Accor : Like-for-like third-quarter 2017 revenue up 6.4% to €504 million

Press Release

"AccorHotels delivered another robust performance in the third quarter. The positive operating trends observed in our key markets in the first half were confirmed, and early signs of a recovery emerged in Latin America. The Group continued its rapid development. In the course of the quarter, our hotel base crossed the symbolic mark of 600,000 rooms and our pipeline reached a record level, reflecting the increasingly strong attractiveness of our brand portfolio, which now includes Orient Express and Nextdoor, and will soon extend to Mantra, BreakFree and Peppers. This favorable trend is expected to continue until the end of the year, allowing us to reach the upper end of the target EBIT range announced in July."

• Sustained growth in all of the Group's markets

• Opening of 73 hotels and more than 11,000 rooms

• More than 600,000 rooms opened and a record pipeline of 178,000 rooms

• Signing of agreements for the acquisition of Gekko and Mantra Group

• Partnership with SNCF for the development of Orient Express

• Partnership with Bouygues Immobilier for the development of Nextdoor

On July 12, 2016, AccorHotels announced its intention to turn HotelInvest into a subsidiary and dispose of the majority of it, united under AccorInvest. In accordance with IFRS 5, the assets held for sale have been placed in a separate item on the balance sheet and in the income and cash flow statements. The 2017 data presented in this press release reflect this accounting treatment.

Accordingly, the Group is now structured around the following business lines:

• HotelServices, which houses the hotel franchisor and operator business, as well as activities related to hotel operations.
• New businesses, at this stage combining FastBooking, onefinestay and John Paul (previously part of HotelServices), as well as Availpro, VeryChic, TravelKeys and SquareBreak, consolidated since the current half-year.
• Hotel assets, which include HotelInvest assets not transferred to AccorInvest, mainly corresponding to Orbis, and hotels operated under lease agreements based on a percentage of EBITDAR (with no minimum guarantee, also known as management leases).

With solid growth for HotelServices (+3.5%) and the New Businesses (concierge services, luxury home rentals and digital services for independent hotel operators, +5.6%), the Group recorded revenue growth of 6.4% at constant scope of consolidation and exchange rates (LFL) in the third quarter of 2017. Revenue derived from the hotel assets held by the Group, mainly in Central Europe and Brazil, grew by a substantial 7.2%.

€18.7 million (+4.0%) to revenue growth, thanks in particular to the New Businesses.

In € millions

France & Switzerland Europe

Middle East & Africa (MEA) Asia-Pacific

North America, Central America & the Caribbean South America

Worldwide structures

Total

Consolidated RevPAR was up 4.5%.

In France & Switzerland, revenue was up 2.3% on a like-for-like basis. This growth reflects sound levels of business, with RevPAR up sharply (+5.0%) driven by a 4.2-point increase in the occupancy rate, with a slight decline in prices (- 0.9%) partially offset by changes in the scope of consolidation, including the sale of 62 hotelF1 venues.

• Paris reported a strong increase in RevPAR (+6.6%), particularly in the leisure segment (+21%), while volumes of corporate room nights remained robust (+3%).

• Regions were also up (+3.8%), again with a pronounced recovery in the leisure segment (+6%), notably on the Côte d'Azur.

  Europe posted strong like-for-like revenue growth (+7.9%), driven by RevPAR growth of 7.8%, all segments combined.

• The United Kingdom performed very well, with RevPAR up 4% over the quarter. Performance was mixed between London (+0.9%), where the occupancy rate edged down, and Regions (+6.6%), with sustained business in most major cities driven by "staycations" as British holidaymakers opted for domestic stays in the wake of the decline in the sterling exchange rate.

• RevPAR increased by 2.9% in Germany, despite a weak trade fair calendar. Business was notably driven by the G20 meeting in Hamburg in July, not to mention the great success of the Munich Oktoberfest, a year after the attacks

that affected the Bavarian capital. RevPAR in Eastern Europe grew by 8.0%, supported by an economy that is booming across the entire region, notably in Hungary (+18.8%), and by the renovations carried out in 2016.

- The Iberian Peninsula continued its recovery, recording strong business levels once again, with RevPAR growth of 12.3%.

The Middle East & Africa region recorded a 1.2% increase in revenue, with contrasting situations between Morocco and Egypt, where business was very robust, and a significantly more complex environment in the Gulf region.

The Asia-Pacific region performed very well, posting 4.1% growth driven by the luxury and midscale segments (RevPAR up 6.2%) and persistently strong development.

Lastly, despite early signs of a recovery, the situation remains challenging in South America, and particularly in Brazil, notably in Rio. Revenue was down 15.3% across the region. However, there was an upturn in the average occupancy rate, which increased by 0.4 pt this quarter, ending a decline spanning three consecutive years.

The Group's development continues at a rapid pace. During the third quarter, AccorHotels opened 73 hotels, representing more than 11,000 rooms. This took the Group across the threshold of 600,000 rooms, notably with the opening of its 800th hotel in the Asia-Pacific region. At the end of September 2017, the Group's pipeline comprised 992 hotels and 178,000 rooms, of which 81% in emerging markets and 47% in the Asia-Pacific region. As indicated, organic development is expected to exceed 40,000 rooms in 2017, a record performance for the Group.