Welcome to the Accor Q3 2026 Revenue Presentation. Today's conference will be hosted by Martine Gerow , Group CFO. For the first part of the conference, the participants will be on listen-only mode. During the questions and answers session, participants are able to ask questions by dialing the pound key five on their telephone keypad. I will hand the conference over to the speakers. Please go ahead.
Good evening, ladies and gentlemen, and thank you for joining Accor's third quarter trading update call. I will start with a highlight on slide three. The activity rebounded strongly in the third quarter in several of our key markets, but also in the Middle East. This, combined with disciplined cost management, this performance enables us to upgrade our full-year 2026 EBITDA guidance. In Q3, RevPAR growth accelerated to 4.9%, with improved performance in several key markets and a much more limited impact from the Middle East, which was down only 3% in the quarter. Saudi and Egypt continued to perform well, and the UAE materially improved from the second quarter. Trading was solid in the mid-single digits throughout the summer, with a pickup in September, notably in Europe. Pricing continues to be the main driver of RevPAR growth, with occupancy stable at 71% in the quarter.
As in Q2, room revenue growth was driven by both business and leisure, with individual leisure travelers and business groups growing in the low double digits in the quarter. Net unit growth was 3% in the last 12 months as of the end of September. This reflects the combination of a schedule of opening, which is skewed towards Q4, and a base effect from the inclusion of a Mexican portfolio, which opened in September of last year. Pipeline growth remains very healthy at up 9.5% over the last 11 months, which supports an acceleration of net unit growth going forward. Revenue growth is also accelerating in the third quarter at 7.7% year over year at constant currency and 9.8% on a reported basis, with a positive two-point impact from FX in the quarter. Revenue reached EUR 1.503 billion in the third quarter.
M&F third quarter revenue was up a solid 5.5% at constant currency and 6.7% on a reported basis. On the back of this solid performance, combined with improvement in the Middle East, we have taken a more positive view of 2026. We now expect RevPAR to come at the high end of our 2%-2.5% guidance. We maintain tight cost discipline, and we are upgrading our recurring EBITDA guidance to EUR 1,270 million-EUR 1,285 million, reflecting the stronger RevPAR. We maintained a strong shareholder return pace with EUR 698 million year to date, which equates to a 6.2% return. Let's now move on to the third quarter of RevPAR for each division on slide four. Starting with PME, which posted a solid RevPAR growth of 3.2%, driven by pricing. As you can see here, rate was up 3.2%, and occupancy was steady in the quarter at 71%.
The Middle East, which was flat for PME and therefore almost neutral on the overall performance. ENA had a good summer with RevPAR up 2.5%, driven by pricing and occupancy to a lesser extent. All of our three largest markets posted low to mid-single -digit RevPAR growth, supported by a strong month of September with very robust event programming. In France, RevPAR was in the low single digit, accelerating in September with several events, including the famous Sales India residential tour, the Pope visit, and some corporate fairs. Both Paris and the Provence benefited. In Germany, demand turned positive during the summer, accelerating in September, supported by a strong event calendar and finishing the quarter with mid-single digit RevPAR growth. In the U.K., RevPAR growth remained steady in the low single digit, with the Provence slightly above London in this quarter.
In MEA APAC, Q3 RevPAR was up 3.6%, rebounding very strongly from the second quarter, and including a very limited impact of 40 basis points from the Middle East. Southeast Asia remains the growth engine of the region, with RevPAR in the high single-digit territory, with notably good performance in Japan, in Vietnam, in Indonesia, and in Thailand, which turned positive despite the recent flooding. In META, which includes Turkey, returned positive in the mid-single -digits with very solid growth in Turkey, in Egypt, and in Saudi Arabia. UAE RevPAR improved materially from the second quarter, with RevPAR down in the low 20s and occupancy back in the mid-60s. Pacific was up in the low single digits, mainly thanks to a supportive event calendar in September. In China, RevPAR stayed under pressure and was negative in the quarter.
