Accor Sees No Cracks in Hotel Demand

25.07.2024 - 17:42 / skift.com / Paris Olympics / Sean Oneill / Sébastien Bazin

Accor reported strong results for the first half of the year Thursday, and pointed to promising bookings trends for the second half.

“We’re not worried about the pace of demand and the volume of demand across the globe,” said Sébastien Bazin, Accor’s Chairman and CEO.

The Paris-based operator of 5,682 hotels worldwide said it expected to see very good momentum in the Middle East, the U.S., and Southeast Asia.

The group modestly upgraded its forecast for full-year revenue per available room growth to between 4% and 5%.

The upbeat comments from the hotel group’s executives came Thursday after some airlines recently reported a softening in their airfares and profits in some markets.

The upbeat predictions followed a strong first half, during which Accor saw revenue-per-available room (RevPAR) growth of 6%.

“Ryanair’s second quarter stipulated that they had a drop in pricing of about 15%, but they had an increase in volume by about 10%,” Bazin said, noting that there was no slowdown in demand with Europe’s largest carrier by passenger volume.

“There’s no slowdown in demand in many of the airlines in the world and certainly not in India … or Qatar,” he said.

“If customers do end up paying less for the [air] travel, they may pay more for the hotels and for the food and beverage and entertainment,” Bazin said. “So [the trend in weakening airfares] may be actually going our way in terms of the mix of spending for the same customer.”

Looking to 2025, Bazin referenced Oxford Economics projections and interpreted the data to say that Europe may draw 80 million more visitors in 2025 than this year.

“That would be huge in terms of RevPAR impact,” Bazin said.

Nine months ago, Accor projected that the added demand from France for hosting the Paris Olympics would add about two percentage points of revenue per available room in France and about 0.5% for the group. Executives backed away from those forecasts on Thursday, echoing other reports about weaker-than-expected tourism to France in August generally.

“While the event itself is expected to be strong, there are uncertainties about pre- and post-Olympic periods,” Bazin said. Accor is the accommodation host for athletes during the event.

Accor reported continued pricing strength, particularly in corporate bookings.

“For the last 12 months, every renegotiation that’s been happening with existing customers has been going upward [in rate] to an extent of 4% to 6%, depending on who the customer is and the size of the customer,” Bazin said.

Bazin cited estimates that about 40 million Indian people will travel abroad this year, with most going to Southeast Asia and the Middle East. He believes that number will double over the next two years.

“That would be a huge pick