Accor SA (AC) Earnings Call Transcript & Summary

Good morning, and welcome to the Accor Group's H1 2024 Results Conference Call. Please note that this conference is being recorded. [Operator Instructions] I now give the floor to Mr. Sebastien Bazin, Group CEO of Accor to begin this conference. The floor is yours.

Thank you very much, and good morning, everybody on the phone. Very happy to be with all of you. To my next here, of course, have Martine Gerow, our CFO, who's going to be doing some kind of a tandem with me with each of you for the next, whatever, 30 minutes or 1 hour together. So I'm going to start fairly quickly with the first slide of what is presented to you, and I hope you guys have it easy. It's actually Slide number 4, which is the first one. There's 2 interesting surveys being done by the same organization, which is Oxford Economics. One was dated in June 2024, and you have it on the left, which is really trying to tell us what are the consumer spending likely to be for the year of 2024. And it was a precise question on travel spend. And what you see in that very simple chart is people acknowledging that, I guess, for the year 2024, only 18% intend to spend less than what they've done in 2023, 45% likely to spend the same, and then you have a hefty 37% where people are attending the inquiries that, I guess say probably going to be spending 37% more than what they spent in 2023. And that's actually reflected in the numbers of Accor and many other probably travel hospitality companies in terms of demand and in terms of spending. What's probably even more interesting is what you have on the right, because that really takes us forward, not only for '24, but I guess projection for 2025. And that one is a bit 20,000 feet altitude. Asking a different question, and it relates to, many of you remember, the base of international travelers in 2019 was 1.5 billion. And we're trying to compare where are we compared to that base of travel in 2019 as of today and likely to be in 2025. And of course, let's go region-by-region, but I'll go rather quickly. On Europe, we are, and we should be in 2024, 3% above at the level of 2019, and we were lacking by 8% last year, which you all know. But it's predicted to be 11% better than the level of 2019. You take North America, we're probably flat this year compared to where we were pre-COVID, likely to be 10% double-digit up also in North America for next year. You have the same double-digit growth in Latin America in terms of projections by 11%. You see, and you will be surprised, when it comes to China and of course, Asia, including China, we were lagging by our 1/3 last year. We're still lagging like 9%, 10% in terms of international visitors this year, but it should be also 10%-ish for 2025. Not a surprise either. We enjoyed all of it when it comes to Middle East. Super strong rebound and acceleration pace in last year by 11%. Still strong, even stronger, 31% this year. And look where we likely to be in 2025, 50% higher than what it was in 2019. So for the World, kind of a flattish 2% growth this year and likely to be double digit growth in 2025. Those numbers are super encouraging for groups like Accor being so well diversified in so many hosting geographies. Then we're going to go to another slide and on purpose we give you something that, of course, many of you have dissected in terms of actually more granular on what Accor is. But we purposely wanted to make it easy for people to read on, where are we in terms of room counts for the Group? Where are we in terms of fee volume today in the portfolio? But where are we in the pipeline? And I think it is an interesting slide and I'm going to go and make some few comments. You're going to see in a minute by looking at the numbers where you have a better fee per room as opposed to a lesser fee per room because when you have in North America, 5% of the portfolio contributing to 13% of the fees of Accor. Well, that tells you that the fees are pretty rich in America. And we have a 3% pipeline portfolio in North America. I wish it could be bigger, but it is what it is. But it's still a very high contributor by 12% total volume of fees as a pipeline for North America. Go all the way to the right, because that's exactly the opposite read when it comes to APAC, and that includes China, which is why you have a 34% portfolio room inventory in that region, but it's only 18% of the fees because the fee per room is probably a 1/3, if not 1/4 of what it could be in other mature markets. And you see the pipeline for Accor is 51%, but it's going much higher, 31% of the fees. Why? Because we're getting in the pipeline a much greater fee per room than we had historically. You go for middle of the page, Europe and North Africa, 43% of the fees, 49%. We don't have a pipeline that represents the size of our network, which is absolutely legitimate because our network is so large and so profound, and we decided to go much deeper in the Middle East, in Southeast Asia, Indonesia, and other places. So you go to the Middle East, that gives you the right indication, 10% room counts, 14% of the fees. Look what it is in terms of pipeline. 