Accor S.A.

Overview Key strengths Key risks As the largest hotel operator in Europe, Accor S.A.'s portfolio includes over 821,518 rooms worldwide, as of Dec. 31, 2023. Its operating leverage is relatively high due to its meaningful exposure to the managed portfolio (about 55% of total rooms). It has a well-known and diversified brand portfolio globally and across its two divisions: premium, midscale, and economy on the one hand, and luxury and lifestyle on the other. The lodging and hospitality industry is cyclical and exposed to international mobility, reflecting reliance on airline and travel industries. The asset-light operating model is credit positive as it implies very limited exposure to real estate assets or leases. The leisure portfolio is highly dependent on consumer

...Accor reported sound operating performance in 2023 and we expect this will continue in the medium term despite ongoing macroeconomic volatility. Revenue of 5.05 billion was up 19.7% from 2022 and S&P Global Ratings-adjusted EBITDA of 1.01 billion surpassed the 870 million of 2019, exceeding our base case expectations. Accor's S&P Global Ratings-adjusted EBITDA margin improved to 20% in 2023 (16.2% in 2022). These strong results are being supported by continued growth in leisure travel demand along with a steady uplift in business travel. This resulted in a significant improvement in revenue per available room (RevPAR) across regions and segments, up 23% against 2022. Average daily rates (ADRs) were up 11.8% in 2023 compared to 2022 and occupancy levels improved to 66% in 2023 (60% in 2022). In line with second-half 2023 trends, we expect ADR growth to plateau in 2024 amid continued macroeconomic volatility, but occupancy could improve further supported by business travel returning closer...

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