Accor reveals major profit upswing for 1H2023

Accor reported last week that it had seen a major profit surge for the first half of 2023, crediting the figures to the pricing strategy of rooms.

Earnings show a major upswing in revenue for the hospitality group, seeing around AUD $410m in net profit, a 676 per cent jump year on year and revenue rose 35 per cent up to around AUD $2b.

“This momentum should continue for the coming months, driven by robust demand in both leisure and business tourism,” CEO and chairman, Accor, Sébastien Bazin, told Skift.

Heavily inflated operational costs have plagued many industries over the course of the last 12-18 months, however, Accor combatted the trend by effectively pricing its rooms to take rising costs into account, possibly better than other leading chains, as is reflected in Accor’s 1H23 earnings.

Out of all Accor offerings, the premium brands saw the best performance. The luxury and lifestyle division which accounts for around 60 per cent of the company’s earnings also saw a major increase in revenue of 40 per cent.

Asia Pacific and the Middle East were the leading regions with revenue per available room up 51 per cent, Europe and North Africa rose 32 per cent, while the Americas saw a 35 per cent increase, largely related to increased interest in Brazil.

In order to keep profits high, Accor is looking to lighten its asset portfolio, recently selling its headquarters for over AUD $700m.

The group is also ‘cutting the fat’ by pulling underperforming hotels from the portfolio. At the end of June 23, Accor had an inventory of 5,487 properties and expects to grow its room offerings by 2-3 per cent each year, down from the recently set target of between 3 and 5 per cent each year.