Solid first half results for AccorHotels as revenue increases by 2%

28 July 2016 by Amanda Afiya

AccorHotels has delivered robust results for the first half of 2016, despite crises and terrorism in key markets such as France and Brazil, according to the French hotel giant's first-half financial results.

Europe's largest hotels group by room numbers saw revenue up by 2% to €2,598m (£2183m), while EBIT was down 4% to €239m (£200m). Its full-year EBIT target is predicted to be between €670m (£563m) and €720m (£605m).

The results follow solid growth in most of the group's key markets, and record development with the opening of 19,366 rooms, 90% of which are under franchise or management contracts.

The report comes just two weeks after AccorHotels announced that it was seeking a "substantial" injection of cash from third-party investors to fuel expansion of its HotelInvest division

In northern, central and eastern Europe, Germany and the UK were the main drivers for growth of 4.3% and 4.4% respectively in the first half of the year. But in France, revenue was down 26% with a "pronounced drop" in Paris where business is still being affected by the events of 13 November as well as strikes and floods in May and June. Regional cities in France, however, reported an increase of activity, up 6%, thanks to the Euro 2016 football tournament.

HotelInvest, which comprises 1,183 properties, demonstrated improved performance, following its restructuring of 120 hotels. The division has recently transferred 85 hotels in Europe to Grape Hospitality, and 12 hotels to Huazhu, resulting in a reduction of adjusted net debt by €233m (£196m). Like-for-like revenue for the division during the second quarter was up 0.7% to €1,232 (£1,036).

The HotelServices division for Q2 reported a 6.1% increase in like-for-like revenue to €359m (£302m).

Sébastien Bazin, chairman and chief executive officer of AccorHotels, said: "With several of our key markets, including France and Brazil, shaken by crises and violent events, the group showed remarkable resilience in the first half of 2016. We continued to invest heavily in order to grow, transform and gain a foothold in new businesses that are destined to become fundamental for the group.

"We will pursue this offensive strategy in the coming months. Our presence in 95 countries, our leadership positions in Europe, Asia-Pacific, Latin America, Africa and the Middle East, and our strength as the world's leading hotel operator covering all segments from economy to luxury give us a major competitive edge."

He concluded that the plan to turn the HotelInvest division into a subsidiary and a strategy that "gives priority to customer-focused innovation" will drive the hotel giant's future growth.

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