cahill, until that date CEO Luxury Brands and CEO North America, Central America and Caribbean Region, assumed the role of Deputy CEO responsible for Hotel Operations. Jean-Jacques Morin, until that date Chief Financial Officer, was appointed Deputy CEO responsible for Finance, Communications and Strategy.
On October 5, AccorHotels completes the acquisition of a 50% stake in sbe Entertainment Group.
Capital Market Day, November 27, 2018