Press Release

Paris, April 20, 2017 Robust growth in first-quarter 2017 revenue: like-for-like increase of 7.4% Sébastien Bazin, Chairman and Chief Executive Officer of AccorHotels, said:

"The trends observed in the first quarter in the vast majority of regions reflect a favorable environment for the hotel industry. This is particularly the case in our three main markets, France, Europe and the Asia-Pacific region. The new businesses also performed well, thanks in part to the support of AccorHotels. At the same time, the Group further entrenched its growth, its move into new businesses and its leadership in the luxury segment through numerous value-creating acquisitions, namely Rixos and BHG in hotels, and Availpro, Potel & Chabot and VeryChic in new businesses. Lastly, the process of transforming AccorInvest into a subsidiary is underway; AccorHotels is therefore perfectly in line with our 2017 objectives."

Consolidated first-quarter 2017 revenue totaled €425 million, up 35.4% as reported and 7.4% on a like-for-like basis.

Changes in the scope of consolidation (acquisitions and disposals) made a positive contribution of €82 million (+26%), thanks in particular to the contributions of Raffles, Fairmont, Swissotel, onefinestay and John Paul.

Currency effects had a positive impact of €6 million, attributable primarily to the Brazilian real (+€8.2 million) and the Australian dollar (+€4.3 million).

During the first quarter, AccorHotels' development represented 35 hotels and more than 7,000 rooms. As of March 31, 2017, the Group's pipeline amounted to 951 hotels and 176,000 rooms.

On July 12, 2016, AccorHotels announced its intention to turn HotelInvest into a subsidiary and dispose of a majority of it, united under AccorInvest, in the summer of 2017. 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)
  • Hotel assets, which include HotelInvest assets not transferred to AccorInvest, mainly corresponding to Orbis, hotels operated under lease agreements based on a percentage of EBITDAR (with no minimum guarantee, also known as management leases) and the remainder of the assets intended to be restructured before the Booster transaction closes.

    HotelServices is now organized into six operating regions:

  • France & Switzerland

  • Europe (including Southern Europe)

  • Middle East & Africa

  • Asia-Pacific

  • North America, Central America & the Caribbean

  • South America

SOLID GROWTH IN REVENUE

With strong growth for HotelServices (+5.6%) and the new businesses (concierge services, luxury home rentals and digital services for independent hotel operators, +10.4%), the Group recorded revenue growth of 7.4% at constant scope of consolidation and exchange rates (LFL) in the first quarter of 2017, despite the loss of one day of business compared with the first quarter of 2016. Revenue derived from the hotel assets held by the Group, mainly in Central Europe and under lease in Brazil, also grew in first-quarter 2017, by 5.8%.

In €millions Q 1 2 0 16 Q 1 2 0 17 Change (a s re porte d)

Cha nge

(LFL)

HotelServices 295 394 +33.6% +5.6%

New businesses 5 13 N/A +10.4%

Hotel assets 118 129 +9.8% +5.8%

Holding &

(104) (112) N/A N/A

Interc os

Tota l 3 14 425 + 3 5 . 4 % + 7 . 4 %

POSITIVE MOMENTUM FOR HOTELSERVICES HotelServices, which operated 4,158 hotels (586,578 rooms) under franchise agreements and management contracts at the end of March 2017, reported a 34% increase in revenue as reported to €394 million. This growth reflected the combined impact of very strong business levels in the majority of regions, favorable comparison bases, notably in France and Belgium, and, to a lesser extent, the shift of the Easter vacation period to April.

Q1 2016

Q1 2017

Change

(LFL)

76

77

-0.6%

77

85

+8.4%

23

30

+1.9%

91

117

+10.6%

8

36

+0.1%

15

17

-10.6%

6

32

+34.6%

295

394

+5.6%

In € millions

France & Switzerland Europe

Middle East & Africa (MEA) Asia-Pacific

North America, Central America & the Caribbean South America

Worldwide structures

Total(1)

Consolidated RevPAR was up 5%.

In France & Switzerland, revenue was down 0.6% on a like-for-like basis. The decline was attributable in particular to the loss of one business day and to the conversion of around 60 Grape Hospitality hotels into franchised hotels in June 2016. However, RevPAR was up sharply (+5.0%), driven by a 2.7 point increase in the occupancy rate combined with stable prices.

  • The strongest growth was observed in Paris, particularly in the leisure segment (+9%), while business stays increased by 5%.

  • Business in cities other than Paris benefited from the World Handball Cup and a rich events calendar.

    Europe posted strong revenue growth (+8.4% like-for-like), driven by RevPAR growth of 7.4%, all segments combined.

  • In the United Kingdom, business remained very brisk (+9.2%), benefiting from the depreciation of the pound sterling, which notably led the British to favor local destinations. In London, there was a marked recovery in the leisure segment, both local and international, with a very pronounced increase in travelers coming from Asia and North America. At the same time, the business travel segment remained very solid.

  • RevPAR increased by 7.1% in Germany, thanks notably to a favorable trade fair calendar in the first quarter. RevPAR in Eastern Europe grew by 9.4%,

supported by an economy that is booming across the entire region and by the renovations carried out in 2016.

- The Iberian Peninsula continued its recovery, recording strong business levels once again, with RevPAR growth of 11.4%.

The Middle East & Africa region recorded a 1.9% increase in revenue, with performances varying significantly between Morocco and Dubai, which were very sound, and the more challenging markets, such as the Emirates, Saudi Arabia, Angola and Algeria, which are sensitive to oil prices.

The Asia-Pacific region performed very well, posting 10.6% growth driven by the luxury segment (RevPAR up 6.4%) and persistently fast development.

North America, Central America & the Caribbean remained strong despite the notable decline in arrivals of foreign tourists in the United States' major cities. AccorHotels benefits from the well-balanced spread of Fairmont hotels across the United States and Canada, and a strong presence in US cities less exposed to international customers. As a result, regional RevPAR grew by 3.6%. The 0.1% like-for-like increase in revenue does not include Fairmont; it only takes into account the hotels included in the scope of consolidation in Q1 2016, which are more exposed to markets such as New York and Miami.

Lastly, the situation remains difficult in South America, and more precisely in Brazil. Regional revenue was down 10.6%, with Rio facing a particularly challenging situation (RevPAR down 32% across the city), reflecting the overcapacity generated by the Olympic Games and a depressed socioeconomic environment.

The Group's development continues at a rapid pace. During the first quarter, AccorHotels opened 35 hotels, representing more than 7,000 rooms. At the end of March 2017, the Group's pipeline comprised 951 hotels and 176,000 rooms, of which 82% in emerging markets and 45% in the Asia-Pacific region.

SUSTAINED GROWTH IN NEW BUSINESSES

In the three months to end-March 2017, revenue from the new businesses (concierge services, luxury home rentals and digital services for independent hotels) amounted to €13 million, compared with €5 million in first-quarter 2016, thanks to the consolidation of John Paul and onefinestay.

DIGITAL SERVICES FOR INDEPENDENT HOTELS

Fastbooking, whose business consists of offering independent hotel operators digital solutions to help boost their direct sales, posted organic growth of 10.4% on a like-for-like basis. In this segment, the acquisition of Availpro, announced on April 5, will round out the suite of products and services offered to hotel

Accor SA published this content on 20 April 2017 and is solely responsible for the information contained herein.
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