Accor Reports Quarterly Revenue Down 5.8 Percent

Accor reported first quarter 2009 revenue was down 5.8 percent like-for-like. Consolidated revenue for the first three months of 2009 totaled 1.616 billion euros, down 5.8 percent over the same period of 2008 and down 9.6 percent on a reported basis.

First-quarter 2009 revenue performance reflects the impact of the strategic refocusing on the hotels and prepaid services businesses (with the disposal of the Brazilian food services operations) and the continued deployment of the “asset-right” strategy, which had a negative 6.4 percent impact on revenue for the period.

The expansion strategy added 4.1 percent to growth for the quarter, which included 45 million euros from the full consolidation of Orbis). The negative 1.5 percent currency effect resulted from the appreciation of the euro against the British pound, the Australian dollar and the Brazilian real. On the upside, the dollar impact was a positive 1.1 percent.

In the upscale and midscale segment, revenue was down 9.2 percent as reported for the period. In general, the midscale segment was relatively less affected than the upscale segment. This was the case in France, where RevPAR declined 10.1 percent in the midscale and 13.4 percent in the upscale.

Moreover, business in Paris was more affected than in the rest of the country, with RevPAR down 14.7 percent in the capital versus 6.6 percent elsewhere. In Germany, revenue declined by 1.9 percent like-for-like over the period, or by 8.1 percent adjusted for the shift in the Easter vacation period.

In the United Kingdom, business was harder hit outside London, with RevPAR down 16.5 percent, than in London, down 7 percent. Economy hotels outside the U.S. were down 6.8 percent like-for-like. RevPAR volatility in this segment is typically around twice the change in GDP, which is notably lower than in the upscale and midscale segments.

The economy segment experienced an 11.5 percent decline like-for-like, but remained less affected than the upscale and midscale segments in the United States. Furthermore, Motel 6 outperformed its competitive-set, in a segment that saw a decline in business for the second year in a row. The opening of approximately 50 hotels in 2008 drove a 19.4 percent increase in fees from franchised hotels during the first quarter on 2009.