Accor's Robust 2022 Invigorates Bet on Local Hybrid Hospitality

25.08.2023 - 14:03 / skift.com / Sean Oneill / Sébastien Bazin

Executives at Accor, Europe’s largest hotel operator with about 5,445 hotels worldwide, envy how U.S.-based hotel operators have consolidated North America. But they argue they have a better sense of the ground game for hospitality in the rest of the world.

Accor’s executives believe that, as the Americans go abroad for growth, they’ll find it hard to compete against Accor’s local footprints, its broader array of more than 40 brands (including Sofitel, Hoxton, and Ibis), and its operational models that they say will be more appealing to local investors.

Accor executives appeared buoyed in their beliefs by their 2022 financial results, released on Thursday, which were slightly better than the year before the pandemic.

In 2022, the Paris-based group generated a net profit of $427 million (€402 million) on revenue of about $4.47 billion (€4.2 billion).

The performance was driven by Accor charging high room rates that, in the second half of the year, were up 12 percent from the pre-crisis level in nearly all regions except for pandemic-plagued China. Revenue was up 4 percent on the pre-crisis level. Rising costs weighed on profit, however. Profit was 13 percent lower than in 2019.

Accor’s management forecasted the company’s rebound would continue in 2023, with full-year revenue per available room — a key industry metric — expected to rise between 5 and 9 percent versus 2022’s level. The company is counting on a revival in international business travel — which were 13 percent below 2019 levels — thanks to China’s reopening.

In 2022, Accor generated $716 million (€675 million) in earnings before interest, taxes, depreciation, and amortization — a measure of profit. That came in above the management’s guidance.

“I’m extremely admiring of the robustness and size and profitability of the U.S. market for hotels,” said Sébastien Bazin, chairman and CEO, in an interview on company strategy before the company released its earnings. “It bounced back [from the pandemic] a year before [Accor], and the margins are better because they control the pricing and are great managers.”

But Bazin said his U.S.-based peers would need to expand internationally to eke out more growth, and they’ll find it’s harder to take share overseas.

“Our competitive advantage is we are very much local,” Bazin said.

One example: Last year, Accor said it won a deal to add 6,000 new hotel keys to Saudi Arabia over three years. In Bazin’s telling, Saudi officials asked him why they should pick Accor.

“I said there’s only one reason, and that it’s that your boss MBS [Mohammed bin Salman Al Saud known informally by his initials MBS] told you to get that project up and running, but today it’s a piece of dirt, I’ve been told,” Bazin said. “Your