28% of fee contribution with likely, this 15% of our pipeline in that region. You know we're going and spend a lot of time in the Egyptian market, in Dubai, in Abu Dhabi, in Qatar, and of course in Saudi Kingdom of Saudi Arabia. And then you have South America, 8% of the room, 6% of the fees, and a tiny 5% of the pipeline, and 3% of the fees. So that's a pretty good read of where Accor is going and probably priorities of development. I'll go to the next page. It's really giving you in 6 or 7 different sentences where are we, how do we feel, and what is being achieved. So you have the word achievement on the top of the page and very much related to the new organization put in place on 1st of January 2023. Premium, Midscale & Economy. You guys might have seen it. We celebrated the 50 years anniversary for Ibis, and it's been very well accepted by a lot of people. We decided to do a major new brand campaign, brand positioning for Novotel with WWF, and a lot of it is climate-friendly, protecting the oceans. We are focusing on deeper market, including Japan, and you've seen it with the Daiwa portfolio signing, which gets us into a second leadership position in Japan. And then, as promised, and Jean-Jacques is actually in the room with us, we decided to deliver on a better margin in terms of execution, in terms of operating leverage for PME, and we already enjoyed a 100 basis point increase in EBITDA M&F margin when it comes to PME. You go to the Lux Lifestyle, then you end up with different messages. It's all a matter of global leadership footprint. I talked to you about Middle East, Asia. We're going fast. We're going deep, and we accelerate in many of those questions in terms of accelerating our leadership, preserving it, and why not take leadership where we were not the leaders. The guest experience, we've been adding a brand to the portfolio a couple months ago called Our Habitas, which is very much also vegan, protecting the planet, and something very resorty interesting. Then we've done a partnership with LVMH on Orient Express, which is a very nice confirmation that we had to take us very seriously Accor when it comes to Lux Lifestyles to be able to get partnership with those tycoons of the world, and certainly with a brand like Orient Express. So it is really going firmer on what do we stand for. And you've seen a lot of effort and a lot of achievement when it comes to Sofitel, by the way, which have been enjoying a 60 years anniversary for the year of 2024. And then accelerating the pipeline, the development, the signing, the opening. And you're going to see that into any small and lifestyle numbers where the pipeline, which is 12% above for the last 12 months. And then down below, you have the engine, the machine, what sticks us together in terms of shared platform at the corporate level. We've done and signed a big partnership with the best of the best, Amadeus, when it comes to CSR. And we've done it kind of actually following what's been done with ISD some 10 years ago and recently with Myriad. And it's about time, I guess, we joined, and benefit from the skill and the technology and the tools. Revenue management system, similar thinking, similar execution, similar signing with IDeaS, which is one of the leaders when it comes to RMS. And then going and showing that, I guess, we could have all the right KPIs to join the carbon disclosure project A-list. There's not that many people on the A-list, and we're super proud that, I guess, we've been able to join it confirming a lot of things being done by the CSR people in this organization. And then, Martine, last slide for you, probably one of the most telling, which is on did we deliver on H1 result? I remember, you remember, and we live and die by it on what has been announced in the Market Day which dates 1 year ago in May 2023, and we gave you a lot of KPIs. And we're going to get back to you every time we're going to be on the phone, every time we're going to be announcing numbers, every time we're going to be forcing ourselves to benchmark where do we stand compared to what was promised to you, and you see the actual for H1 on the left column and you see on the right column what was said at the time which was an average growth for 2023 onwards until 2027. So RevPAR, first semester, plus 6%, which is well in excess of the 3% to 4% that we got a due for. Net unit growth, 4.1%, better than the 3% to 5% range. M&F revenue growth, 10%, which is the high end of the range, the target between 6% and 10%. Service to owners, EUR 17 million, which of course is positive, and that was promised to you. Group EBITDA growth, 13%. We're very, very happy with the EUR 504 million EBITDA for the first semester, which is a record number. Never Accor achieved EUR 0.5 billion for 6 months in the first semester, which is only up around and actually exceeding the 9% to 12% that we guided. And the cash conversion, we cannot do it on a semester. It has a lot to do with working capital, and the guidance was done on an annual basis, and we cannot really do it as easily and we dont't -- and it's actually won't mean anything. And then when it comes to this return to shareholders, we promised EUR 3 billion. You know what we've done last year. We've done another EUR 686 million for through the first semester. So we are way in line and probably something faster than what was contemplated in May 2023. So that's where we are. We feel confident. We feel strong. We feel we control the controllables, which was JJ's line to me and to many of us through COVID, this company is in good shape and certainly getting and enjoying whatever we can take from wherever the demand is with the brand needed, we are there. And we're getting through some difficult environment. Of course we are. But we're also getting through an enjoyable environment and we make the most of it. So we're going to go back on the Q&A, but I just wanted to share with you that this Group, myself, the team, are extremely proud of having navigated through a difficult first semester and getting to where we wanted to be and probably marginally better than what we felt we would be at this very minute. Thank you so much. I'll leave the floor to Martine.

