PARIS (Reuters) - Accor (ACCP.PA), Europe’s largest hotel group, said on Tuesday it had yet to see demand for hotel rooms reflect signs of an economic slowdown and expected steady growth to continue in the fourth quarter.
The world’s fourth-largest hotel group kept its outlook for a rise of up to 19 percent in its core operating profit this year as it posted a 2.7 percent increase in third-quarter sales, in line with forecasts.
The French company, which owns 4,200 hotels worldwide, said higher occupancy rates and a gradual recovery in average room rates should lift full-year 2011 earnings before interest and tax (EBIT) to between 510 million and 530 million euros, up from 446 million in 2010.
Chief Financial Officer Sophie Stabile told a conference call that bookings were on a “positive” trend, showing no signs of slowing down at least through year-end.
Investors have been keen to hear about booking prospects amid growing fears that a global recession could dampen business and holiday travel.
Accor gets 70 percent of its bookings from business travelers.
Barclays Capital analysts said in a recent note that they were turning “increasingly cautious” on the hotels sector, expecting a weakening in revenue per available room (RevPAR) to “materialize toward the end of 2011/early 2012.”
Earlier this month, Marriott International Inc’s MAR.N third-quarter profit beat market expectations but it gave a cautious forecast for 2012.
Starwood Hotels reports its third quarter on October 27 and InterContinental Hotels (IHG.L) reports on November 8.
Accor’s third-quarter sales reached 1.623 billion euros ($2.22 billion), broadly in line with a 1.622 billion euros forecast in a Reuters poll of 5 analysts.
Hotel revenue grew 6.8 percent in the quarter on a like-for-like basis, with economy hotels showing the fastest growth, led by strong demand and a robust increase in average room rate.
France was one of the most dynamic markets in Europe, with like-for-like increases of 6.7 percent in the upscale and midscale segment and 7.1 percent growth in economy.
Revenue in the United States, where Accor owns the troubled Motel 6 chain, rose 5.1 percent in the quarter, led by a 1.8 percent rise in occupancy rates and a 1.7 percent rise in average room rates.
With operations in 90 countries and hotels ranging from the luxury Sofitel chain to the budget Ibis and Motel 6 operations, Accor has a market value of 5 billion euros.
Accor’s shares have lost 33 percent this year, underperforming the STOXX Europe 600 travel and leisure sector index .SXTP which is down 20 percent. ($1 = 0.731 Euros)
Reporting by Dominique Vidalon; Editing by Christian Plumb and Helen Massy-Beresford