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Revenue for the year ended December 31, 2011 amounted to 6,100 million euros, up +2.5% on a reported basis, shaped by the following factors:
– Record expansion, well above the Group’s objectives, added 108 million euros (+1.8%) to reported revenue, with the opening of 38,700 new rooms (318 hotels)
– Changes in the scope of consolidation linked to the asset-management strategy reduced revenue by 255 million euros (-4.3%)
– The currency effect was a negative 12.6 million euros (-0.2%), with the appreciation of the Australian dollar offsetting the fall in the US dollar.
Like-for-like revenue growth for the year came to +5.2%, lifted by improved occupancy rates and average room rates across all segments.
Fourth-quarter revenue up +3.6% like-for-like
Revenue for the fourth quarter of 2011 came to €1,503 million, down a reported +1.1% over the year-earlier
period reflecting:
– An ongoing improvement in RevPAR led by higher average room rates
– Expansion, which increased revenue by 28 million euros, adding +1.8% to reported growth
– The negative impact of the asset-management strategy, which reduced revenue by €93 million
and reported growth by -6.1%
– The currency effect, which trimmed 5 million euros from revenue and reduced reported growth by -0.4%
Excluding these effects, revenue for the fourth quarter of the year was up +3.6% like-for-like. Upscale & midscale Hotels: revenue up +5.0% like-for-like over the year and +3.1% in the fourth quarter Revenue for the year in the Upscale & midscale segment rose +3.4% as reported and +5.0% like-for-like. In the fourth quarter, revenue increased by +3.1% like-for-like, led by improved average room rates and despite an unfavorable comparison basis in December in Europe.
The trends observed since the start of 2011 continued in the fourth quarter, with solid performances in the main markets, sustained business volumes in emerging markets and persistently difficult conditions in Southern Europe.
Economy Hotels excluding the United States: revenue up +6.3% like-for-like over the year and +4.8% in the fourth quarter Revenue for the year from Economy hotels excluding the United States rose +5.0% as reported and +6.3% like-for-like. Business levels remained strong in the fourth quarter and revenue grew +4.8% like-for-like. The Group continued to record its highest occupancy rates in this segment, at an average 68% for the quarter. This helped to lift RevPAR, boosted by higher average room rates.
The fourth quarter saw an excellent performance in France, Europe’s fastest growing market, with like-for-like increases of +3.3% in the Upscale & midscale segment and +3.9% in the Economy segment. RevPAR growth was led by average room rates in both segments, despite high comparatives due to the severe weather in December 2010 that had driven up demand at hotels located close to airports. The unfavorable calendar effect represented by the Paris Auto Show, which takes place every two years in October, was offset by the Paris Batimat trade fair, held in November 2011.
In Germany, revenue for the fourth quarter was up +1.7% like-for-like in the Upscale & midscale segment and +1.5% like-for-like in the Economy segment. Performances remained very robust in an environment shaped by record-high demand (69% occupancy rate) and rising average room rates.
In the United Kingdom, fourth quarter like-for-like revenue growth stood at +1.5% in the Upscale & midscale segment and +3.4% in the Economy segment. The London market remained the principal growth driver, with the capital’s hotels in all segments reporting record occupancy rates averaging 87% for the quarter and significantly raised room rates. Occupancy rates outside the capital sharply improved, particularly in the Economy segment thanks to marketing actions towards short-break leisure travelers.
Business levels remained very strong in emerging markets, leading to high growth rates in all segments. In the Asia-Pacific region, revenue grew +8.0% in the Upscale & midscale segment and +6.6% in the Economy segment. In Latin America, revenue was up +14.6% in Upscale & midscale hotels and +19.3% in Economy hotels.
Economy Hotels in the United States: revenue up +4.3% like-for-like over the year and +4.5% in the fourth quarter. On a like-for-like basis, revenue was up +4.3% for the year including a strong +4.5% performance in the fourth quarter. The improvement in prices observed in the third quarter accelerated in the final months of the year, with average room rates up +3.4% in the fourth quarter. Due primarily to an unfavorable currency effect, reported revenue for the year in the US economy hotels contracted by -4.2%.
At the same time, Motel 6 pursued its shift to a franchising model. With 55 new hotels (4,100 rooms) opened under franchise contracts in 2011, the franchise portfolio expanded by +10% over the year to 488 hotels (37,500 rooms), representing 35% of the room supply. Franchising fees rose +23% at constant exchange rates over the year.
Record expansion in 2011
In line with its ambitious expansion strategy, Accor opened 38,700 rooms in 2011, 95% of them under asset-light modes (franchise contracts, management contracts and variable leases). In particular, the year saw very strong franchise-based expansion, illustrated notably by a franchise deal for 24 hotels (2,700 rooms) in the United Kingdom that were converted to the Mercure brand. At year-end 2011, Accor’s network reached 531,700 rooms.
In all, Accor significantly exceeded its expansion target in 2011. France accounted for 23% of total growth, the rest of Europe for 24% and the Asia-Pacific region for 33%.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
