Accor invests $255m in lifestyle initiatives following record 2018 profits [Infographic]

by | Mar 19, 2019 | Chains, News

AccorHotels’ growing brand portfolio

Accor, Europe’s largest hotel company, posted record operating profits for 2018, helped by cost control and robust demand in key regions such as France and Brazil.

Accor, the France-based company that is Europe’s largest hotel operator, posted record operating profits for 2018. They are in part due to cost controlling efforts and robust demand in key regions such as France and Brazil.

Now, the French company said it plans to invest €225 million (the equivalent of $255 million) over the coming years, in new initiatives to boost its presence in hospitality and entertainment services.

These initiatives, which form a lifestyle loyalty programme codenamed “ALL-Accor Live Limitless“, include the signing of partnerships with entertainment group AEG and a multi-year deal to become the principal partner and official jersey sponsor of the Paris Saint-Germain (PSG) soccer team from the 2019/10 season.

The low-down on Accor’s financial future

All told, these investments stand to cost Accor €55 million in 2019 and €45 million in 2020.

The program is forecast to break even in 2021 and the group expects it will help it exceed the 2022 core earnings or EBITDA target of €1.2 billion which was presented last November.

Shares in the group were down 2.3% in early trade on Tuesday after having reached their highest point in more than two months.

Accor, which runs high-end chains such as Raffles and Sofitel as well as budget brands such as Ibis, said annual EBITDA reached a record €712 million, up 8% on a like-for-like basis and in line with revised company guidance for core earnings between 700 million and 720 million.

An overview of Accor’s revenue growth

Revenue reached €3.61 billion, up 16.9% on a reported basis and driven by acquisitions. On a like-for-like basis, revenue grew 8.8%.

Revenue per available room (RevPAR), a key gauge of activity, grew 6.6% in France, with strong gains of 12.2% in Paris. In South America, Brazil confirmed its recovery in 2018 for AccorHotels.

The company said it benefited last year from a general pickup in the broader French tourism sector, despite anti-government violence across France and riots on the Champs Elysees in Paris during the fourth quarter.

Basin has been cutting costs and expanding in China and the luxury hotel market, with Accor having bought FRHI Holdings, the owner of London’s Savoy and New York’s Plaza Hotel, as well as the Australian hotel group Mantra.

Accor has also struck deals in areas such as concierge services and luxury rentals to combat competition from the likes of Airbnb.

In February 2018, AccorHotels agreed to sell 55% of its AccorInvest property business to sovereign and institutional investors for €4.4 billion.

Of this, it has used €2 billion to fund acquisitions and bought back shares for €850 million.

It also recently raised its stake in the Polish company Orbis to 85.8%, deputy CEO Jean-Jacques Morin said.

Reinventing Accor’s loyalty program

On February 21, AccorHotels announced the launch of a new lifestyle loyalty program, dubbed ALL, which stands for Accor Live Limitless.

Plans call for merging Le Club Accor and the accorhotels.com program into ALL by the end of 2019.

Centralizing the group’s existing programs stands to create an even better experience for its guests. Accor will also launch a new website and app to accompany it.

These new initiatives will create a comprehensive experience for guests that simplifies service.

 

Here is a TOPHOTELCONSTRUCTION infographic detailing Accor’s global hotel pipeline

 

Let’s take a look at a few other projects currently underway by Accor:

 

Fairmont Abu Dhabi Marina Hotel & Residences 

 

Swissotel Jakarta Pik Avenue 

 

Sofitel Riyadh – King Abdullah Foundation Hotel 

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