Accor Hotel Earnings: Strong Travel Demand Set To Continue This Year; Shares Attractive

The main takeaway from narrow-moat Acco's first-quarter sales update was that revenue per available room, or revPAR, growth is now expected to rise a low-double-digit percentage in 2023 versus a 5%-9% lift expected previously. Against easier year-ago comparisons (due to Omicron) first-quarter revPAR grew 57%, slightly ahead of our 54% estimate, and representing 119% of the comparable 2019 period. Specifically, Asia Pacific (27% of total room revenue) revPAR jumped 77%, as countries such as China (about 5% of total room revenue) have recently reduced COVID-19-related travel restrictions. We plan to lift our 2023 revPAR forecast to 14% from 5%, increasing our EUR 40 per share fair value estimate by a mid-single-digit percentage. Trading at around 12 times 2023 EV/EBITDA we see shares as undervalued relative to the 15 times of similarly positioned narrow-moat peers.