War in the Middle East has negatively affected Accor's results, CFO Martine Gerow acknowledged Thursday during the company's first-quarter earnings call, but she emphasized that much of the impact on Accor's local portfolio has been isolated to the United Arab Emirates.
Accor's first-quarter systemwide revenue per available room increased 5.1 percent year over year to €69. In the UAE, RevPAR declined 9 percent year over year. RevPAR rose in Saudi Arabia, Egypt and the broader Middle East region, which accounted for 8 percent of Accor's room portfolio as of Dec. 31 and 12 percent of its full-year room revenue.
Gerow said the company's UAE properties account for 3 percent of Accor's total network and that demand in other regions "remains healthy."
"There's not a ton of visibility given the booking windows, but when we look at the rooms on the books, we don't see any cracks in demand outside the Middle East and the UAE," Gerow said. "Europe is holding up. … Asia is still performing quite well. America is performing quite well. Canada is really performing very well when we look at rooms on the books, and the U.S. is performing quite well."
Responding to a question about potential jet fuel shortages and the effect on Accor's businesses, Gerow said that 80 percent of European travel stays within Europe and 70 percent of travel in Southeast Asia stays within that region.
"To some extent, that protects us from what could happen with fuel shortages or airline prices," she said.
Even as the Middle Eastern conflict's impact appears contained, Gerow said Accor has already redirected investments toward stronger-performing markets and in March launched a group-wide profit protection plan "to protect margin and to mitigate the impact of lower trading on our [earnings before interest, taxes, depreciation and amortization]."
Accor Q1 Metrics
First-quarter RevPAR in the Americas region—made up of North, Central and South America and the Caribbean—increased 9.1 percent year over year to €45.
Q1 RevPAR in Accor's Premium, Midscale & Economy division increased 4.5 percent year over year to €55, and it rose 6 percent to €149 in its Luxury & Lifestyle division.
Systemwide average daily rate grew 3.4 percent in Q1 year over year to €112. ADR in the Americas region increased 5.1 percent to €75. It rose 2.8 percent to €89 among the PM&E division and increased 4.2 percent to €246 at Luxury & Lifestyle properties.
Systemwide Q1 occupancy hit 61.5 percent, up 1 percentage point year over year, while Americas occupancy increased 2.2 percentage points to 60.3 percent.
Total first-quarter revenue increased 2.3 percent year over year to €1.3 billion.
Accor opened 48 hotels comprised of 6,700 rooms during the first quarter, representing a net unit growth of 3.8 percent over the last 12 months. As of March 31, the company's portfolio totaled 5,815 hotels, or nearly 880,000, rooms, and had a pipeline 1,545 hotels, or 260,000 rooms.
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