Accor SA (AC) Earnings Call Transcript & Summary

Good morning. It is 8:30 here in Paris, and we're going to be attending all together the earnings release for the first semester 2022 of your company, Accor. Let me put that in the right order. Disclaimer. You don't need it. We're going to go straight to the first slide, which is what I usually call 20,000 feet altitude. There are a set of numbers here who are quite interesting. On the upper left, many of you remember, we've been talking about it all of us as hoteliers a couple of years ago, enjoying a very strong 1.5 billion international travelers in the world. And on which we've noticed in 2019 that the Chinese for the first time ever surpassed America was 155 million and growing. We've been missing those Chinese travelers ever since. There's no 2020 here, but many of you know that in 2020, the numbers of international travelers was less than 100 and only because many markets were not closed in January and February of 2020. Then went up back to 400, which was a very small number compared to what was the case in 2019. What's interesting here is every month passing for the last 6 months, all the estimates done by the UNWTO has been revising upwards. And in only a matter of 4 months, it's been up to 912 million, while we're still missing a lot of people from Asia, certainly the Japanese and the Chinese. For many of you who've been recently in London, in Rome, in Paris, we've rarely seen so many international travelers in those cities. And here we are in Paris. I came here even last night, that was busy all over Paris with enormous amount of American tourism, which is certainly an indication of our industry still being blessed with 2 things happening, the rebound of international travelers and a very, very strong domestic leisure market. If you go below on the left, that is also interesting and probably better and faster than we could have anticipated 6 months ago, is a recovery of the flight capacity of the airline. I know we have to be very careful, the minus 7% you expected from the OAG, which is the organization for aviation. It's a small minus 7%, which is expected in a couple of months from today by September 2022. Bear in mind that, that number varies quite a bit where domestic airline is very strong. International flight capacity is still at 60% of what it was a couple of years ago. But still, minus 7% going up. It's also a very good sign of the eager of traveling. Pricing, which is the upper right, that is again, unexpected to be so robust and to be greater than we enjoyed in 2019 with a lesser occupancy. You've seen the numbers. London, plus 14% in Q2 2022, Paris, plus 11%. Sydney plus 7%. I can go on and on for whether it is San Paulo, whether it is in Dubai. And probably 80% of all the major capital cities of Accor, we have a better pricing today that we had enjoyed ever since. So let's make sure it last. Let's make sure we provide the highest level of service to our guests, but that is certainly a sign which is very much encouraging, on people not only traveling but accepting to pay higher prices for a better service and a better product. What you see on the bottom right, it's also a very strong indication, which I was probably a bit fearful about, is we knew for quite a while that we'll have a very strong leisure market, a very strong domestic leisure market. Then we've seen a good international leisure market. I told you about South America and American traveling all the way to the Western world and in Europe. What I was questioning is how strong will be the fall? And many of you know that the fall is probably 60% of it in the hands of business travelers, and of course, large congress, seminars, events. All of them in Europe and elsewhere have been confirmed. And many of them are extremely large and very impactful for Accor [ large beast ], be it a Novotel, Pullman, Mercure all over Europe, notably Germany and France. So you see the Oktoberfest is confirmed. Bauma, which is the largest congress in Germany, is also confirmed. Paris automotive show is confirmed. And of course, many of you know we're going to be enjoying a very good World Cup in the Middle East, in Doha by the end of this year, which is going to be irrigating a lot of activities in the neighborhood countries, be it in the UAE and in Saudi Arabia. So -- it's -- we're looking forward for a very solid summer. We already have the benefit of having the month of July almost behind us, in which we have a very solid performance, which is even better than June. And no worry at this stage in terms of activity, pace, geography, and that is all across the brands of Accor, so luxury and economic segments of Accor are doing as well, and again, across all the different regions. Well, that's my 20,000 beat kind of sentiment, we're going to go back probably more deeply when it comes to the Q&A. JJ?

