Accor's Premium Segment and Geographical Focused Strategy Supports Its Brand Advantage

While inflation presents near-term demand headwinds, we expect Accor to expand share in the hotel industry over the next decade as a result of its solid loyalty membership of 89 million and increasing exposure to the premium, luxury, and lifestyle segments, supporting its intangible brand asset advantage, the source of its narrow moat. Accor's growing room share is being driven by an increased presence in higher-end luxury/premium upscale rooms, which were 27% of its total in 2022. This higher luxury presence diversifies Accor from its core economy/midscale exposure, which more directly competes against Airbnb and other alternative accommodations. Overall, we see Accor posting 3% unit growth on average over the next 10 years, well above the roughly 1% long-term industry rate in its core European region (43% of total rooms in 2022).