Thank you, Sebastien, and good morning, everyone. And thanks for attending the earnings call for the first half. So I'm going to start with the financial highlights, which on Slide 9. And you heard from Sebastien that we are very pleased with our performance in the first half, which is at the high end of our mid-term guidance. So overall, you've heard it from Sebastien, demand was strong, demonstrating the resilience of a portfolio which is not only well-diversified, but also aligned with what are the highest growth geographies. So in the second quarter, the RevPAR was a solid 4.8%. H1 was at plus 6%. As we saw in the first quarter, pricing remains the main driver. We had a 3% increase in pricing in the second quarter. So that's about 2/3 of the RevPAR. The occupancy was also up by 1 point, and we closed the quarter at 68%. As we had expected and as we had already shared with you in the first quarter, we're seeing a steady acceleration in our net unit growth, which reached 4.1% on a last 12-month basis in the second quarter, and that's a point up from where we stood at the first quarter on an LTM basis. The conversion of RevPAR and NUG into revenue was very solid. As you can see, M&F revenue was up 10% in the quarter, reaching EUR 673 million. And overall revenue was up 11%. The combination of solid revenue growth and cost discipline drove a 13% growth in EBITDA, EUR 504 million for the first half, and as importantly, an improvement of 160 basis points in the M&F margin in the first half versus prior year, which, as you may recall, is a goal that we are pursuing very actively. So that puts us for the first half slightly above the 9% to 12% CMD EBITDA guidance we shared with you 1 year ago. Earnings per share at EUR 0.90 is up 11% in the first half, primarily from the cancellation of the shares we bought back over the period. And finally, last but not least, we returned close to EUR 700 million to shareholders through a combination of share buybacks and dividends. And that translates into what we feel is an attractive yield of 7.9% of our market cap as of January 1, 2024. So in the first 12 months, since our CMD, we will have returned a total of EUR 1.1 billion, which is slightly over a 1/3 of the EUR 3 billion capital allocation we committed to in June of last year. I will turn to Slide 10 and give you a bit more color on RevPAR for each division, starting with PME on the left. PME posted a second quarter RevPAR growth of 4%. As you can see here, it's driven by continued strong pricing for about 70% of that growth, and occupancy gain was up in the quarter, accounting for about 30% of the year, so about a point in the quarter. The rate was actually up 3% year-over-year, and where so occupancy rate, sorry, was up 1.68%. The performance in PME was somewhat contrasted, as you can see here across the regions. In ENA, which is Europe, North Africa, performance was contrasted with negative performance in France, upset by robust growth in Germany and the UK. In the second quarter, ENA RevPAR was up 1%, with a 2% growth in rates, and a point declining occupancy in the quarter. And that was primarily driven by France, where RevPAR was down in the quarter, and that was solely driven by Paris, which also suffered from difficult comps. I may -- you may recall that we had the air show of Le Bourget in 2023 in June, and June actually was a very, very strong month with occupancy at 86% in Paris. The province here was actually better. The province had a positive RevPAR growth in the second quarter. In the UK, RevPAR growth was in line with the first quarter. The [ province ] continues to perform slightly better than London. And in Germany, we had a very good, as expected, RevPAR in the quarter, particularly in June, which was up 17% on a RevPAR. And that was driven by the European Football Championships. MEA APAC continues to be a very dynamic region, solid growth in the second quarter of 7%, also mainly driven by rates, and very, very strong momentum in the Middle East and Southeast Asia. Middle East, very solid. RevPAR growth in the high teens in both UAE and Saudi Arabia. And of course, the quarter benefited from the Hajj pilgrimage in Saudi Arabia, which was in mid-June. Southeast Asia, also very strong, also double-digit RevPAR growth. Countries like Thailand are benefiting from the gradual recovery of the Chinese outbound tourists. Pacific, we saw an increase in occupancy, but RevPAR was slightly negative, and that is driven by what we see as being lower demand on the leisure on the East Coast. Now, Australians are actually favoring traveling outside of the country. Now, that benefits Accor, given its strong presence, notably in Southeast Asia, which I just commented had double-digit growth, but obviously it impacts the domestic market. China continues to be challenging, while Chinese outbound traffic is recovering as expected, and again, benefiting Southeast Asia and the Middle East in particular. The domestic market is more challenged, with lower than expected corporate demand, and that is impacting rates. Americas very strong in the quarter. RevPAR up 12% versus '23. Very strong event calendar in Brazil, in Sao Paulo, and in Rio. Moving to the Luxury & Lifestyle division, RevPAR was a solid 8% in the quarter. As you can see here, it was mainly driven by occupancy rate was up 3% in the quarter, and occupancy was up 2 points in the