Yes. Yes. Thank you, Sebastien. Good morning, everybody. Very happy to be with you for this presentation. Same comment as what I do typically, which is for sake of clarity, the RevPAR variation are by region versus 2019 still for this year and not anymore going forward, and this is to ease performance understanding. For revenue, we provided versus H1 2021 and H1 2019. But let's start with the beat. The financial highlights, and I am on Page 6 of the presentation. The notable thing here is that in Q2, we are back to the top line of 2019. So it's the first time that we are back to the level of business that we used to do in 2019 in Q2. And you've seen RevPAR improving last year. And this year, again, the RevPAR has been improving sequentially every month since the beginning of the year. And it is supported, and we detail that later on, by a strong pricing power across the board. The net unit growth is 1.8%, last 12 months number for H1. And we do confirm today that our FY '22 guidance is a number around 3.5%. All of that translates into a revenue of EUR 1.725 billion for the group, i.e., an increase of 95 -- 97% sorry, like-for-like versus H1 2021. So as a result of that top line, the profitability and the cash generation rebound, EBITDA is in positive territory and is about EUR 300 million higher than what it was 1 year ago. You find the same pattern for recurring free cash flow, which is a EUR 41 million positive versus a minus EUR 260 million negative 1 year ago. And again, that's about a EUR 300 million variance here. And all of that is through, obviously, EBITDA, but also, and I'll detail that a bit more, all the work that has been done for now many years, many months on the financial management and the debt structure of the company. So a very, very rigorous financing management here. I'll detail that in the presentation. If you move to give -- to the next page to give you more insight by geography on what's happening here. So the RevPAR is, you can see it very well, sequentially improving quarter after quarter. But you can see also the jump from Q2 versus Q1 of this year, we have been earning about 20 points of RevPAR in each and every geography. Talking of South Europe, you end up with a Q2 RevPAR which is a positive number, 2% versus 2019. And what is notable here is the flowback of international traveler in our business. Sebastien was alluding to it. You may recall that we've been commenting that capital city like Paris or London were, in fact, lagging what you are seeing in province in the U.K., or in France for that matter. That is not true anymore because the flow of international traveler, which is the one that feeds those big cities, those big capitals is now such that you're back to a level which is the level of the province. And so that's a very good illustration of what we see happening in the business. It's not only domestic, which is [ already ] what's happening here today. It's also the international which is back. By the way, on North Europe, one other thing that I would say, Germany has been lagging. You may recall that they kept very strong COVID measures up to April, but you will find out that Germany in 3 months have recovered the level of business of France or of the U.K. for that matter. So very, very steep here in all of Europe. When you talk about Asia Pacific, Asia Pacific has been lagging for 2 years now. I mean, the #1 issue is Greater China with the Zero COVID policy. We went into a [ lance ] of explanation on that. This is still the case. And in fact, if you are to look at the RevPAR in Q2 for China, you're close to minus 40%. Pacific, which gave away that policy many months ago now and have reopened both the state, but also the international border, is in fact, doing very well with RevPAR, which is at plus 9% over 2019 at the end of Q2. And Southeast Asia is kind of in between, still depending on China traveler to a large extent. And hence, with RevPAR, which is at minus 31%, but in trajectory, which is also significantly getting better. And you see that very well if you are to look at the details, for example, of Singapore or the details of Thailand. In IMEAT, which is India, Middle East and Africa, this is the good people of the class. I mean, it's 32% RevPAR in Q2. They've been benefiting from very strong activity for many, many quarters now in UAE. The Expo did help. But in fact, the business continues to be extremely strong despite the Expo now being over. Saudi is taking over also because Saudi was impacted by the closing of the country to pilgrimages. But now this is not the case anymore. And you have some very nice numbers in Q2 because of Ramadan. But we also have some very nice numbers because of the Hajj in Q3. So all of that is going in the right direction here. And Americas is a 19%, sorry, sequential improvement Q2 versus Q1. You see it's a positive Q2 RevPAR at plus 5%. And here, what I would say is quotable beside the health of North America as a continent for many, many, many quarters now, is the fact that Brazil is now back to an occupancy level of 2019. So Brazil is, in fact, I think, a very, very strong recovery. It's the first large country, which is back on occupation rate of 2019. Moving to the other driver for the top line, which is the network. You can see last 12 months net unit growth of 1.8%. This translates into 12,000 room openings for H1. This performance is very largely impacted by Asia and notably China. China suffers from the strict implementation of the [ travel ] COVID. And besides -- because of that, it has an effect -- a clear effect on development pace. As an illustration, Huazhu opened 1/5 of what it would open historically over H1. And the [ correlated ] effect of that is that Southeast Asia, which has been a locomotive for our development over years is not getting those Chinese travelers and hence, the openings is not either at the level that it should be. The conversion, as you would expect, are strong, 59% of the H1 openings, and so that's positive going forward. Over H1, on the other hand, the churn was higher than it is usually, and this is due to China. This is also due to one portfolio exit in Europe that we had covered during the Q1 earnings call. So in summary, COVID had a [ season ] effect on Asia, impacting both the opening and the churn, but we think the churn will normalize over H2. And we think the openings will recover significantly in China and Southeast Asia and hence, the guidance that we reiterated at 3.5% for the full year. Just a side comment on the pipeline. It has been very stable for many quarters and continues to be stable at 212,000 rooms. If you move now to the P&L and the top line. Accor revenue growth is 97% overall versus H1 2021, minus 10% versus H1 2019. The difference is the usual. It relates to the various exposure of the hotel asset versus hotel services to explain what is -- why is the EUR 119 million of growth versus H1 '21 for hotel service being different than the 57 for hotel assets. I'll detail anyway much more on the M&F fees in the next slide. But as a macro comment, the M&F fees is minus 15% decrease versus H1 2019, and the service to owner is minus 10% versus H1 2019. So all of those numbers are very much in line with what the RevPAR has been evolving towards. If you move to M&F, so getting into hotel service and into the heart of the [ Accor ], which is the M&F revenue. You've got here the split of the M&F by geography. Versus H1 2021, M&F rebound strongly, plus 153%. And the various variation that you have country to country in fact reflects the variation of the RevPAR. What is quotable here, and very much in line with the first statement I made on the numbers, is the situation is normalizing. And you may recall, we had many conversations around the level of incentive fees, which are linked to the performance of the hotel on the ground. And we used to have in 2019 a level of incentives as a percent of the total M&F fees, which is to the tune of 1/3, 33%, 35%. And in