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First-half 2011 was shaped by:
– Continued strong growth led by a steady rise in occupancy rates and a gradual recovery in average room rates.
– Consolidation of the business model and a solid operating performance with a very good 51.5% flow-through ratio (excluding the impact of events in Egypt and Ivory Coast).
– Improvement in EBITDAR margin, up 1.1 point like-for-like to 30.2%.
– Pursuit of the disposal program: more than 7,400 rooms refinanced for an impact of 191 million euros on adjusted net debt.
– A dynamic expansion program with the opening of nearly 13,700 rooms (78% through franchise and management contracts) out of a full-year target of 30,000 rooms.
– Net debt of 559 million euros at end-June 2011, a reduction of 171 million euros compared with six months earlier.
Consolidated revenue for the six months of 2011 totaled 2,973 million euros, up 4.4% on a reported basis and 5.8% like-for-like compared with first-half 2010.
Energized by sustained demand in the main European markets and emerging countries, Accor delivered a robust revenue performance in first-half 2011 with an acceleration in the second quarter. Occupancy rates rose steadily while the improvement in average room rates gradually spread across all segments.
Revenue in the Upscale & Midscale and Economy segment excluding the United States rose respectively by 6.0% and 6.4% like-for-like, despite significantly higher comparatives than in 2010.
Accor plans to open 30,000 new rooms in 2011. In the first six months, nearly 13,700 rooms were opened, of which:
– 78% under management contracts and franchise contracts.
– 29% in the Midscale segment and 37% in the Economy Hotels excluding the United States.
– 41% in Europe and 32% in Asia.
In the Upscale & Midscale segment, revenue increased by 5.2% in first-half 2011 as reported and by 6.0% like-for-like. In Upscale & Midscale hotels, EBITDAR margin improved by 1.2 points like-for-like to 27.9%, with Novotel and Pullman reporting the sharpest improvements. Moreover, margin increases in the segment were especially remarkable in France and Brazil.
The Upscale & Midscale segment’s performance was fueled by an increase in average room rates for the period.
Revenue from Economy Hotels excluding the United States rose 5.8% as reported and 6.4% like-for-like.
EBITDAR margin for the segment stood at 36.8%, an increase of 0.2 points like-for-like. The margin improvement was driven by the performance of the Ibis and Etap brands and by the recovery in business in the main markets. The performance of Economy Hotels excluding the United States was driven mainly by occupancy rates, which rose to record highs during the semester.
Motel 6 revenue rose by 3.7% on a like-for-like basis in the first half of 2011 (-5.0% as reported). Revenue was led by the improvement in occupancy rates, resulting in a slight -0.1point like-for-like contraction in EBITDAR margin to 27.9%. The brand continued to transform its network with the opening of 22 hotels under franchise contracts, nine sale-and-franchise-back agreements in the first-half and the disposal of eight hotels during the period.
Outlook for 2011
Ongoing positive trends in July despite higher comparatives than in the first half. In Upscale & Midscale Hotels in Europe, July 2011 RevPAR excluding tax was up 7.5% like-for-like, compared with a 7.7% rise in the first half of the year. In the Economy Hotels segment in Europe, July RevPAR excluding tax was 7.7% higher like-for-like, compared with a 5.0% improvement in the first half.
In the US Economy Hotels segment, July RevPAR* was up 4.0% for the month, versus a 3.1% rise in the first half. Second-half trends are supported by the summer season’s good performance. The Group has noted no measurable sign of slowdown in the cycle recovery at this stage.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