quarter to 66%. Luxury, RevPAR, growth of 6% in the quarter. All brands are performing well, primarily driven by occupancy, but rate was also slightly up. Lifestyle, an impressive 14% growth in the second quarter, driven by rates and really driven by resorts in where we have very strong momentum. We continue to have very strong momentum in Turkey, Egypt, and the UAE, which benefit from still very strong leisure demand. I'll now move to the networks on Page 11. As I shared in my introduction, we continue to gain traction towards our mid-term net unit growth guidance of 3% to 5%. We closed the quarter at 4.1% on the last 12-month basis. That puts us squarely in the middle of our mid-term guidance. And we had good momentum in both PME and Luxury & Lifestyle. I'll start with PME on the left side. At the end of June, the NUG for the [ PM ] division was 3.7%, and that is at the high end of our mid-term guidance, which was 2.5% to 3.5%. The openings in the second quarter were boosted by the opening of 6,000 rooms from the Daiwa portfolio, which is in Japan, and that will be -- those properties will be rebranded under Mercure and Grand Mercure. Trend was actually slightly lower than the prior year in the first half, although we expect this to increase in the balance of year in line with our expectations. Our pipeline is down in the first half, and that's primarily due to the unusually strong level of openings in the first half, driven by the Daiwa portfolio I just mentioned, but also openings in other regions, which were also very strong in the first half. The M&F revenue per room, as you can see here, is holding at EUR 1,200 per room. Now, moving to the Luxury & Lifestyle, whose portfolio grew by 6.9% over the last 12 months, and that is driven by Ennismore, which grew at the remarkable rate of 24% on the last 12-month basis. We opened 3 MGallery and 3 Sofitel in the second quarter. One of the MGallery was actually in Mexico. The acceleration is fueled by a solid pipeline, which accounts for 44% of the existing portfolio of that division. And the revenue, M&F revenue per room is EUR 4,000, which is an improvement versus where we stood in 2023. So at Group level, again, 4.1% on an LTM basis, straight in the middle of our guidance. Conversions, I know this is often a question you have, 68% of the openings in the first half and that's boosted by the Japanese portfolio. We'll close it to our normal 57%, 60% if we exceed that. I'll now move to the revenue on Page 12. Revenue up 11% in the first half on a reported basis. Reported growth is positively impacted by the consolidation of Potel et Chabot, which took place in October of last year, and that's partly upset by foreign exchange. So on a like-for-like basis, revenue is up 9%. PME revenue is up 4%, with very good growth in Management & Franchise, which is up 7%. That's one point above RevPAR, and it's supported with good incentive growth, particularly in the Asia-Pacific region. Incentives represented 34% of the M&F fees, and that's in line with the full year of 2023. And so that demonstrates the continued solid operational performance of the hotels across the regions and the segments. Moving to STO, Services to Owners, the lower revenue growth of 3% that you see here reflects really a baseline effect. We had actually called that out in our first quarter call, and you may recall that related to the cost reimbursement for the FIFA World Cup. In the second quarter, which does not have these baseline effects, STO revenue is actually up 11%. We're having very strong momentum from distribution and loyalty, which is pushing up the revenue in STO. Hotel Assets & Other performance remains driven by Australia and Brazil, and Australia was impacted by, as I commented, weak leisure demand, but also FX. Moving to Luxury & Lifestyle. Revenue was up 22% in the first half, with 15% growth in Management & Franchise. That's 8 points above the RevPAR growth, and that is driven by exceptional growth in fees from branded residents in H1 in Lifestyle. STO grew at a higher pace than RevPAR, up 9%, reflecting the growth of network as well. And Hotel Assets & Other, 84% growth. That's primarily driven by the consolidation of Potel et Chabot, as I indicated earlier. Turning to Management & Franchise, specifically on Page 13, 10% growth in the first half compared to 6% growth of RevPAR. So that's a 4 points positive distortion. And as you heard from Sebastien, that's at the high end of our CMD guidance. So I'll start with PME. Growth in M&F revenue was robust, as you can see here, across all of the regions and consistently above RevPAR growth, as was the case in the first quarter. And as I previously mentioned, this is supported by good development in incentives, notably in Asia Pacific. Regarding Luxury & Lifestyle, M&F revenue, again, grew at a very healthy rate of 15%. Strong benefit from the branded residences in the first half. We actually doubled down our efforts on this activity, which is going to experience significant growth in 2024, although I will point out that the growth will be skewed more towards H1, notably linked to a large resource branded residence in Dubai. I'll now turn to EBITDA on Slide 14. The EUR 504 million EBITDA in the first half, 13% growth year-over-year, above the high end, over 9% to 12% CMD guidance. EBITDA growth reflects mainly the drivers that we highlighted during CMD in June