Accor plans to add more than 1,200 hotels

(Reuters) -Accor plans to open more than 1,200 hotels in the next five years, increasing the number of its resorts by more than one-fifth, Europe’s biggest hotel group said on Tuesday.

The hotel industry has benefited from higher prices and a rebound in travel demand in the wake of the pandemic, with consumers rushing to travel even as rising interest rates stoke fears of a recession and inflation erodes household purchasing power.

Accor also raised its outlook at its capital markets day, forecasting its 2023 revenue per room (RevPAR) to grow by 15% to 20% amid reorganisation plans that were implemented in January.

The firm expects core earnings before interests, taxes, depreciation and amortisation (EBITDA) this year of 920-960 million euros ($1.01-$1.05 billion).

Chief Executive Officer Sébastien Bazin attributes the growth to the “confirmation of a very broad international demand across the different countries, a summer that will be a good one based on current confirmation of booking occupancy, and therefore demand that is only growing in almost all the Group’s segments, in almost all geographies,” he said on a call.

The French-listed group aims to grow its EBITDA by 9-12% annually from 2023 through 2027.

Accor said it plans to return around 3 billion euros to shareholders in that period via dividends and share buybacks.

Shares were up 1.2% at 0703 GMT and have gained more than 40% year to date.

We expect a positive share price performance today and we will probably upgrade our recommendation on Accor as the updated mid-term guidance is stronger than expected,” said analyst Yi Zhong at AlphaValue.

“We mostly read the release positively today but flag a few points also in the 23E guidance that are less than expected. For us the most positive is the commitment to return cash to shareholders,” said a note from Barclays, which holds an “overweight” rating on the stock.

($1 = 0.9153 euros)

(Reporting by Tristan Veyet and Gaëlle Sheehan in Gdansk; editing by Sherry Jacob-Phillips)