By Anait Miridzhanian
(Reuters) -Europe’s biggest hotel group Accor said on Thursday it was “well on the way” to more normal levels of activity this year after its core earnings swung back to profit in 2021, helped by higher absorption of fixed costs.
The travel and hospitality industry is still recovering from the pandemic while European countries make plans to ease COVID-19 restrictions due to a drop in coronavirus infections.
Accor, which runs high-end chains Sofitel and Pullman, as well as budget brands such as Ibis, said its business had started to recover in April despite the impact from the pandemic, leading to a significant pick up in activity.
The rebound paused in January due to the Omicron variant outbreak, but the month of February represented “a turning point”, the French hotelier said.
By the end of 2021, average room rates came close to or even exceeded pre-COVID-19 levels thanks to an improvement in demand, Accor said.
It flagged an impressive recovery in the Middle East region, which has benefitted from the world’s fair Expo 2020 in Dubai.
Deputy CEO Jean-Jacques Morin told journalists the group owned seven hotels in Ukraine and about 55 in Russia, when asked about the ongoing crisis.
“We will follow last night’s situation but the direct impact is very limited,” Morin said.
The group posted full-year earnings before interest, taxes, depreciation and amortisation (EBITDA) of 22 million euros ($24.69 million), bouncing back from a loss of 391 million a year earlier.
The group’s revenue per available room (RevPAR), a key gauge of performance for the hotel industry, was down 46% in 2021 compared with the pre-pandemic level in 2019, reflecting the resurgence of the COVID-19 pandemic.
For 2022, the group forecast a 3.5% net growth in its hotels network against a 3% growth last year.
Accor shares fell more than 2% to around 31 euros at 0810 GMT while France’s SBF 120 index is down over 3%.
($1 = 0.8912 euros)
(Reporting by Anait Miridzhanian; editing by Milla Nissi)