of 2023. So first, a sustained activity level, as you just heard, translated into solid operational leverage with M&F margin, as I called out, improving by 160 basis points versus prior in the first half. Strong cost discipline on Services to Owner with a slightly positive EBITDA, as you can see here, and the integration of Potel et Chabot in Hotel Assets & Other. So more closely looking at the PME division, also very good growth in EBITDA, 9%, EUR 360 million, that is at the high end of the CMD guidance for this division. M&F EBITDA is up 8%, benefiting from operating leverage with M&F margin improving by 100 basis points, and you know that this is a strong commitment from Jean-Jacques for the PME division. As for STO, EBITDA was positive, EUR 13 million. Hotel Assets & Other, slight EBITDA decrease, which is related to, again, the weak leisure demand in Australia and a somewhat unfavorable cost environment. Regarding Luxury & Lifestyle, EBITDA is up 13% to EUR 196 million. Very good growth in M&F with EBITDA up 20%, which drives a 260 basis point improvement in M&F margin for the division in the first half. As for STO, EBITDA is slightly positive, but it is below last year due to the ramp-up of costs during 2023 in this division, which was, as you may recall, created in January of 2023. As for Hotel Assets & Other, the growth in EBITDA mainly reflects the acquisition of Potel et Chabot. I'll now move to the rest of the income statement on Slide 15. We achieved a net profit of EUR 253 million in the first half versus EUR 248 million prior. EPS earnings per share, EUR 0.90 in the first half is up 11% and it's mainly from the impact of lower share count. So let me call out the main highlights. Depreciation and amortization increase is mainly driven by the sale leasebacks of our Paris headquarter in June of last year, and the integration of Potel et Chabot mainly. Very good performance in share of net profit from our equity investments, which as you can see here is up by EUR 40 million, and that is really driven by our 30% share in AccorInvest. In the first half, AccorInvest made meaningful progress towards its asset disposal program and that generated capital gains in the period, but the underlying activity is also performing very well. Net financial expenses, which are lower versus prior year, benefited from a favorable noncash foreign exchange movement. Tax expense increased in the first half on the count of, one, the activity recovery, but also the tax impact of the reorganization and the extinguishment of some of the net operating losses we had, particularly in Australia and Belgium. And finally, minority interest increase was driven by any small performance. I will now turn to cash flow. On Page 16, the recurring free cash flow reached EUR 120 million in the first half, and it is below last year for the following reasons. High cost of debt, which is increase, driven sorry, by the increase in net debt, but also the interest component, which sits in that line of our lease portfolio, and again, this is the sale-leaseback of our Paris headquarter. Income tax increase, mainly driven by the activity recovery and the extinguishments of annuals in Belgium and Australia, as I mentioned previously. Reimbursement of lease liability, again, the sale-leaseback of our Paris headquarter, and the consolidation of Potel et Chabot. Recurring investment was EUR 90 million in the first half. It's up slightly from last year by about EUR 10 million, and that's really driven by higher key money as we had anticipated and planned. Working capital change is negative EUR 123 million. We have a timing impact on our VAT, which is about EUR 23 million. And I do remind you that our working capital change is seasonal in nature, and we do expect this change to reverse in the balance of year and be positive for the balance of year in terms of working capital change. And finally, net debt, which was slightly above EUR 2.9 billion at the end of June. That's an EUR 800 million increase versus where we stood at the end of December, and it is mainly the close to EUR 700 million share buyback and dividend, as well as some acquisition we did in the first half, nonrecurring costs related to the new organization, and partial upset from recurring free cash flow. I'll now turn to Page 17 with our full-year guidance for 2024. Starting with RevPAR, we expect a RevPAR growth on a full-year basis between 4% and 5%. Given the solid start of the year, we're confident to deliver a full-year RevPAR growth that is slightly above our initial expectations and CMD guidance. Net unit growth is expected between 3% and 4%. This is in line with what we had signaled during our previous call, where we indicated that we would be towards the lower end of the 3% to 5% mid-term guidance. But it is still a robust acceleration versus last year, which was, I remind you, 2.4%, and reflects the trend we saw in the first half, taking into account the uplift related to the opening of the Japanese Daiwa portfolio, and as I call that, a slightly higher level of churning PME in the second half. Services to Owner, squarely positive. And EBITDA is expecting between EUR 1.95 billion and EUR 1.125 billion, and that translates into a 9% to 12% growth versus last year, which is, again, perfectly in line with our CMD targets. And with this, I will now turn it back to Sebastien for concluding remarks.