In the Americas region, solid growth with RevPAR up 6.5% in the quarter, still driven by Brazil, which is, as you recall, our main market in this region. Turning to luxury and lifestyle, Q3 RevPAR bounced back to 8.3% in the quarter, mostly from pricing, and with a much reduced impact from the Middle East tension as compared to Q2. Excluding Middle East, which was down in the mid-single digits, luxury and lifestyle RevPAR would be up 11.3%. Luxury, more specifically, reported a positive RevPAR growth of 8.9% overall. All brands and regions were solid. Middle East was slightly down, and September was also very strong in the low double digits for luxury. Lifestyle also bounced back with RevPAR up 7.1%, nearly equally driven by resort and lifestyle hotels. Middle East was down in the mid-single digits, with occupancy back in the mid-60s for lifestyle.
Turning to slide five, which breaks down our hotel portfolio and pipeline by division. PME grew its network by 2.5% in the last 12 months. Portfolio and pipeline growth remain in line with the previous quarter. Pipeline stands at 28% of network, up two points year over year, and is up 9.2% on a last 12-month basis. Net unit growth for PME in Q3 was slightly impacted by the base effect of the inclusion of the Mexican Royal Holiday portfolio in September of last year. Several large box openings are planned for Q4, notably the Sofitel MACA, Mövenpick in Manila, and Mövenpick in Singapore. On the right, luxury and lifestyle portfolio grew by 5.5% on the last 12 months, driven by lifestyle. Pipeline growth picked up at 10.3% last 12 months versus prior year.
You may recall that we transferred the Lifestyle JO&JOE portfolio to PME in the first half of this year. That impacted the NUG in luxury and lifestyle, sorry, by 1.3 points. So underlying growth, if we adjust for that transfer for luxury and lifestyle, is closer to 7% on an LTM basis, and lifestyle is closer to the mid-teens. Luxury and lifestyle NUG in Q3 also slightly impacted by the base effect from the Mexican portfolio. Pipeline up 10%, as I mentioned, stands at 46% of the network, and that is also up 2 points year over year. We expect the NUG to accelerate for luxury and lifestyle in the fourth quarter, notably with the opening of Sofitel MACA, first MGallery in New York City, and a Fairmont in New Orleans. At group level, again, NUG reached 3% on an LTM basis, pipeline up 9.5% in volume and conversion.
Represented 59% of openings year to date, which is in line with prior year. Turning now to slide six, which is the revenue by segment, and revenue by segment and by division is provided as is customary in the appendix and in the press release. Group revenue, as you can see here, up 9.8% on a reported basis, 7.7% at constant currency. Scope had a negative 1 -point impact in the third quarter, and those are disposal of the events and festive Paris Society entities, which we completed in the second half of last year. FX was a positive 2 -point impact in the quarter as expected, driven by the Australian dollar and the Brazilian real. M&F reported revenue up 6.7% with 1 -point favorable FX impact. Hotel assets and other, sorry, reported revenue bounced back very strongly to 12.4% growth.
Disposals of the Paris Society entities last year were actually offset in the quarter by positive FX. And the strong performance reflects a couple of points. One, a very solid performance of the leased hotels in PME, Australia, Brazil, and Turkey, a boost from the FIFA World Cup for our catering business, Potel & Chabot, a very strong recovery in the domestic traffic of our Dubai restaurant, as well as the openings of 2 high -performing seasonal coastal restaurants in Turkey. SMDL, which stands for Sales, Marketing, Distribution, and Loyalty, reported revenue was up by 2.7%, and that reflects the base effect of the relaunch of our subscription card business in the third quarter of last year. Our loyalty program continues to grow at a very healthy rate.
We had 126 million members at the end of September, with an increased contribution of 4 points in room nights contribution year over year. And we are expanding our Amex partnership, which has now been rolled out in eight markets. Turning to management and franchise revenue by segment on slide 7. PME M&F reported revenue was up 3.6% with 1 point of positive FX, so 2.4% on a constant currency basis. Similarly to what we reported in the second quarter, the flip from management to franchise contract had a negative impact of circa 1%, and the conflict in Middle East still weighed on incentives in the third quarter. Luxury and lifestyle M&F revenue was up 12.5% year over year with 1 point positive FX as well, so 11.2% on a constant currency basis.
Conflict in the Middle East negatively impacted incentive but also combined with lower residential fees in the quarter. Let's now introduce our guidance on slide 8 for 2026. As I stated in my introduction, the solid third quarter performance makes us comfortable to reach the high end of the RevPAR guidance communicated in July, which was between 2% and 2.5%. This updated RevPAR guidance assumes no material change in the trading in the UAE in Q4 versus Q3. As a reminder, Q3 trading in the Middle East was a RevPAR down 25%.
