Accor: post-Covid uplift gives Ibis a chance to soar

Receive free Accor SA updates

We’ll send you a myFT Daily Digest email rounding up the latest Accor SA news every morning.

Hotel groups are in a buoyant mood as tourism continues to bounce back from the pandemic. Their bullishness is apparent in expansion plans published by Accor recently.

The Paris-listed owner of the affordable Novotel and Ibis brands intends to open more than 1,200 hotels over five years. People are keen to travel despite the current high cost of living. Accor’s shares have rallied more than 40 per cent so far this year.

Accor already has nearly 5,500 hotels. The majority are owned by someone else. Accor manages them for a fee or owners pay to operate within the franchise. Normally half of Accor’s growth comes from switching hotels to its brands rather than from new builds.

Larger British rival InterContinental Hotels Group, an earlier convert to the same “asset light” model, plans to add 1,900 hotels to its stable of more than 6,000 premises. Smaller groups such as Spain’s Melia hotels have announced their own modest growth plans.

But has the industry drunk too much of its own punch?

The evidence suggests not. Global industry revenue per available room — a key measure of demand — recovered last year to $73.9, from $50.7 in 2021, according to consultancy STR. However, revpar remains below the 2019 level of $79.7.

That points to headroom for rises if left-field events such as wars or financial shocks do not spoil the party.

Accor recently set an ebitda target of €920mn to €960mn for 2023, compared with €675mn last year. Visible Alpha consensus previously pointed to 2023 ebitda of €933.7mn.

The company’s shares have had a good run lately after a bumpy 10 years. Accor’s strategy has caused frustration with investors, although it is now a slicker business than when chief executive Sébastien Bazin checked in.

Accor trades at a discount to rivals. Its forward enterprise value to ebitda multiple of 10.7 times remains behind a pre-Covid average of 11.6 times, according to Barclays. Accor looks like a cheap way for investors to join in the post-pandemic tourism festival.