Accor to Benefit From a Further Recovery in International Travel Demand

While inflation and slow economic growth present near-term demand headwinds, we expect Accor to expand its share in the hotel industry over the next decade as a result of its solid loyalty membership of around 90 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 and premium rooms, which was 23% of its total in 2023. This higher luxury presence diversifies Accor from its core economy/midscale exposure, which more directly competes against narrow-moat 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 Europe and North African region (44% of total rooms in 2023).