Net unit growth guidance is now expected between 3% and 3.5%, taking stock of the economic context in China, which results in a significantly higher number of closures of eco and mid-scale hotels with, however, no material impact on the group's revenue or EBITDA due to the very low fee per room of these hotels and also the uncertain geopolitical context, which could result in potential delays in our Q4 openings. Continued cost discipline and better than expected trading enable us to tighten the guided recurring EBITDA range towards the high end, between EUR 1,270 million and EUR 1,285 million, which includes a negative FX impact of EUR 10 million, and that is unchanged from the second quarter. This represents an EBITDA growth year over year between 7% and 8% at constant currency. I will now turn to concluding remarks on slide nine.
Following a very strong start of the year, the conflict in the Middle East impacted our trading with a low point in the second quarter and a very solid rebound in the third quarter. It should be noted that results in the other regions remain solid throughout the year. In March, we rapidly activated a very consequential profit protection plan, which has enabled us to largely offset the impact of the conflict through the execution of a strict cost discipline. Both top-line growth and financial discipline allow us to upgrade the guided recurring EBITDA range towards the high end, barring a material deterioration in the performance in the Middle East in the fourth quarter versus the third quarter. Finally, on July 23rd, 2026, we signed a definitive binding agreement regarding the sale of our 30.7% stake in Essendi.
We are in the process of going through the customary regulatory and antitrust approvals, and the closing of the transaction is on track and expected by year-end. Thank you for your listening, and I will now open the line for your questions.
Ladies and gentlemen, if you wish to ask a question, please dial pound key five on your telephone keypad. If you wish to withdraw your question, please dial pound key six. The next question comes from Jarrod Castle from UBS. Please go ahead.
Thank you. Good evening or good afternoon, everyone. Three from me, please. Martine, you have obviously given some color in terms of what you are thinking about the UAE in terms of 4Q. I just wanted to, if you could just refresh us in terms of the current exposure to Paris and France and whether anything has been factored in for any continued unrest. I mean, hopefully there is not, but just how you are thinking about that. Secondly, you spoke a little bit about credit card, but can you also just speak a little bit about how the residents business is doing, especially as we have gone into Q4? And then lastly, just how you are seeing inflationary pressures going into 2027, if you have got any comments on that. Thanks very much.
Thanks, Jarrod. For France is 23% of our room revenue. Now, within that, Paris region, so Paris metropolitan area is about 50% of that. So call that roughly 12% at group level. And Paris city itself is really only 7% of the room revenue of the group. What we see thus far is we see a bit of a pickup in the cancellations, but we do not see anything that concerns us in terms of forward booking. And we have factored in some minimal impact, because we do not think there will be more than a minimal impact, in our RevPAR guidance of 2.5%. With respect to residence fees, I think we have shared with you that we had about EUR 50 million residence fees last year. This year, the number will be closer to EUR 44 million.
So there is a bit of a. It is more a delay in terms of the Middle East residential fees going into next year, but nothing catastrophic by any means. And with respect to inflationary pressure, we are not seeing, certainly this year, the inflation is already picking up. So we should expect that to continue next year as well, but we are not seeing any deterioration in the gross operating profit of the hotel. And as I commented in my introduction, we still see good pricing ability throughout the network, both in PME and more consequential in luxury and lifestyle.
Right. Thanks very much.
The next question comes from Jaina Mistry from Barclays. Please go ahead.
Hi, Martine. Thank you for taking my questions. The first one is around your NUG guidance. Would you mind dissecting how much of the downgrade for the full year comes from China versus more cautious assumptions in the Middle East? Second question is around your RevPAR guidance. You have spoken a bit about France, but are you assuming any incremental softness in Saudi? You mentioned you are assuming Q4 RevPAR in the UAE will be the same as Q3.
From my impression, I thought comps in the UAE got tougher in Q4 last year. So maybe just walk us through why you are assuming the same run rate in Q4. Then very last question on currency. We are at 112 on the EUR/dollar. Would you mind giving us a sensitivity? If FX stays where it is for the rest of the year, what could the potential upgrade be to EBITDA? Thank you.
