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AccorHotels' 2018 Profit Rises, Beefs Up Lifestyle Loyalty Initiatives

Published on Feb 22 2019 9:00 AM in Hotel tagged: Trending Posts / AccorHotels

AccorHotels' 2018 Profit Rises, Beefs Up Lifestyle Loyalty Initiatives

AccorHotels has posted record operating profits for 2018, helped by cost controls and robust demand in most key regions including France and Brazil.

The French company said it would invest €225 million over coming years to support new initiatives to boost its presence in hospitality and entertainment services.

These initiatives, which form a lifestyle loyalty programme codenamed "ALL-Accor Live Limitless", include the signing of partnerships with entertainment group AEG and a multi-year deal to become principal partner and official jersey sponsor of the Paris Saint-Germain (PSG) soccer team from the 2019/20 season.

These investments will cost AccorHotels €55 million in 2019 and €45 million in 2020.

The programme is expected to reach breakeven in 2021 and the group expects it will help it exceed its 2022 core earnings or EBITDA target of €1.2 billion that was presented last November.

EBITDA, Revenue And RevPAR

AccorHotels, which runs high-end chains such as Raffles and Sofitel as well as budget brands such as Ibis, said annual EBITDA reached a record €712 million, up 8% on a like-for-like basis and in line with revised company guidance for core earnings between €700 million and €720 million.

Revenue reached €3.61 billion, up 16.9% on a reported basis and driven by acquisitions. On a like-for-like basis revenue grew 8.8%.

Revenue per available room (RevPAR), a key gauge of activity, grew 6.6% in France, with strong gains of 12.2 percent in Paris. In South America, Brazil confirmed its recovery in 2018 for the AccorHotels company.

AccorHotels said it benefited last year from a general pickup in the broader French tourism sector, despite anti-government violence across France and riots on the Champs Elysees in Paris during the fourth quarter.

Basin has been cutting costs and expanding in China and the luxury hotels market, with AccorHotels having bought FRHI Holdings, the owner of London's Savoy and New York's Plaza hotels as well as Australian hotel group Mantra.

AccorHotels has also struck deals in areas such as concierge services and luxury rentals to try to combat competition from the likes of Airbnb.

AccorInvest Sale

In February 2018, AccorHotels agreed to sell 55% of its AccorInvest property business to sovereign and institutional investors for €4.4 billion.

It has used €2 billion of that cash to fund acquisitions and bought back shares for €850 million. It also recently raised its stake in Polish company Orbis to €85.8%, deputy CEO Jean-Jacques Morin said.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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