Accor Q1 2025 Earnings: Resilient Growth Amid Softer Corporate Demand

Accor delivered a solid financial performance in Q1 2025, with revenue reaching €1.35 billion and RevPAR increasing by 5.0% year-over-year. This growth was mainly price-driven, with occupancy contributing marginally. While corporate demand remained stable, it exhibited softening trends, particularly among individual business travelers, due to rising costs and cautious spending in sectors like tech and finance. The company’s diversified footprint, strong brand portfolio, and luxury-driven expansion strategy helped offset geographic and segment-specific volatility.

Solid Financial Performance Anchored by Pricing Power

Accor posted a 9.2% increase in revenue for Q1 2025, totaling €1,349 million, supported by continued strength in leisure and group travel. RevPAR rose 5.0% over Q1 2024 to €72, with 80–90% of the growth driven by higher pricing. While occupancy improved only modestly, up one percentage point to 61%—still 3 points below pre-pandemic levels.

The Premium, Midscale, and Economy (PM&E) division recorded a 3.4% RevPAR increase to €58, while the Luxury & Lifestyle (L&L) division outperformed significantly with 8.3% RevPAR growth to €105. Accor opened 45 hotels and added over 5,900 rooms this quarter, bringing its global network to 5,695 hotels and 847,290 rooms. Its development pipeline expanded to over 235,000 rooms across 1,388 properties, focusing on high-growth markets like Saudi Arabia and India.

Corporate Travel: Stable, But Signs of Softness Emerge

Corporate travel demand remained steady in Q1 but showed early signs of softness, particularly in the transient segment. CFO Martine Gerow noted during the earnings call that group bookings remained strong. Still, individual business travel lagged, influenced by economic caution in key European markets like France and the UK, where corporate clients are increasingly opting for shorter, budget-conscious trips.

This softening likely reflects broader inflationary pressures and corporate belt-tightening, particularly in the tech and finance sectors, which dominate European business travel. While pricing held firm, limited occupancy gains suggest that some companies are moderating travel budgets or shifting to virtual alternatives for non-essential meetings.

Regional Trends: Americas Surge, Europe Mixed, APAC Cautious

Americas: The region led growth with a 13.1% RevPAR increase to €95, primarily driven by Brazil’s post-carnival boom and Canada’s rising corporate and group bookings. Occupancy there rose 3.1 percentage points to 57.5%, approaching 2019 levels.

Europe, Middle East & North Africa (EMENA): Results were mixed. France and the UK recorded RevPAR declines of 2.5% and 1.8%, respectively, attributed to weaker corporate activity and competitive pressures from short-term rental platforms. Germany saw moderate gains of 3.2%. Easter calendar shifts to April affected March performance, though April and May booking trends indicate a rebound.

Middle East, Africa, and Asia-Pacific (MEASP): RevPAR in this region rose 4.6% to €82, driven by strong performance in Saudi Arabia and Southeast Asia. However, Chinese domestic tourism slowed as outbound travel increased, diluting RevPAR gains from the region’s largest outbound market.

Segment Analysis: Luxury and Lifestyle Outperform

Accor’s dual-division strategy produced divergent results:

• Luxury & Lifestyle (L&L) revenue rose 17.9%. RevPAR grew 8.3% to €105, with notable strength in resort properties across Turkey, Egypt, and the UAE. The Luxury segment—75% of L&L’s revenue—posted 9.0% RevPAR growth, bolstered by high-net-worth leisure travelers.
• The PM&E Division delivered 1.8% revenue growth and a 3.4% RevPAR increase to €58. Growth was mainly driven by pricing, while occupancy gains were minimal. Economy hotels in Europe faced the most pressure, with RevPAR flat at €45.

Strategic Growth: Development, Brand Expansion, and Innovation

Accor reaffirmed its mid-term growth outlook, pointing to strong brand traction and geographic diversification. Notable developments this quarter included:

• The relaunch of Orient Express with new properties in Rome and Lake Como, targeting ultra-luxury travelers.
• There is strong pipeline momentum in the Middle East, Africa, and Asia-Pacific, where over 60% of new rooms are expected to open in the next 18 months, particularly in Saudi Arabia and India.
• Continued focus on modular construction and sustainable design in urban and resort markets, aligning with eco-conscious travel trends.

The company reiterated that its cost structure remains highly flexible, giving it resilience against moderate RevPAR volatility.

Management Outlook and Booking Visibility

CEO Sébastien Bazin stated, “Accor has once again posted dynamic growth in its business this quarter, driven by continued strong demand. Our diversified geographic positioning and leadership in the most promising markets enable us to continue to grow in a more volatile geopolitical and economic environment.”

After a slower March, April and May bookings have returned to positive trends, with leisure and group segments leading the recovery. However, executives acknowledged that visibility beyond Q2 remains limited as travelers book closer to travel dates—a pattern now typical in the post-pandemic environment.

 Signs of Maturity in the Recovery Cycle

Accor’s Q1 results highlight the company’s agility and market positioning in an increasingly bifurcated travel landscape. While luxury and leisure travel continues to anchor revenue, corporate travel is becoming more variable, influenced by macroeconomic sentiment and cost discipline.

Investors should monitor corporate booking trends in Q2, as sustained softness could pressure PM&E margins, particularly in Europe, where economy hotels are already underperforming. However, Accor’s luxury segment offers a substantial buffer, and its pipeline in high-growth markets like the Middle East positions it well for long-term value creation.

Company Snapshot: Accor (Q1 2025)