By Mateusz Rabiega
(Reuters) -Europe’s biggest hotel group Accor upgraded its core profit guidance on Thursday and said that it planned to buy back shares worth 100 million euros ($117 million) in the fourth quarter.
However, the operator of brands including Ibis and Novotel reported quarterly revenues which narrowly missed market expectations after its results were impacted by negative currency movements.
Accor said that it now aims to grow its earnings before interest, taxes, depreciation and amortisation (EBITDA) by 11%-12% in 2025 based upon constant currency rates, compared to previous guidance of between 9%-10%.
The hospitality sector has been experiencing economic and geopolitical disruptions, with Accor pointing to security concerns in Thailand and a sluggish recovery in China.
Accor’s rival Hilton on Wednesday trimmed its revenue target over inflation worries among its U.S. consumers, while peer IHG also saw weaker performance in the U.S.
Accor said it is committed to its expansion strategy despite those risks.
“The volatility of the geopolitical situation does not affect our development strategy”, CFO Martine Gerow said on a conference call, referring to the key Middle East region.
The company’s third-quarter revenue fell by nearly 5% year-on-year to 1.37 billion euros, slightly below the 1.4 billion forecast by analysts in a company-compiled consensus
Revenue per available room (RevPAR), one of the industry’s main performance indicators, was in line with the average forecast of 0.8% growth.
“The group’s profit protection measures are proving effective… this is the rationale behind the launch of a new share buyback program”, Accor’s Chairman and CEO Sébastien Bazin said in the statement.
The buyback comes on top of two completed tranches for total value of 440 million euros.
The company also confirmed that it is considering listing its lifestyle hotel brand Ennismore, adding only that, if the potential listing materialises, Accor would remain its majority shareholder. No further details were provided.
($1 = 0.8575 euros)
(Reporting by Mateusz Rabiega; Editing by Matt Scuffham)