H1, we've reached the level of 31%. So there has been a very strong recovery of the incentive, as you would expect, taking into account what the RevPAR is doing and also taken into account that there is good prices and hence, a good profitability at the bottom line of the hotel. So that's very positive and does confirm what we've been telling you many months. I think this is mostly it on this page. Moving to the EBITDA, so the EUR 300 million rebound. Just some element of context here. Tourism recovered swiftly from COVID. I mean the speed at which the fees fell down was probably not foreseen by many people. The things -- the speed at which things came back, and notably over Q2, was probably not foreseen by many people either. Now in order to make sure that we don't lose the battle, we've taken immediate action on marketing in order to capture the business. So it's rebounded fastly. Last thing we want is to lose it to [ OT ] or whatever. And so we've been acting swiftly and spending lots of effort in marketing and development in order to capture and convert the level. By the way, if you want to use as a measure of the direct booking of the business, we are at the end of H1 '22 at the level of H1 2019, i.e., the level of direct business that we've got in Accor is the level of 2019, which means that this strategy has been working out. Now the COVID has also left us with something which is not as positive, which is labor shortage. And we do suffer from labor shortage in the hotels, but we also do suffer from labor shortage in sales, marketing, distribution and loyalty. That's one thing I'd like to talk of. And the last, but the most important is the very unexpected high level of inflation that we saw over the last month. As we knew, there was inflation, but nobody foresaw that it would accelerate like that. And that has an effect structurally on the cost base. Good news in all of that is that reset is being delivered per plan, as we've been telling you the same amounts, nothing changes, and this is helping offset all of that and notably the inflation. Let me deep dive a little bit more on that. When you look at the EBITDA of Hotel Services, you see, in fact, an EBITDA which is a positive EUR 208 million. And if you were to compute margins, you would see that, in fact, the margin on M&F is quite close to the margin of M&F of 2019, a bit less, but getting there. And again, no surprise here because the RevPAR is not at the level of 2019, and it's also of a different mix. You don't have the occupation rate today. As for STO, service to owner, which is where you find the sales and marketing effort, this is though still very negative. I mean we're see that EUR 89 million of SMDL profit -- or loss, I should say. And this is due to what I was explaining on the strengths of the action we took on marketing, but also on inflation. What you have in sales, marketing, distribution and loyalty is the factory of the group. That's where you've got the IT, that's where you've got the distribution, that's where you've got all the services that we buy from outside in order to run the machine. And these are very much impacted by inflation. So today, we just need to give a little bit time to time to see what will be in the end, the real structural effect of inflation, but it is impacting us in H1 for sure. Now if you look at hotel asset, nice rebound. And again, very much following the recovery that I was describing in Brazil and the recovery that I was describing in Australia. If you move, sorry, to the -- what is below EBITDA, which is the net profit. You see a net profit, which lands at EUR 32 million, a positive EUR 32 million. In H1 2022, the transition from EBITDA to net profit is pretty straightforward. There are not big variations. Quotable is the fact that the share of losses of associates and joint venture, which was a EUR 200 million loss last year, has ended up being a EUR 30 million loss. And what you find here is fundamentally AccorInvest's performance, which is a European vehicle and is totally benefiting from what I was describing in RevPAR for the Accor Group. And hence, the fact that there is a steep rebound of their profit, and as I take 30% of the profit, that's why you see the improvement here. On the nonrecurring item, nothing much to report this here. There was a huge profit last year of close to EUR 600 million, which was the stake of Huazhu that we did sell in 2021. So that's what explains transition and not much more to comment here. It falls down pretty cleanly to the bottom line. Moving now to cash, not P&L, but cash. Free cash flow back to positive territory, a cash generation of EUR 41 million of recurring free cash flow. [ See your ] cost of debt, which is stable here and I'll detail more what we've done on the debt in the next slide. Recurring investment, which is where we find key money, IT investment is also well monitored at EUR 55 million for H1. And we've been providing to you a bracket for the full year of EUR 150 million to EUR 200 million, and we do confirm the bracket of EUR 150 million to EUR 200 million. Working capital change, which is very seasonal, as you may recall, between H1 and H2, is also a good number at minus 25%. As usual, there are a few things in working capital, a few one-off items left. But in the end, the number is where it should be, and our target is the working capital, which is close to 0 for the full year, as it has been for many years in 0. All of that ends up into net debt, which increased from -- sorry, EUR 2.25 billion by about a bit less than EUR 200 million. And it's due to 2 things. I mean, first half is the restructuring plan. We continue to pay cash in order to basically fund the reset restructuring, if you will. And then there were one investment which was done in dark kitchen in the U.S., a company called Reef, that I'm sure we'll talk later on in the Q&A. Moving to my last slide. Just I wanted to step back here for a minute and talk about financial management. Why do I do that? I mean because we are in a time where there is a lot of trouble. And notably, that inflation has an effect that cost of financing is basically doubled. And so we just wanted to step back here and explain what we've been doing. Our cost of debt is 75% fixed in nature. So we've been doing what it takes in order to be there, and we are very happy to be at a fixed cost debt taking into account what you see in the market. By the way, we even decreased the cost of debt versus the end of 2022. It used to be 2.2%, it's 1.9%. So good work has been done here in order to ensure that the funding is in the right condition, both in terms of prices but also in terms of structure. Then we've been working, and we do that every year, on liability management. And so you know about the sustainability-linked bond that we did last year. We did it in the right window. And so today, we don't have any significant [ immunity ] for the short term and the refinancing that we did was at a good price. The nonrecurring cash flow, you saw the transaction of the sale of 10.5 (sic) [ 10.8 ]% of Ennismore at a very, very good, very nice multiple. And this is a good example of what we do to manage our balance sheet, disposal of some item at good prices. It was sold at EUR 185 million, for those of you who don't recall the number. On the other hand, in the term of usage of fund, we are very careful on CapEx. I just explained that on recurring free cash flow. There is no significant acquisition which is anticipated. We have the question every call, and so we'll have the question on this call, I'm sure. Deleveraging will come from operation in a very organic manner through EBITDA and free cash flow. And as for annual return, I mean, you know the policy, it doesn't change. And so as we are generating recurring free cash flow, it will generate mechanically a dividend proposal for next year. That's what I wanted to cover on the numbers. And with that, I turn back to Sebastien on this presentation. Thank you.

