Accor Guarantees US-China Trade War Won’t Stop Expansion
The trade war between the US and China has affected a lot of countries and industries in those countries, including the hospitality industry. The Paris-based hotelier Accor guaranteed its clients that it will not fall into poor performance, according to Skift. The company made the announcement only a week after Hilton announced that the dispute weighed heavily on the overall revenue per available room growth, or the RevPAR.
Accord did admit that the dispute damaged its business in the conflict-ridden region, weighing down Chinese company earnings as well as profit from their hotels in the greater Asia-Pacific region during the first half of the year.
Deputy CEO Jean-Jacques Morin revealed in Accor's Wednesday earnings call that RevPAR in China was down to 1.3%. The RevPAR for the Asia-Pacific region fell by 0.2%. Australian results were in the negative, although political tensions in the country have also contributed to the low ratings that their regional company endured.
The company said that the poor trade climate of the region will note affect their expansion. China and the Asia-Pacific market remained a market of key growth for the hotelier, they said, and it still believes that an opportunity lies in the rise of Chinese travelers.
Accor's first half 2019 results came out better than they have expected. Hotel Business reported the company turned in a report for a solid first half with objectives set for the second half. The group is currently focused on creating a sustained development. Sebastien Bazin, chairman and CEO of Accor, revealed this and more, saying that their execution for 2019 remained on track.
Net profit before profit from discontinued operations was revealed to have climbed up to $138 million. The group share's net profit, meanwhile, climbed up to $155 million. When compared to the same period in 2018, the sale of 58% of the capital of AccorInvest added a capital gain of around $2.6 billion to the company.
Accor had a group of acquisitions during the first quarter. They received 18,589 rooms from 149 hotels during that period. This made their portfolio climb up to 717,314 rooms in 4,982 hotels with a pipeline of 202,000 rooms across 1,153 hotels by June 30.
Accor's RevPAR effectively climbed up to a 2.9 percent increase overall, with sharp growth in home markets that have been profitable to them. European and South American profits turned in a 4.4% and 13.8% improvement, respectively.