Skift Take
Isn’t hosting the Olympics supposed to be a gold mine for hotels? Not for France, at least. Accor warned that it didn’t expect a “massive financial uplift” from Paris hosting the Summer Olympic Games.
Accor, the Paris-based hotel operator, earns about a fifth of its revenue from France. So analysts have been eyeing possible impacts from Paris hosting the 2024 Summer Olympic Games for three weeks across July and August.
Accor, which runs 45 brands including Ibis, Pullman, and Raffles, cautioned Thursday that it “didn’t plan for a massive financial uplift” from the Games.
“We expect a bit of an uplift,” said Martine Gerow, chief financial officer, during an earnings call. “So far, the bookings align with what we expected for the summer. We expect some pickup as the Olympic Committee releases more tickets.”
“The way we think about the Olympics is that it produces roughly 2 [percentage] points improvement in revenues for [Accor’s French market],” Gerow said.
Accor is watching for a potential surge in bookings during the most popular events. But it’s also watching for a possible decline in bookings during the “shoulder” periods before and after the Olympics because some non-fans of the Games may choose to avoid the Paris region out of congestion fears.
Accor’s gain in its revenue-per-available-room may be roughly between 40 and 50 basis points for full-year, group-wide results.
Higher-than-usual pricing during the Olympics may deter non-fans, or people traveling from far away, in Paris — or from transiting through Paris.
“We expect a strong demand from Europeans to France this summer because of the Olympic Games,” Gerow said. “Conversely, we may have a stronger demand from Americans before the Olympics and after.”
The French group is a major sponsor of the event in Paris.
“A lot of people have been critiquing the French in terms of service and on being welcoming instead of obnoxious, arrogant, and this is a time to prove exactly the opposite,” said Group CEO Sébastian Bazin, when speaking two weeks ago on CNBC. “We can smile, we can welcome people, we can be generous, warm, responsive — which is who we are.”
Looking at the summer as a whole and across France as a whole, 2024 should be overall about the same as in 2023, “which was a pretty robust year, especially from American travelers,” Gerow said.
Accor’s first-quarter
- Accor said revenue in the first three months of the year rose to $1.33 billion, up 16% from the previous year.
- Accor’s revenue per available room, rose nearly 8% year-over-year to about $71 in the quarter.
Accommodations Sector Stock Index Performance Year-to-Date
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