[Foreign Language] We're going to go through a very different topic, which is, I think, next slide. Sorry, I need to put it in. It's on the -- many of you know what this company has achieved over the last, let's say the last 10 years. And it's being sequential. And I hope it was clear for the outside world, I can tell you he was extremely clear for internal -- the internal organization. There was 4 steps now, but 3 steps that you remember well. The first one, which took us a solid 4 years, and we started in 2014, was to accept, assess and execute on this company should no longer being an owner and operator and no longer spend hundreds of millions on real estate, maintenance, plumbing, electricity, changing the roofs, et cetera. So we called it Booster, and we call that step GetLight. And it's 93% finished behind us, there's still a tiny bit that we need to continue pursuing, which is mainly in Australia, Mantra. And of course, we still have this 30% participation in AccorInvest. But that's behind us, well executed and well timed. Many of you remember that [ I guess ] we closed on Booster in December '19, and we closed on Orbis, which was the Eastern Europe part of Booster, on February 22, exactly probably 3 or 4 weeks ahead of COVID crisis. There was another reorg or at least another ambition of a very different nature also started in 2015 is a true ambition willingness of Accor to move faster in unknown territories, really going upscale into new geography, new brands and, of course, through many acquisitions and notably Fairmont, Raffles, Movenpick and all the lifestyle brand from SBE, and I can actually add to this [ see ] Mama Shelter and 25hours and many others. So that was trying to expand, diversify both geography and segment. Then there was a third step, which was very much linked to the COVID crisis. Remember, we talked about lessons learned, and we had time to reassess the organization, the nature of the different services rendered, whether it was worth continuing, whether it was the right pricing, whether we had the true value add in those different services. So we turned ups and downs 7,000 different stones, and each stone had a different topic, and we decided to reset ourself and get fit. And that is a couple of hundred million savings, permanent savings, which is really the buffer against what's going on now, inflation and many other topics. But there was a fourth step, which was as necessary and probably indispensable as the first 3 were, was really to accept that Accor was a bit too big of a beast in terms of not efficient enough on being generalist, and decided and announced on the 5th of July that the fourth now reorg or ambition or strategy, call it the way you want, which is called Get Focused. And those 3 words you see down below that box. We had actually a couple of years ago at the time we done Get Fit, I was trying to emphasize to everybody in the group, an acronym called FSE, FSE was focus, simplify and expand. You see those 3 names still in the ambition because I want people not to forget about it. But we added to each of those 3 words what it means. Focus means not only that [ I guess ] be accountable for what you do, but it also means that we need to uplift, upskill a lot of talents in terms of expertise that we're probably lacking, and certainly in the luxury space. On the simplify, if you really want to simplify yourself, the organization get leaner and more efficient, of course, more cash flow contribution, you need to think about whether you could, you should industrialize your different business model and process better. And then on the expand, this company has done something extraordinary for 55 years is conquesting the world: new territories, new brand, new culture, providing a job to many underprivileged people in local community. And that notion of acceleration has been there for 55 years. We should not lose it, and certainly it's one of the biggest weapon of this group in today's world. So the get focus is really trying to reassess, reorganize, do things differently and probably with different expertise, different talents in this group, which basically leads to the slide right after. And I'm going to pause a minute on it because I didn't have the chance to talk to you directly. Of course, we spent a vast amount of time on July 1 with the top 300 leaders of this company who actually flew in from all over the world to Paris for 3 days. We really sat down on Jean-Jacques, myself, Steven Daines from T&C, explaining to the leaders of this company what we are doing and why we're doing it. So in a nutshell, what we're doing is we're reorganizing ourselves in 2 different autonomous, empowered division, and I insist on autonomous and empowered. You will have at the holding level, the leanest ever structure. I certainly don't want the Accor Holding to be another body of decision-making. It should not be the case. All decisions should be rendered at either of the boxes, whether it is economy/midscale/premium, I'll call it the green box, or the luxury lifestyle division, and I will call it the blue box. So at the top level will be remaining there, anything which is fiduciary, of complying, of compulsory nature, which -- but that includes ESG reporting to you guys, the Board of Directors, company, and that's about it. Finance, T&C, which is talent and culture, development, everything will be reallocated in the 2 boxes and nothing left at the upper level. So on the green box, which is 90% of the network of this company, it goes from Formule 1, Ibis, all the way to Pullman, Movenpick, Swissotel. It is 4,800 hotels. It's 90% of the hotels. It is 85% of the fees, but it's only 2/3 of the cash flow. That will be very much process-driven business model, and we need to make this company leaner and it has to be market-driven. That company will be led by Jean-Jacques Morin to my left. We are streamlining by half the numbers of geographic hub. Today, we're running under 8 geographic hub, we're going to be turning to 4. Americas will be reunited together, based in Sao Paulo. Northern Europe, Southern Europe will be also united under one single body of decision-making, will be based in Paris with some satellite offices in Munich and in London. Large region. We're missing the eye here for India, sorry. India, Middle East, Pacific will be based in Singapore, and we'll have satellite offices in Dubai, in Singapore, and of course, remaining in Sydney. Greater China will remain as one autonomous empowered, I call it, a large continent, and you could and should notice that, that box has both colors because Greater China will also be of the same team looking after the green box and the blue box because of the notable differences of China. You need to understand what China is made of to be able to operate efficiently in China. We have a great leader by the name of Gary Rosen and will continue to do what he's been doing at best for the last 5 years for this company. And then you have the blue box which is very much inverse of a process-driven organization. It will be a tailor-made hospitality, agile and brand driven, which means that, I guess, it will not be geographic led, it will be brand-led. And you have 4 boxes. You'll have a CEO, global worldwide CEO for the brands Raffles and Orient Express based in New York. You'll have a CEO for Fairmont, Global based in Dubai. You'll have a CEO for Sofitel, MGallery and Emblems, which is a new luxury collection based in Paris. And we will be remaining with the 2 co-CEOs, Gaurav and Sharan, Ennismore based in London. So you obviously, by looking at that slide, and of course, we have much greater numbers of granularity, organization and boxes underneath that slide here, but I won't bore you with it. We're probably going to do it. One would be one-on-one with you in London, Paris, New York, Boston, whatever. We'll spend enough time. That organization will be in place on the 1st of October. So announced on the 5th of July to the 350 leaders company. For the last 4 weeks, we've been spending enormous amount of time on trying to be more precise on where people will be working from in which geography for which segment. And we probably won't be ready on the 1st of October and does not matter. People will be in charge, and it's probably going to take probably 4, 5 months from the 1st of October to early spring to be fully set up. But do not worry, all the hotel general managers work day and night, and it won't change much except probably better, faster decision-making processes with a greater amount of expertise. So I'm very proud of this announcement, very well accepted by the entire decision-making authorities of Accor, but we owe you probably more answers on this one, time passing. For the priorities of 2022 before we go to the Q&A, those are very simple and probably easy for each of us to accept and to remember. The first line is, it says 2 things here. Number one, the rebound is here, make sure you captivate it, make sure you have the best of it and make sure you have the best performances, which is also why when we've announced the so-called [ Tier bore reorg ] on the 5th of July, we delayed the execution of it on the 1st of October because it was impossible to even think a minute to lose the existing team accountability for the summer. So by the 1st of October, the summer will be behind us. And of course, a lot of the forward booking for the months of October, November would be already in the tally. So [ rebound ] make sure you have it. And two, since we are very comfortable that I guess we had a solid second quarter. We'll be looking for a solid third quarter and good activities on seminal events. We are today confirming to many of you that the EBITDA of this group should be above EUR 550 million by year-end. Number two here is, Jean-Jacques touched upon it. We are -- we're not disappointed because we knew it, but we had a very slow growth of signing and opening in the first quarter of this year for a lot of good reasons you guys know of, certainly in China and Southeast Asia, where it was impossible even to travel in a confined environment. But it is speeding up, probably far faster than I even expected myself, for the last 2 weeks of June, and I was yesterday with the head of development. And she told me that, I guess, we had extraordinary number for July. So it's really there. It was only a question of rebound and countries opening. So which is why we're confirming to you that whether it's going to be plus or minus 3.5 percentage in growth, that numbers will be met. I'm adding here, which I've done on the first quarter, and I've done it last year, bear in mind that I guess I am insisting with everybody, and I'm doing it with you, let's not move away from being fees per room-driven and not net unique growth volume-driven. It makes a huge difference. So we've been insisting for a long time, but even more so today than before, and certainly even more so after the 1st of October. And what matters for this company is how do you transform good revenues into EBITDA. And how do you really go when you go to new market, new brands, can you get a better margin and a better absolute dollars from our own activities. Being only volume-driven is not enough and probably foolish. So accelerating in those segments and of high accretion. Number three, it's probably where we need to spend a lot of our time, and it's a difficult task, is pursuing, attracting, retaining talents. It's -- you know and some of you were at the NYU large conferences only 1.5 months ago, and we were all sat down together between Hilton, Myriad, InterCon and many other industry peers. It's not devastating, but it is worrisome. We need -- I think we've been able to retain all the talents, many of them actually are still with us and happy with us, but we need more talents. We need to make sure they're going to be joining us. Maybe not for 5 days a week, maybe for a couple of days or 3 days a week. But that's a must because we're going to be back at occupancy level of 2019. And in order to be back, in order to enjoy the best pricing and the best services, you need more bodies in this industry and probably we'll go back to this as a one-on-one also in the Q&A. There is solutions for us, and we make progress over the last 4 or 5 weeks, but we need now results. And number four, it's what I touched upon it, Turbo organization, the reorganizing of this company is a must. It's necessary, it's indispensable. No regret, it could not have been done earlier. It's the right timing for us to do it because we have the scalability today we didn't have before. But that will have very good significant impact on probably performances, but more so for many of you listening to me and for you assessing better your -- the clarity of Accor equity story, and I'll give you just a number. The 43 brands of Accor I told you, the green box will have 90% of the hotel, but only 15 brands out of the 43. The rest of the brands will be with a lifestyle to blue box and [ luxury sec ], which is normal. But when you're going to be seeing that way, you may be opening your eyes oh, now we understand. So that's where we are. Let's go now quickly to for the next 30, 40 minutes on the Q&A, because we need to hear you, and we need to respond to you. Thank you very much.