Sure. Hi, Jaina. So on the NUG, it is all related to China, and it is all related to the Accor mid-scale portfolio, where there is a further erosion of that portfolio than what we had initially anticipated. So it is all China. It is all the Accor mid-scale portfolio. Just to give you a frame of reference, the average fee per room of PME is about EUR 1,200 per room. The average fee per room of our Accor mid-portfolio in China is less than 50. So it impacts our NUG, but it has no impact on our revenue or our EBITDA. With respect to the RevPAR, for the Middle East overall, we are actually assuming roughly minus 12%, which is worse than what we have seen in the third quarter, because the third quarter was minus 3%, right?
We've taken the UAE essentially at the same level, but we have taken a tougher view, if you wish, on the fourth quarter for the Middle East region. That addresses the point you raise on Saudi. Saudi, so that you know, 90%+ of our portfolio and room revenue in Saudi Arabia is in the holy cities or the coast. Riyadh is less than 5% of our room revenue, and thus far, we haven't seen a material softness in the holy city booking. With respect to currency, it's going to be de minimis at this point. We're still assuming EUR 10 million for the full year. When I say de minimis, it's less than EUR 1 million.
Okay. Thank you very much.
The next question comes from Jamie Rollo from Morgan Stanley. Please go ahead.
Hi. Good evening, everyone. Three questions, please. The high end of the 2%-2.5% full-year RevPAR guidance implies about zero in Q4. I appreciate your factoring in the slowdown in the Middle East. You talked a bit about France, but that does seem overly conservative. Is there anything else in there we should need to think about? Secondly, just back on the M&F fees. I know it's simple maths, but the 5.5% constant currency growth is about 2.5 points below the sum of RevPAR net unit growth. You talked a bit about branded residence fees, but could you maybe help us understand the manager franchise switch, then the M&Fs, et cetera, behind that bridge? Then finally, I think we're due a decision on Ennismore with these results. What's the IPO plan there?
I assume it's not going ahead given the chairman's commentary, but is there a risk, sorry, a possibility you buy out the founder stake? Thank you.
Hey, Jamie. Thanks for your question. Yes, you're right. The high end of the guidance at 2.5% gives you a RevPAR that's essentially flattish in the fourth quarter. A couple of things. One, and you may recall that the fourth quarter last year, the RevPAR was up 7% with a very strong RevPAR in ENA. I think ENA was also up 7%. So what we're factoring in is a tougher comp in the fourth quarter and some prudence in France given the events. The month of October, at least the first week, we're trading slightly better than that. In terms of the M&F fees, sure, there's about a point of flip to franchise and a point from the incentives. In terms of Ennismore, no decision has been taken, and we're still exploring several options to meet our obligations vis-à-vis the minority shareholders.
Thank you very much.
The next question comes from Leo Carrington from Citi. Please go ahead.
Good evening. Thank you. Two questions from me. Just going back to your comments on China. I understand the drivers. Looking forward, once the hotel network has stabilized with these closures, do you think you can shift your overall hotel mix in China into the other brands, potentially, that come with a higher revenue drop through, outside of the Huazhu master franchise agreement? Secondly, following up on the RevPAR question so far, is there anything you can appreciate the need for caution, but in terms of the business on the books or the trends that you're seeing in your properties, is there any other reasons that you wouldn't expect the strong RevPAR growth outside of, say, France and the Middle East to persist over the next six months? Thank you.
Hey, Leo. Thanks for your question. With respect to China, clearly we're developing through the master franchise. Actually, the openings in China have not slowed down compared to, let's say, last year, for example. But the erosion, the churn in the Accor Mid-scale portfolio, which is our master franchise portfolio, has significantly accelerated, and that will probably take a few years, a couple of years at least, to cycle through. We're obviously pushing to develop the other brands in the portfolio, which is the premium and the luxury brand. But today, I think the Accor Mid portfolio is probably close to 70% of our portfolio in China. In terms of RevPAR, look, the month of October started a bit better than flattish RevPAR. We're not seeing softness, but again, we're just mindful of the fact that last year, the fourth quarter was 7%, including in and out.
