(AOF) – Accor announces that its presence in Japan “should soon double” with a new strategic partnership concluded with JHRA, relating to the renovation of the establishments of the Daiwa Resorts portfolio and their conversion into Grand Mercure and Mercure hotels in order to offer experiences adapted to the national market. This operation will make it possible to integrate 23 addresses and more than 6,000 rooms into the group’s establishments in the archipelago. The conversion of these hotels will take place throughout 2024, after which they will operate under the Grand Mercure and Mercure brands.
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Key points
– World’s leading hotel operator, created in 1967, with more than 40% of the market (excluding France, 1/3 of the market), leader in Asia-Pacific, Middle East-Africa and Latin America;
– Hotel portfolio of 5,445 hotels, i.e. more than 802,000 rooms in 100 countries, from luxury for 26% of revenues under the brands Fairmont, Pullman, Raffles, Sofitel, etc. to mid-range (34%) and economy Adagio, Ibis, Mercure, Novotel, etc.;
– Activity of €4.2 billion balanced worldwide and divided into two major divisions, HotelServices for hotels owned by franchise or by management (76%) and HotelAssets for those owned directly (26%) as well as diversification into concierge services, rental of luxury residences or digital services for hoteliers, etc.;
– Economic model based on the reduction of capital requirements by “asset light” – sale of buildings and management control -, by building loyalty and by optimizing the model;
– Capital characterized by the presence of the Chinese hotel operators Jin Jiang and Huazhu (13% and 6.2% each), the Qatari fund QiA (11.3%) and the English Kingdom Hotels (9.21%), the founders retaining 1.43% of the capital, with a board of directors of 12 members chaired by the general manager Sébastien Bazin;
– Financial structure under control with €2.8 billion in liquidities, a return to positive free cash flow of €337 million and net debt reduced to €1.7 billion and the rating raised.
Challenges
– Simplification of the organization into two divisions:
– “Economy, Midscale & Premium Division”, a hotel division bringing together the Ibis, Novotel, Mercure, Swissôtel, Mövenpick and Pullman brands,
– “Luxury & Lifestyle Division”, division bringing together the luxury hotel brands and Ennismore, the Group’s Lifestyle entity;
– Innovation strategy in the service of augmented hospitality ALL-Accor Live Limitless with a single platform concentrating the group’s offers, exploiting personal and commercial data to build customer loyalty;
– “Planet 21” environmental strategy of zero carbon by 2050 for all hotels under the Accor brand:
– 2025 stage plan: reduction of 25.2% of gas emissions internally and 15% of those of suppliers,
– elimination of single-use plastics, audit of third-party suppliers, launch of the 1st “green loan”
– Benefits of the strategic partnership with the Chinese Huazhu Hotels Group, aimed at strengthening the Ibis, Mercure and Novotel brands in China, Taiwan and Mongolia;
– Continuation of the reduction of the balance sheet by sale of the head office and holdings;
– Acceleration of diversification in “lifestyle”.
Challenges
– Change in RevPar, indicator of hotel activity, above its 2019 level;
– Strong exposure to Europe, which contributes nearly 40% of operating profit, and expectation that China will catch up;
– Faced with inflation, effectiveness of the RESET plan for recurring cost savings -€200 million per year, reinforced by an energy savings plan in hotels;
– After a virtual doubling of turnover and a quadrupling of net profit, 2023 objectives: 5 to 9% growth in RevPar and a more than doubling of gross operating surplus between €610 and €640 million;
– Return of the dividend, in the amount of €1.05, together with an exceptional dividend of €0.34.
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World tourism still on the rise
In the first nine months of 2022, 700 million tourists traveled internationally, more than double (+133%) the figure recorded for the same period in 2021. This figure reached 63% of 2019 levels, which should allow the sector to reach 65% of its pre-pandemic levels in 2022. This result is due to a strong level of demand and the gradual lifting of restrictions in a large number of countries . Europe is significantly supporting this rebound with the arrival of 477 million people between January and September 2022 (68% of the global total), reaching 81% of the pre-covid level. Tourism there is driven by strong intra-regional demand and travel from the United States. Some destinations recorded notable increases in receipts, including Serbia, Romania, Turkey, Latvia, Portugal, Pakistan, Mexico, Morocco and France.