[Operator Instructions] Our first question comes from Jamie Rollo from Morgan Stanley.

3 questions please. First one is just on cost. The sensitivity of EBITDA to RevPAR in the first half looks pretty high, around EUR 25 million. Could you talk a bit about how much of that is due to the phasing of costs in the year, [ as between ] H1, H2 versus actual inflation and what that means for the back half of the year? And you referred to the reset savings. But previously, you've said that those would enhance margins even in services to owners. That now looks like those 4 could be used to offset the cost pressure. Secondly, could you please give us your full year RevPAR assumptions behind the EBITDA figure? It looks like you're pretty conservative in the second half of the year there. So is that fair? Or again, maybe it's something on the cost side? And then finally, just on splitting the business into the 2 parts. Just on the luxury and lifestyle, I think you said it's 1/3 of free cash flow. So is that also 1/3 of EBITDA there? And also, if you were to split it or even sell it, does that create any negative synergies with the other bigger [ sisters ]?

I'm going to do the just one, which is the last one, Jamie, and I'm going to give JJ the tough one, which is the cost and the RevPAR assumptions. [Foreign Language], JJ.

So I start?

Yes. Yes, of course, you do.

I've got to work. So on RevPAR, it's easy. I won't give the RevPAR. Now listen, what we said is that we would provide sensitivity up to the end of last year, and we will -- I said that in February, we will stop the discussion on sensitivity and RevPAR by changing it to a full guidance on EBITDA, which is what we just did today. So we are going to need to go back to, in terms of guidance and disclosure, to what we used to do, which is give EBITDA and give net unit growth. And for the RevPAR, you make up your own model. In terms of reset and the cost pressure, I mean, you're absolutely right that what we've been saying is that reset is something that would come on top, it's something where there is a residual. We discussed the EUR 200 million. And you may recall, we said that there would be EUR 20 million in 2020, EUR 120 million in 2021, an additional EUR 50 million in 2022 and the remainder in 2023. This is still the plan. This is exactly what we are doing. The reset of the current share, you may recall we had 2 big buckets. One was people and the people was executed relatively swiftly because once the people are gone, then you get the benefit to the bottom line. The second part, and why the plan took 2 years, was coming from system. So this is, by nature, much more back-ended. So what you find in H1 versus what you find in H2 of the reset saving is not symmetrical, if you will. There is more at the year-end part of 2022. What we also described in February is that there was inflation that, that inflation would dent into some of the saving of reset, based to one of the questions that some of you did ask during the year-end result. Now what we've learned the hard way is that the inflation that we face today is not at all the inflation that we could foresee 6 months ago. So I think where we stand on inflation is we don't really know what the full impact of the inflation is and will be. Nobody does. And so because today, in the account, what you see in the account of any companies, you see only part of the effect on the inflation on the P&Ls because many contracts are multiyears contract. And hence, what applies is not the price that you may get when there is a renewal, it's super true for energy contract, not that as a service company, we -- this is a significant part of our cost base. It's a really significant part of the cost base of the hotel themselves. So to make it a summary, there is a [ through ] reset hedge, a clear hedge, which is going to help us make sure that we come back easily to the 2019 level of profitability. What is still to be fully understood is how much of the changes that occurred with the COVID post period, whether it is on hiring people, which is much costly today or on the structural inflation that has been following macro events in the world, and notably lately the Ukraine crisis, that structural effect is still to be fully understood, but it's going to dent into the saving of reset for sure. So that's, I think, what I would say here. I think we need a little bit more time on all of that so that all of that sediments and that we get more information because the acceleration has been really in the last 3, 4 months, and we will know more as we are [ going to ] progressing. And this is also why the guidance that we provide is a plus EUR 550 million. Normally, we would provide a guidance with a bracket. Here, what we said is that we're going to provide you a floor. We commit that we will do more than EUR 550 million, and we don't tell you what could be the upper limit of the bracket exactly, because of the rationale that I went through on the many uncertainties that there is still in the world.

On -- Jamie, on the third question, let me start with -- which was not part of your question, but it's implicit. By doing this Get Focus reorged, we are not contemplating to have any dissynergies. So it is cost neutral. And of course, I am hopeful there's going to be cost benefit. So reorganizing the group the way we've explained to you on the green and the blue boxes will not add any cost. What you may need in terms of new talent, new expertise, new hire on the blue box, which is luxury lifestyle, will be permitted by leaner and lesser cost in reorganizing the green box. That's [ enough ]. And that's how it's being defined and crafted over the last 4 months. It's -- yes, it is 1/3 of the cash flow. It's probably very much equivalent to 1/3 of the EBITDA. We'll go in greater detail with each of you. You will have by 2023 the entire reporting number of this company will reflect the new organization. That will not be the case for 2022 because we're still under the old organization. But for sure, coming June next year, you will have different reporting. One will be geographic driven with the green box, which is economy, midscale and premium, and the other one will be segment driven for the luxury lifestyle. And of course, by doing it that way, you'll get -- you're going to get a large amount of information you don't have today on cash flow, top line performances. And you'll see that those are vastly different in between the 2 activities. In terms of eventual split, it is not today in the thinking. What is in the thinking is getting better, being clear, being more efficient, having probably [ individual ] relationship with the owners because those owners are, in many cases, absolutely different with different ambition, expectation, and weigh different numbers in terms of investment and dollars at risk. What we will do for at least 24 months is we will have, in order not to have these synergies, we will have a common bond of 5 things, which we call shared services, which will be at the service of both divisions: distribution, loyalty, Accor Tech, which is the IT infrastructure, digital factories, which is all the digital tools, whether it is revenue management and the API and others, and procurement. Those 5 elements will be at the service, so-called SLAs to the benefit of the green box and the blue box -- as it is today, by the way. But that will be under the reporting of Jean-Jacques, but he'll probably be sitting also with me at the [ comac ] level of Accor Holdings. So no dissynergies for 24 months, nothing really changed except, of course, we're going to be diving in to be better at those 5 boxes, but that would be commonly shared. If one day, a split should, could, might happen, which is not something we're thinking about today, we'll make sure that, I guess, there won't be any dissynergies because we would have prepared the company in order to have that optionality in [ etelly ]. So that's where we are.

And if I could just quickly get back to Jean-Jacques, are you prepared just to give us the inflation number then at the group level on a full year basis? Just give us a feeling for how big that might be?

