Asia Weakness Drags On Accor's Hotel Business
Street protests in Hong Kong put a brake on Accor's revenue growth in 2019, and the group behind chains including Movenpick and Ibis expects a further impact in China this year where many of its hotels are not taking reservations.
Europe's biggest hotel company said that the effects of China's coronavirus health crisis, which emerged in January, are "global and hard to measure".
Some 200 of its 370 Chinese hotels are no longer open for bookings, financial chief Jean-Jacques Morin said, adding that revenue per available room (RevPAR), a gauge of performance, is down 90% in greater China at present.
While China alone accounts for only 3% of group sales, Asia Pacific makes up more than a third, and there could be a spillover effect on bookings elsewhere as the Chinese government looks to contain the fast-spreading virus with travel bans.
The group already took a hit in Asia Pacific last year, with RevPar in Hong Kong halving in the fourth quarter due to anti-government protests that have kept tourists away, and it said that Washington-Beijing trade tensions have dragged on business.
It also booked a €150 million impairment charge in Australia, which was ravaged by bushfires in December.
Annual Sales, EBITDA And Share Buybacks
Accor said that annual sales rose 16% from a year earlier to €4.05 billion and were up 3.8% when not including the effects of acquisitions and currency movements.
Analysts polled by Refinitiv had expected revenue to come in at €4.1 billion.
Accor's earnings before interest, tax, depreciation and amortisation (EBITDA) were up 14.8% to €825 million, inside its targeted range and a touch below the €834 million average forecast by analysts.
The group said that it will step up share buybacks, with a €600 million programme in 2020. It is targeting another €400 million in 2021.
Accor has been moving further into luxury hospitality and investing in businesses such as concierge services as it combats pressure from home sharing services such as Airbnb.