PARIS—The evolution of Accor’s portfolio will continue to pick up momentum, executives said Wednesday while detailing the company’s first-half performance.
By year-end 2016, Accor remains committed to a portfolio that will consist of 40% rooms being managed, 40% under franchise agreements and 20% in owned or leased hotels. To meet that goal, the company is developing a brand-based operating organization to be introduced 1 January 2013. Also, Accor is creating a Property Management Department that will consolidate its property-related activities.
Accor’s Chairman and CEO Denis Hennequin said the company is not willing to go to a 100% asset-light model for several reasons. First, the European market is largely structured so that companies retain ownership in at least some hotels. And secondly, Accor does not want to give up the revenue opportunities that come from hotel operation.
“The challenge now for us is to do this better and (be) quicker,” Hennequin said during a presentation to analysts that was webcast and translated into English. Hennequin added he believes one of Accor’s strengths lies in its operational expertise.
Development efforts
As far as development goes, Hennequin said the company added more than 20,000 rooms to its portfolio during the first half of the year, 89% of which were either franchised or managed. He said that for the full year 2012, the company anticipates adding 40,000 rooms to its portfolio.
Most of the activity (12,600 rooms and 74 hotels) opened under management contracts, 19% of which were Pullman hotels and 16% were Ibis-branded. In fact, 661 properties were rebranded to Ibis as the company continues its rollout of Ibis as a “megabrand.”
“This rebalancing will not only continue, it will accelerate,” Hennequin said.
Accor has 108,700 rooms in its pipeline for the period extending to 2016. “Pace is excellent,” he said of hotel openings. The company counts more than 4,400 hotels in its portfolio comprising more than 530,000 rooms.
To date, 63% of the company’s portfolio is in Europe, 36% is in emerging markets and 1% is in North America. The company took a big step out of the North American market earlier this year via its $1.9-billion sale of the Motel 6 and Studio 6 brands to a Blackstone Group affiliate.
Fifty-nine hotels were disposed of during the first half of the year. Hennequin said midscale hotels that contribute the most to margins will be retained.
First-half performance
While noting a slowdown in Southern Europe, Global CFO Sophie Stabile said the company recorded strong revenue-per-available-room performance this year.
“We have not noticed any reversal in trends as regards to demand,” she said.
During July, for instance, the company said RevPAR increased by 2.9% for upscale and midscale hotels, including 6.1% growth in Asia/Pacific. RevPAR was more tempered for economy hotels, which notched a 0.2% year-over-year gain in July, including a 3.2% drop for Europe (excluding France) and 12.5% gain for the Latin American region.