Yes. I mean I'll use a rule of thumb. The cost base for hotel services is about EUR 1.2 billion, right? And the inflation, as you can see it for the current year, is probably to the tune of 5%. And again, the 5% is of 2 different nature. One is on the salary that you have to provide to people, so the increase that you have to provide to people. And that's why the comment I made on the post-COVID [ era ] and the reflection of resources as an effect on top of the comment on the inflation. And then what we do and in this cost base, you've got a lot of things that you buy. You buy services in order to run your computers, your mainframes, your data centers, you buy services in order to do some marketing actions. And that's where the inflation of those things that you buy outside of the company, which is probably a bit less than 50% of the total cost base, the cost base of EUR 1.2 billion. The percentage of increase on those is probably not reflected today fully. Let me give you the example of IT services. The IT services have increased in some cases by close to 15% to 20% in what we buy from outside. And so the question then becomes what will it be going forward? And do you see in the numbers and in the contracts today, the true reflection of what that inflation structural change in the world is heading towards. And I don't think we are yet at that stage. That's why there is a little bit of cautiousness in the way I answer your question. But I provided you, I think, some good elements to size it.

Our next question comes from the line of Richard Clarke at Bernstein.

I guess first one sort of along the similar lines. I mean in the past, you sort of suggested some quite big numbers for sort of recovered EBITDA. At the full year results, you said we could just add the cost savings to the EUR 770 million and we get to EUR 970 million. If we go back to 2018, you used to guide to EUR 1.2 billion of EBITDA, lots of uncertainty in the second half, take that, but does this inflation throw away those numbers? Do you have a sense of what EBITDA now would be in a normal year? And then the second question is just on the services to owners. In the past, obviously, you've explained you don't report the same as your peers because service to owners can be a profitable segment for you. It's another quite big loss in the half year. So what's the pathway there? Is that going to trend to a profitable segment at some point? And maybe what's the guidance for the second half, particularly in services to owners? And then just on the transaction. You've sold ResDiary, which is a fully consolidated business, and swapped it for another minority stake. So just trying to maybe understand that. It seems a bit away from the pathway of simplification that Accor has been on in recent years.

I'll start with the STO, which are absolutely true what you say, the STO is a P&L that is a profitable P&L in a normalized world, most definitely, right? And so we went through that many times with you. It has been a very losing P&L for the last 2 years because there was no top line, and so they were fixed costs and no top line. We've been adding to that all the actions that you know in order to optimize the cost base. Where we are currently is there was a special effort in H1 on sales marketing distribution and loyalty to make sure that we do capture our fair share of the rebound. And I think on that one, you see it in the RevPAR, I mean we've been doing well. And this is not something -- this is a timing, if you will. So there will be an improvement that you will see on the STO. So the STO will come back to a profitable level. And when you will get the full benefit of the second part of reset, which is much more IT-driven, system-driven, that will also pop in, in the number of sales and marketing distribution and loyalty. So you will see quarter-after-quarter that STO P&L improve, and it will come to a profit level. I love the question because I've been so much asked about are we going to -- you cannot make a profit on that line. So since I've been listening to all the comments you told me, I have decided not to make a profit on that line. Just joke aside in order to make it a little bit more than purely numbers here. But it's a very good question. I think my answer is very clear on that one. It is a profit P&L. On the competition that you do, I want -- when I was answering Jamie, a little bit that [ out ] on the effect of reset. The competition that you do is the right one, i.e., you take 2019, you [ already said ] everything being equal, you've got EUR 200 million EBITDA. What we've been stating answering question, there is inflation. And the question, what I said today is that I don't know the level of inflation on a running basis in the business going forward. And so that's, I think, where we stand currently. I think we'll know more as we're going to progress. But today, I think nobody really knows what is the real effect of the inflation level that you see on running operation. And that's why, again, we give a guidance for the full year, which is the EUR 550 million and which incorporates the fact that there is incertitude on that cost base. And I think there was a...

Yes, when it comes to -- Richard, when it comes to REEF and ResDiary. ResDiary is a company based in Glasgow that probably many of you don't know much about, which is kind of actually a booking platform to get a better occupancy in 5,000 clients through software. We bought this company 5 years ago. It was actually run by the Asian Singapore organization and with [ Amin Hai ] at the time head of food and beverage. It's the company has been growing, software has been updated. We then met with a much larger company that some of you may know, but it's a privately held company by the name of Reef, R-E-E-F, which is based in Miami, which is today the largest dark kitchen operator in America. It's an asset-light model, and they're growing through different parking lots, which is thousands of parking lots in America and growing very fast. They have one thing which is very unique for us, but we should be talking about it at a much later stage, which is probably at the end of the year. Why? It's because we're going through testing and pilots exercise, notably in the U.K. as we speak, on doing 2 things at the same time, is having the recipe, the business model of Reef being imported in some of the eco-midscale hotels of Accor in a nonprofit revenue-driven site, where we have not enough occupancy in a hotel or because the clients of the hotel are actually dining elsewhere, where we can be importing a much cheaper operating expenses which you know, 80% of what people want into an eco-midscale hotel happens to be either pasta, Caesar salad, hamburger and I forgot the fourth one. It's -- they do it faster, better, cheaper and probably have the time to deliver to the room, but why would they be interested to invade the space of Accor is because by doing it, they may not make much money on the occupants of the hotel, but they use that satellite kitchen to provide to the outside community. So the money they make in the vicinity and the streets around permits them to operate in the hotel. So my client is happy because it's cheaper, faster, better and they are happy because they have a much better revenue base outside the hotel to service. So it's a big endeavor. But for one of the first time in my life, I decided to be quiet, not to talk about it until we come back to you with a proven recipe model, which could be scaled up all over Accor in different segments. So let's be patient. We'll meet again probably by the end of this year. And with the Reef organization, we'll sit down with you. Reef is a multibillion-dollar organization. So it's not a small player.

Just Richard, I was thinking to your questions, and maybe I want to give you an additional angle to help understanding why I say what I say. When you look at the occupation rate today, we are 13 points below what we used to be doing in the same period 2 years ago in 2019, H1 2019 versus H1 2022. So the occupation rate is not at all at the level that it used to be. And we all know why. It's a recovery. It has improved significantly, but it's not at the level of occupation rate. On the other hand, you've got a beautiful pricing. I mean, the pricing on H1 2022 versus the pricing of H1 2019 is up by 9%.

Club sandwich is the fourth item. Club Sandwich.

And so 9% of club sandwich which -- so 9% is the increase in prices. So then the question is why is the pricing so good? Because first, this is what we wanted and the strategy that we've been applying. But it's also the fact that you've got inflation and costs in the hotel. And hence, the guy in the hotel has no choice than to increase his prices if he can in order to get the bottom line that makes sense, all the more that is coming out of 2 years of COVID crisis. So part of the improvement in pricing is management decision, but it's also the effect of inflation. So the question that you may ask yourself is what's going to happen in the future? Can you keep that pricing power? If you're able to keep that pricing power and get those prices to those kind of level, i.e., something that, to some extent, does offset the effect of the inflation on cost, then you have something which is going to be very nice. If you can't keep the pricing at the level that it is, then what will happen is that you will have the inflation on the [ car ] space, but then you won't be able to offset it. So you need to see how when occupation rate grows back, and it will grow back. Sebastien introduced it, you see the value driver. I think all of that is going only in one direction, which is an improvement of the RevPAR that again, I don't want to disclose that you guys are smart, you can figure it out. You need to then see how it's going to look. And I think time will help in order to get that assessment right. That's maybe another way to answer your question.

