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a limited impact of the Omicron variant on Q1 2022 results

Among the key developments for Accor in recent months is the reopening of the Pullman Paris Montparnasse. ©Yann Deret

The results for the first quarter of 2022 presented by Accor confirm the relatively limited effect of the Omicron variant on the recovery in hotel activity observed since last summer. Like most players in the sector, the French group has experienced a continuous recovery in revenue per room (RevPAR) since the second quarter of 2021. And the damage caused by the surge in the variant was ultimately limited to December and January, before a restart in February, then its acceleration from March. A month when the occupancy rate had already returned to a higher level than in the fourth quarter of 2021.

While leisure customers have supported the sector since the end of the first confinement, Accor notes that the recovery observed since the start of the year is also ” the fruit of the sustainable rebound in business customers ” as “the acceleration of the recovery of international customers with the reopening of many borders. Thanks to this, the group unveiled an 85% increase in turnoverat 701 million euros, for the first quarter of 2022 compared to the first quarter of 2021. For its part, the RevPAR more than doubled over the period (+108%), while remaining logically down compared to the first quarter 2019 (-25%).

But, while the French group estimates domestic customers should return to levels comparable to those of 2019 “ by the end of the year and that international travel – except with Asia – is gradually resuming its course, the horizon is clearing up noticeably. The increase in RevPAR announced by Accor is the result both of the growth in hotel occupancy, but also of a sharp rise in pricesGroup-wide above 2019 level for four months“, underlines Accor in its press release. A rate increase to which business travelers will have to get used to, the positive evolution of demand such as the accentuation of inflation pushing for a sustainable growth in room prices.

Accor’s performance in the first quarter of 2022 confirms the clear upturn in activity in all regions and the renewed dynamics of tourism, catering and leisuredeclared Sébastien Bazin, CEO of the French group. They are driven in particular by the dynamics of our markets in Europe, the Middle East and the Americas, as well as strong demand for our Luxury and Lifestyle hotels, and domestic travel. »

The geographical analysis of the quarterly results reveals the dynamics in the different parts of the world. While most regions still record results below those of 2019, around 20% in Southern Europe and 30% in Northern Europe, some regions, on the other hand, exceeded pre-Covid levels. Unsurprisingly, the Middle East saw its activity driven by the Universal Exhibition in Dubai, but also by the wider reopening of the holy cities of Saudi Arabia to pilgrimages. As a result, the RevPAR of the India, Africa, Middle East & Turkey region is 8% higher than the level of the first quarter of 2019. Lagging behind for many months, another part of the world is also experiencing an upturn in its hotel business: South America. The RevPAR there shows an increase of +5% compared to the first quarter of 2019, explained by Accor by “ recovery in demand from business customers“.

The reopening of borders promotes the return of international business customers

For its part, Australia, without exceeding, far from it, pre-Covid levels – the RevPAR of the Pacific region remains at -31% at the start of 2019 -, is gradually recovering. Long closed to international travel and also limiting local travel, the spearhead of the Pacific region has benefited from the reopening of internal borders which has generated a rebound in domestic tourism to leisure destinations. Starting from February, the reopening of the external borders has favored the recovery of business customers. In the same vein, in Southeast Asia, the reopening of borders in Singapore, Bali, Vietnam and Thailand has allowed the situation for hoteliers to improve, even if the RevPAR of the region remained stable compared to the start of 2019, at -55%.

Closer to home, in Europe, the revival of international travel is also benefiting hoteliers in major cities. Thus, in France, if the province remains the most dynamic area than the Paris region, the performance gap is narrowing with the return of international business customers. An identical phenomenon in the United Kingdom where London is also benefiting from the resumption of travel, especially from the United States. Among the major European countries, Germany, on the other hand, remained behind due to stronger and longer health restrictions. Hence a RevPAR down -62% compared to the first quarter of 2019. “ Nevertheless, these restrictions have been lifted since the beginning of April and an improvement in activity is now visible.“, emphasizes Accor, which is widely established in this market.

Finally, while the United States and China were the first to see hotel activity pick up, the situation in the first quarter of 2022 is mixed. Across the Atlantic, the French group notes that after a difficult month of January, a ” strong rebound » activity with the return of business customers combined with strong demand from leisure customers. Hence a drop in RevPAR for the North/Central America and Caribbean region limited to -22% compared to the first quarter of 2019. Conversely, in China, the RevPAR recorded a significant drop of -42% compared to the first quarter of 2019, due to the emergence of the Omicron variant and the “zero Covid” strategy pursued by the country.

At the same time as the announcement of these results, Accor confirmed its development ambitions with net network growth of +3.5% expected for the whole of 2022. While 26 hotels were added in the first quarter, the pace of openings should accelerate from the second quarter. At the end of March 2022, the group had 777,849 rooms and 5,304 hotels worldwide and 212,000 rooms and 1,212 hotels in the pipeline.

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