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French hotel group Accor confident over 2019 after robust H1

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Accor, Europe's largest hotels group, said it was confident over its 2019 prospects after reporting a 5.1 per cent rise in first-half operating profit, driven by restructuring efforts and robust demand in most regions.

[PARIS] Accor, Europe's largest hotels group, said it was confident over its 2019 prospects after reporting a 5.1 per cent rise in first-half operating profit, driven by restructuring efforts and robust demand in most regions.

Accor, which runs high-end chains such as Raffles and Sofitel as well as budget brands such as Ibis, predicted another rise in profit for 2019.

This would be achieved as Revenue per Available Room (revPAR), a key gauge of activity, would grow around 3 per cent, with Asia-Pacific progressively improving in the second half.

"The execution of our plan and our business momentum remain on track to achieve another record year in 2019," CEO Sebastien Bazin said in a statement.

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Accor, with close to 4,800 hotels in 100 countries, has been cutting costs, and expanding in Asia and in the luxury end of the market.

It has also been investing in new areas such as concierge services, to boost its growth and fight the rising challenges posed by companies such as Airbnb and online travel agents.

First-half earnings before interest, depreciation and amortisation (EBITDA) rose 5.1 per cent on a like-for-like basis to 375 million euros (S$573.7 million).

For the full-year 2019, Accor expects EBITDA to rise to between 820-850 million euros, from 712 million in 2018.

RevPAR rose 2.9 per cent on a like-for-like basis in the first-half, driven by robust demand in Europe, South America and the Middle East.

In France alone, revPAR grew 4.7 per cent, boosted by the International Paris airshow and the Women Football World Cup.

RevPAR in Asia Pacific, which declined 0.6 per cent in the first quarter, improved in the second quarter to 0.3per cent growth.

The improvement was expected to continue in the second half notably in Australia but China was more difficult amid commercial tensions with the United States, deputy CEO Jean-Jacques Morin told a conference call.

Accor is currently talking with various investors with a view to selling the real estate assets of its Polish unit Orbis. These operations have a gross asset value of 1.1 billion euros, Mr Morin reiterated.

Accor shares have gained 9per cent so far this year, underperforming a 17 per cent rise in the CAC-40 Index of French blue chips.

 

REUTERS