Our next question comes from Jaafar Mestari from BNP Paribas.

I've got 2 questions, if that's okay. And firstly, on the marketing costs that were extra in H1, are you able to quantify how much was in the H1 EBITDA and will not recur in H2, will not recur in H1 '23? And on that topic, maybe also clarify what you're saying there on those marketing investments. Are the extra costs a good arbitrage in the short term, because if you did not spend as much then the OTA commissions would have anyway led to the same EBITDA? Or are you saying they're a good bet on the future because if you did not spend them, you would have delivered higher EBITDA, but that's the long-term position on customer stickiness, et cetera, yes, those marketing costs, please?

Yes. I mean it's both short-term and long-term type of things. I mean, let me give you an example here. One of the ways that we've been battling the OTA, or more generally various channel of this, of indirect distribution, whether it is GDS or OTA, that's what I call indirect in that discussion. Some of the investments are done on the app, right, on the application because it's one way to be having a very [ cautious ship ] of distribution cost for both Accor but also for the hotel owner, which in the end is also what we are looking for. And so that investment is not done in the quarter for the quarter. It's something that you do that you accelerate here because you know that it is the right strategy, but we pay off of our [ sale in ] payers. You've got other things which are much more add up in the period for the period, which are marketing campaign that we've done in Australia because there was a wonderful winter opportunity there because people were not able to travel outside of Australia easily. And so they have been boosting all those local marketing actions. And this is really, I would say, one-off of the period for the period. So it's not as if it's only one thing. It's a combination of the 2 here. But we've been obviously making sure that as much as the -- I mean, sorry, that the effort on what we will benefit for more than 1 period is where we spend the money.

Okay. And sorry, are you able to quantify those? Is that something you've estimated -- quantify?

No, I won't quantify it for you. It's in the EUR 550 million. I told you that the M&F margin is more or less the level of 2019, slightly less. So you can assume that the M&F margin will continue to be very close to 2019 level in the second part of the year, i.e., close to the 70%, 72%, 73% that we've been experiencing. And then by delta, you know what we've done on SMDL.

Okay. And on the second topic, if that's okay. luxury and lifestyle, I'm sure you will have full historicals for us in the new reporting structure at some point. But at this stage, luxury and lifestyle should be about 30% of free cash flow and probably 30% of EBITDA. Okay, what do we know? We know Ennismore stand-alone should be about EUR 110 million? We know Fairmont, Raffles if you've delivered the synergies, should be around EUR 200 million. Sofitel stand-alone, honestly I don't know, but no way it's not double digits Euro million. So we have more than EUR 300 million of EBITDA potential here. What are we saying? Are we saying it takes a long time to get there? Some of the Fairmont synergy is still getting there. It's not quite EUR 300 million now. Or are we saying this is a company that, if that's assured in the next 24 months, that's EUR 1 billion of EBITDA for Accor Group?

Well, it's -- I'm almost asking you to -- and I know you don't like it, but to be patient on this one. And I know your job is to prepare investor to project themselves. We're not on [ 2 level rees ] of new organization as of yet. At this minute and for 2022, we're running on the current organization with your model and the model is working well. Why don't you wait until probably mid next year, when you'll get historical, you'll get proper information, you'll get a proper assessment, but do it over the phone like this in a minute. I'm going to be guiding you, you're going to be not understanding exactly what I said. It's not going to be enough, and we're going to go end up in exactly what I don't want, is complexity, you being puzzled, this being fuzzy. This is exactly the opposite I want. So sorry to be that blunt. Let's wait until that new organization is in place, and we'll have plenty of time in 2023 to give you all the correct information.

Our next question comes from Andre Juillard from Deutsche Bank.

All of them have already been answered, but I wanted to come back on the pipeline. Could you give us some more color about what you see in the future signature and the timing of the opening you're expecting on the second part of the year and next year. What is the contribution in reality you are expecting from the new openings? Coming back to the cost base. So you've explained some things about marketing costs, inflation and so on, understood. But I wanted to have, if possible, a little bit more visibility on the midterm view you can have and how you can manage this cost structure and what we can expect in the future? Because I think that everybody was expecting the contribution of the EUR 200 million. But in reality, we are permanently or almost permanently seeing some new costs coming on that side. So some clarification will be appreciated. And last question on the disposal of the headquarter Sequana, can you update us?

Yes. I mean, Andre, I think on the profitability and all of that, let's step back 2 seconds. We come from minus EUR 400 million 2 years ago, right? We were at EUR 0 million of EBITDA 1 year ago. We are saying now that we are at EUR 550 million of EBITDA in a year, which is still a turnaround year. So if you just continue to project that kind of dynamic, you can see that next year is not going to look bad versus what 2019 was as an absolute number, which was the EUR 770 million, if you recall. So I think here, I don't want either to give something which is a negative view or too negative view on what's happening on the cost base. There is one thing that nobody foresaw, which is the damn inflation, right? And so I think that's the only thing really that we're putting against reset. There is not like 5,000 things that I'm putting against it. I'm just saying that unfortunately, it's much more than what I anticipated here. The SMDL thing, as I've said before, is a timing and that P&L will come back to where it should be, i.e., a positive position over time. So I think just to maybe put a little bit of a step back in all of this discussion. The dynamic is very good, and we're giving you a floor of profitability. And so we'll make sure that we beat that floor. I think that's one thing. On the development, Sebastien kind of mentioned it briefly, we already had a very strong month in July. There are in development no linear path. Everything is just chunk of things happening one way or the other one, or can be chunk of things happening one way or the other one. That's the [ covidio ] portfolio that we had discussed in the Q1 call. And I can tell you, in July, we closed the [ tuka ] portfolio in Australia, which goes exactly the opposite way. So I think today, there is one assumption that we make, which is that Asia will turn around in H2. If you look at the figures that I showed and if you look more importantly at what's happening in the month of July in China, the dynamic is very, very good. With that dynamic, what it's going to mean is that people will accelerate the instant [ noodle ], i.e., those openings that goes in the year for the year, and they're going to release in fact, everything that they've been keeping on the back burner for many periods. And the rest of the world has, in fact, behaved quite nicely, and there are some good things that we can do. So that's why on the path to net unit growth, the 3.5% is knowing what we know today, a good number for the full year. Did I miss any of your questions?

