Two years ago, Accor Group chairman and CEO Sébastien Bazin
joined the pandemic-era chorus of executives who predicted corporate travel
would never fully recover to 2019 levels, thanks to the growing acceptance of
remote conferencing tools. On Thursday, he formally retracted his projection.
“I was wrong,” Bazin said Thursday during Accor’s
fourth-quarter earnings call.
Like several executives inside and outside of the travel
industry, notably
Bill Gates, Bazin in 2022 suggested at least some of the corporate travel
cutbacks companies implemented during the Covid-19 pandemic were permanent. Bazin
at the time suggested projections that international business travel would
remain at least 20 percent below pre-pandemic levels “could probably last
forever” because “of our capacity via Zoom, WebEx and Teams to be
able to connect yourself without going onto a very long journey” compared
with “the agony of crossing the frontiers with all the paperwork you will
have to do.”
I was wrong three years ago when I said we’re probably going to stand to lose 25 percent of corporate travel forever because of this ability to work remotely.”
Accor CEO Sebastien Bazin
Thursday, he sang a different tune. “I was wrong three
years ago when I said we’re probably going to stand to lose 25 percent of
corporate travel forever because of this ability to work remotely,” Bazin
said. “We are already at 90 percent of the level of 2019. So they’re not
only coming back, but they’re coming back much quicker than I ever expected.”
Bazin projected an additional average 8 percent
year-over-year increase in 2024 business travel spending “from major
corporate organizations.”
Still, he noted the nature of post-pandemic business travel
has changed from the past.
“It’s a different mix,”
Bazin said. “It’s less people going alone from Seattle to Singapore, it’s
less people having 500 [attendee] seminar organization groups. It’s spread over
10 cities of 50 people each and they go on Microsoft and all the systems where
they can regroup together, even though they are in different locations. So
smaller groups, greater numbers of small and medium-sized enterprises, but it
is a very strong component of Accor and the rest of my peers.”
Accor’s Q4 Performance
Accor’s systemwide fourth-quarter revenue per available room
increased 11.1 percent year over year to €73, while average daily rate
increased 6.7 percent to €111 and occupancy increased 2.6 percentage points to
65.8 percent. Full-year 2023 systemwide RevPAR increased 22.7 percent year over
year to €73, while ADR increased 11.8 percent to €110 and occupancy grew 6
percentage points to 66 percent.
Total 2023 Accor revenue increased 20 percent year over
year—18 percent on a like-for-like basis at constant currency—to nearly €5.1
billion. Earnings before interest, taxes, depreciation and amortization
increased 49 percent year over year (55 percent like-for-like) to €1 billion.
The company projected a compound annualized RevPAR increase
of 3 percent to 4 percent through 2027. January 2024 systemwide RevPAR was
“solid” and “in line with our expectations,” said Accor CFO
Martine Gerow on the call.