It's a bit of a tough comp to like. In terms of the bookings, as you know, this is an industry where you have little visibility, given that 40% of the bookings are in the last week. The room on the books is, again, slightly better than flattish, probably more in the low single digit. But again, we just want to be thoughtful, given the current environment.
It's very clear. Thank you, Martine.
The next question comes from Alex Brignall from Rothschild & Co Redburn. Please go ahead.
Thank you very much. Good afternoon. A couple of questions. On China, following on from Leo's question, could you just talk about the economics of those that you are signing into the system or opening? You gave some pretty startling numbers of the ones that you're taking out in terms of fee per room. Maybe what the fee per room for the ones that you're adding looks like. If there's any update on Revo, that would fall. Obviously, Wyndham talked about getting a resolution on that before the end of the year. If there's anything that you can say there. Then just on NUG, you just talked about a couple of years to cycle through those China removals.
Could you just give us an idea of what the quantum would be if you did cycle through them by the end of next year, so that we can have an understanding of what that then means for the basis for churn for the year after? Thank you.
With Revo, it's basically as we expected. It's about 30 basis points impact on the NUG for this year. As expected, no change there. With respect to the impact on China, on NUG going forward, I think we'll talk more about that when we meet again in February for earnings release. In terms of, you can look at the history and get a sense for how fast China was growing historically, and it's clearly slowed down given that churn. With respect to the openings that we're having in China, as I said, we are still opening in Accor Mid. Therefore, there's not a material change in terms of the fee per room, in China, between the rooms that we're opening and the rooms that we're churning.
That being said, if you look at the total openings of Accor, the fee per room of what we open is 2x the fee per rooms of the rooms we close.
Thank you very much.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Kate Xiao from BofA. Please go ahead.
Thank you very much for taking my questions. First, I ask about your luxury and lifestyle portfolio. Obviously, RevPAR very strong there outside of the Middle East. Could you clarify which geographies you saw particular strengths across both, I guess, luxury and lifestyle? Second question, in terms of your finance costs, I guess one of your peers today gave a bit color on 2027 interest costs and how that's a big step up in the rising interest rate environment. I just wonder if you could tell us a bit more about whether you have refinancing coming up in 2027, and how are you thinking about your finance cost going into next year? Thank you.
Sure. Hey, Kate. Look, in terms of luxury and lifestyles in the quarter, outside of the Middle East, really, all the regions were actually performing extremely well. Americas performed better than Europe, but Europe was in the, let's call it, mid-single digits, and Americas was more in the double digits, which I think is consistent with what you see in the luxury portfolio. Asia was also strong. So really, America's probably pulling it a bit better, but frankly, all the regions actually performed very well in this quarter. With respect to the interest rate impact on our debt, our debt is fixed, so we do not have variable rate debt. Sorry. We are pretty disciplined in the way we sequence our debt refinancing. We just refinanced debt this year, which was our convertible.
We have a hybrid debt that probably will be refinanced, but probably closer to 2028, maybe 2027, if the conditions are supportive. No concern with respect to the impact of rising rates. No material concern with respect to rising rates on our interest costs.
Thank you.
The next question comes from Tim Barrett from Deutsche Bank. Please go ahead.
Hi, Martine. Good evening. I had a question. Come back to France, please. I would just love a bit more color about your comment, low single digit in Q3, because it feels like September was exceptional. I just can see how July and August were and whether they were positive indeed. Going back to your comment on the Middle East, I think you said minus for the quarter expected. In order to interpret that, can you just remind us how the revenues split within Middle East, between UAE, Saudi, and any other you include in that definition? Thank you very much.
Sure. The question was about France, right? France, for its part, was positive in every month, in July, August and September. It was a bit stronger in September given the events calendar, particularly in Paris. There was no month that was negative. With respect to the UAE, basically the largest two markets are Saudi Arabia. Sorry, with respect to the Middle East, the largest two markets are UAE and Saudi Arabia, and each accounts for about 4% and 5% of the room revenue, and the region is 11% of world.
Okay. The remainder?
The remainder is just, you are going to have Egypt, you are going to have the other GCC, and the rest is non-consequential.
Sure. Okay. Many thanks.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to Martine Gerow for any closing remarks.
Thank you, and thanks for attending our call, and thank you for your questions, and I wish everyone a great