As per Sequana, [ they had for we here ] and where we are, it's still an asset held for sale. We still have a broker [ Colius ] for that matter. We still have ongoing discussions with different set of investors. The question that we confronted with, which is a question on both part, the buyers and the sellers, which is us, is the longevity of the engagement we need to give in order to fetch our number in terms of duration of the lease. And the subpart of the duration of the lease is, of course, the impact of flex office. How many people are back in the [ tower ]? We know for a fact now, which is true in all different organization. You have very few numbers of people coming on Monday and on Friday, and it's fairly good on Tuesday and Thursday and exactly half a bit on Wednesday. So the occupancy level of this tower is vastly different today than it was pre-COVID, that's okay. We can probably still go for long-term needs. But I want to make sure before we make a wrong decision engaging our core for the next 9 years that we assess properly what is the level of square meters that we need for a long-term period. That's -- and which is why I truly believe let's take our time here. With only 6 months after COVID, we have a lot of different tools, a lot of different way of measuring the occupancy, the usage, the frequency and what could be done with such a big and large tower, but I want to make sure we make the right decision for the next 9 years to come. That's what it is. It's just assessing better the nature of the labor relationship, which is different today, as you know, Andre, than what it was a couple of years ago.

Our next question comes from the line of Sabrina Blanc from Societe Generale.

I have a question regarding the AccorInvest performance. I remember that you already mentioned that as an asset-heavy model, it could recover faster than Accor. So I would like to understand at which level of RevPAR in Europe is required to be at the breakeven? And I have another question regarding the Ennismore disposal and the 10%. Could you come back on the reason why you have decided to sell those 10%? My question behind that is if Ennismore is so good, why don't you keep it? And does that mean that the buyer could be able to invest more in the lifestyle and it's one of the reasons why you are selling?

I'll take the question on AccorInvest. AccorInvest is, as you very well know, Sabrina, a leveraged, much more leveraged business model. So fundamentally between H1 2021 and H1 2022 because of the RevPAR situation that I described in Europe, their revenue kind of tripled, and their bottom line moved from a significant loss and the significant loss, you can see in our numbers by taking the loss in share of the profits and multiply it by 2, and basically coming to something is very close to 0 because we've got EUR 30 million today. So it has significantly, significantly moved. In fact, the movement on the bottom line is probably to the tune of EUR 500 million to EUR 600 million of net income. So I won't disclose numbers which are numbers of a company that I'm not supposed to be disclosing numbers to you, but I gave you kind of the answer to your question, which is super significant turning around. And today, a level of net profit, I'm talking net profit, which is already not far off the 0 line with the current RevPAR.

The -- on any small, Sabrina, your question is very legitimate. We -- and to go back to one of Richard's question before, Richard Clarke on simplifying, you noticed, each of you, that we did go to simplify and consolidate all the lifestyle brand in which for many years, we had minority interest, be it 25hours, being Rixos, be it Mama Shelter and many others. And of course, SBE. So we went from minority interest to majority interest in the years of 2020, 2021 onwards. Precisely because we wanted to consolidate what is a very interesting segment and probably the fastest-growing segment in the industry, and in which no question Accor is by far the leader in terms of geography, in terms of scale and in terms of numbers of brands, which are 15. So it is a big endeavor that we've been thinking and looking after for 6 years. Having assembled all the brands, having decided to create an autonomous entity based in London with full authority in terms of decision-making, in terms of administration and marketing and social network and brand content, I am the Executive Chairman of this company looking after as a jewel. We being called by Middle Eastern investors who not only see the growth, but see also the interest for their countries to diversify into new segments and precisely that segment, and we've opened great hotel SLS and Mondrian in Dubai and in Doha, we're by far the best performing hotel in this region. So people knocked on the door, and decided to engage with them precisely because they wanted to participate in a more active manner with further resources, notably on asset heaviness on them providing investments to further growth, faster growth of any small brands across the Middle East and Africa. And I wanted Ennismore to remain an asset-light company. So we've been engaging. And of course, we've been assessing with them what is the valuation they will be putting on that new Ennismore saga. And new Ennismore mean the existing Ennismore you guys know as of the 1st of October of 2021, which is the time we closed with Sharan Pasricha and merging with Hoxton, but then we brought in the 70% we own in Rixos and 48% we own in Paris Society, which is by far the largest and best restaurant event night club operator in Paris and expanding in Dubai and expanding in London. So by doing it that way, we came up with 38x 2022 multiple and 23x 2023 multiples. And by doing it, you kill 2 birds with 1 stone. One is proving very high valuation, probably far larger than what the investor community was looking after probably between 2x or 3x better. And I think it is time also for Accor prove to outside world that what we've been conducting is of great nature and of great value. And number two is because of them investing, improving the value, then we have access to outside capital to faster and further growth Ennismore. Those are the 2 reasons while keep consolidating that venture. We have time for one more question, and then we're going to have to wrap up.

If I may. Could we have more [ color variety ] about the business clients for the rest of the year? You have mentioned some October 1, for example, but what is the mood?

The mood is good. I should have started that way in the introduction. We -- I can tell you, for the last 3 years, I've never felt better. And so do probably my dear friend, J.J., it's way back. Accor is clearly back, and I've been saying in February 2022 should be the year of Accor or 2023, we'll get a better RevPAR than many other geographies. We have rebound of all the different brands. We have margin coming through, drop-through, better pipeline. Accor is back, count on me. So mood is good.

We have one final question, which is a follow-up question from the line of Jaafar Mestari.

And sorry to insist on just one point of detail. You mentioned, Jean-Jacques Morin, you mentioned full year '23 EBITDA is not going to be bad compared to 2019 pro forma. Just for context, it looks like consensus has full year '23 EBITDA which is fully back there, it's anywhere between EUR 760 million and EUR 780 million. So was that just a qualitative description and at this stage, you have no further color? Or is fully back at '19 levels a bit punchy at this stage in your early assessment of full year '23 EBITDA?

I was -- I have not done the budget for next year, right? We're going to do that post summer. But just look at the dynamic of the numbers and when you look at the dynamic of the numbers with the EUR 550 million, you can easily draw the line and figure out that the numbers that you are quoting are not bad numbers. That's the only thing, Jaafar. So I'm just trying to -- as much as -- we're trying to explain what we can explain. And what we don't want to explain is what we don't know. And so I think we just need a little bit more time to see how all of that is going to unfold, and we'll know that by the end of this year.

Again, thank you, every one of you for attending this call, and then we'll probably enjoy spending individual time with many of you. And Pierre-Loup [ anesta ] the best of us, is here in front of me, looking forward to have more granular discussions with many of you. Many thanks. [Foreign Language]. Bonjour, everyone. Bye-bye.