French hotel firm Accor has raised its earnings outlook for full-year 2025 and is considering spinning off its its lifestyle hotel and restaurant division Ennismore as a separate publicly listed company.
On a third-quarter earnings conference call Friday, Group Chief Financial Officer Martine Gerow said Accor’s board of directors have unanimously approved this possibility, which she added “would enhance liquidity for minority shareholders and provide additional flexibility to support Ennismore’s growth platform.”
If Ennismore spins off, Accor would remain the controlling shareholder, which contains 192 hotels and approximately 500 restaurants and bars, Gerow said.
“There is no certainty that this transaction will be completed,” she said. “We don’t intend to go asset-heavy in Ennismore, but [it] historically has grown through acquisitions, and this is potentially something that could be on their roadmap going forward. That’s where the flexibility comes in.”
In the third quarter, Accor's performance was affected slightly by the presence of “negative currency movements,” Gerow said.
Gerow added that even though the euro had remained stable during the third quarter in comparison with other major currencies, Accor still anticipates the negative effects of currency fluctuations to affect the company by approximately €60 million. That's double the impact that Accor reported in the third quarter of 2024.
A year ago, Paris hosted the 2024 Summer Olympics, which skews Accor's key metrics in this year's third quarter.
In constant-currency terms, Accor's consolidated revenue increased 0.1% to €1.37 billion ($1.6 billion) for the third quarter. Portfolio-wide, Accor reported a 0.3-percentage-point occupancy increase year over year to 70.9%, a 0.4% increase in average daily rate to €110 and a 0.8% increase in revenue per available room to €78. Accor's premium, midscale and economy division achieved roughly flat occupancy of 71.1%, but ADR fell 1.2% to €89 and RevPAR dipped 1.1% to €63.
The firm's luxury and lifestyle segment performed much better in the quarter, with occupancy up 1.4 percentage points to 69.2%, ADR up 3% to €236 and RevPAR up 5% to €164. Within the division, Accor’s lifestyle hotels recorded a 6.9% increase in RevPAR, and the company's earnings release added that “despite geopolitical tensions, resort hotels continued to perform well during the quarter, particularly in Turkey, Egypt and the United Arab Emirates.”
Gerow said Accor's focus remains on “accelerating network growth and mitigating the impact of [foreign exchange rates], which leads us to upgrade our earnings before interest, taxes, depreciation and amortization growth by two points.”
Accor now projects 2025 EBITDA growth between 11% and 12%, up from prior estimates of between 9% and 10%. The company anticipates full-year RevPAR growth between 3% and 4% and net unit growth of approximately 3.5%.
In August, Accor completed a €240 million share-buyback tranche via an acquisition of approximately 6.67 million shares at an average price of €42.35, Gerow said. The company began the fourth quarter with the launch of new share buyback tranche of €100 million.
In a statement accompanying the earnings release, Accor Chairman and CEO Sébastien Bazin said good performance and demand “have enabled [us] to maintain strong momentum despite a mixed macroeconomic environment. To address these uncertainties, the group’s profit protection measures are proving effective and now enable us to raise our recurring EBITDA target for the year.”
In the third quarter, Accor added 77 hotels and approximately 11,200 rooms to its global hospitality portfolio, good for 2.5% growth in the last 12 months. Its total portfolio now stands as 5,760 hotels and 859,830 rooms with a development pipeline of 1,453 hotels and approximately 250,000 rooms.
Some of Accor's upcoming hotel openings include the 390-room Delano SoHo New York, a conversion of The Dominick hotel; 241-room Fairmont Hanoi; 70-room Hoxton Dublin, and the rebranding of 2,884-room Treasure Island-TI Las Vegas Hotel & Casino within Accor’s soft brand Handwritten Collection, which will be completed in the fourth quarter 2025.
As of press time, Accor’s stock was trading on the Euronext Stock Exchange at €45.15 per share, down 4.2% year to date. The Euronext 100 Index was up 16.8% over the same period.