Merci, Martine. Just 2 slides for me, and the 2, of course, have significance. [ I want to ] -- as it's really an answer to why do people join Accor? Why do people work at Accor? And why do people stay at Accor? And it's really defining the purpose of this company and certainly a purpose that we share in between very different regions and very different cultures across the globe. And I love it that much because it was a 12-month exercise. We might have talked about it. I don't remember. In February, we were all together. But we had 50,000 verbatims from colleagues of this company on the planet. And we came up with what sticks us together. And it's come that way, pioneering the art of responsible hospitality, connecting cultures, with heartfelt care. And the connecting cultures, the care, the heartfelt, every word here has a very significant meaning and this is who we are, and this is what we battle for, and this is probably why we are performing as good as we could have all expected. When you go to the last page, you remember what we said in Capital Market Day, there was a slide from the management team, and that slide only talked about it's all about execution. Whatever it takes, we need to get there. So I just wanted to add probably 2 additional words to the last line of the 3-liner here, confirming sound and controlled business model. That's what we've been fighting for in terms of making sure that, I guess our business model was the right way, was rightly executed, rightly displayed, rightly understood, and making sure that we control the events because those are very different in nature in the world. And in the world of today, you'd better control as much as you could what you do for a living. That's where we are. I probably should open the Q&A session to many of you and happy with Martine and maybe Jean-Jacques if necessary, because since he's in the room, he might as well actually speak if you have a question for him. So let's go and welcome the first question.

[Operator Instructions] We will now take our first question from Vicky Stern of Barclays.

Just wanted to start firstly on AccorInvest. I think you've mentioned in the press release an equity injection there of EUR 67 million. The likelihood in your mind today that there'd need to be a further injection there based on how the asset sale progress is going. And in sort of broader terms, should we still be thinking about end of 2025, early '26 and sort of time frame of you exiting that stake? Second one is a bit broader. So we're sort of 1 year on from the new segmentation. The market doesn't so far seem to be sort of reflecting that rerating you've talked about for the Luxury & Lifestyle business. So can you just remind us where you stand on the possible actions that you might want to take at some stage to crystallize that value and what the time frame for that would look like? And then just finally on the here and now, how are you thinking then about RevPAR into Q3 and Q4? Seems like your guidance is decently confident, but just a bit of color if you are seeing any cracks anywhere. And specifically, within that, your view on whether the Olympics is still expected to be about a 0.5% positive for the group for the full year.

Thanks a lot, Vicky. On your first question, we did put in EUR 67 million. We've been warning everybody that he was asked and needed from the shareholders to participate in the M&A extend, in order to get what we got, which was a couple years extension for the debt of ACO AccorInvest. We have a conditional -- and I can share the number, there's a conditional similar EUR 67 million which could be reinjected from Accor into AccorInvest over the next 2 years. It has to do on the minimum level of sale program and asset sale that AccorInvest is currently conducting in the years of actually starting in '23, then '24, '25. We have different benchmarks. We had one and we have one at the end of July. We can tell you that I guess we sold more than the minimum. So it won't be triggering another capital call from Accor in July. So it's just confirming to you that I guess the pace and the amount is doing as planned and probably marginally better than planned. So we're going to have another kicker by the Fall and we're going to have another kicker by the end of the Winter in '25. So I cannot tell you whether we're going to be asked to put more money. As of this minute, I don't think so because we have enough buyers for the quality of the assets, but we're going to have to be more precise with you in the third quarter release post-summer. When it comes to the 1 year on, and of course, I agree with you, I guess we haven't had any benefit of any rerating of any sort. And we see that in Accor share price performances. I can only confirm to you, Vicky, what I said to you in February and March is I have a rendezvous close with the Board of Directors of this company. That rendezvous close is at the end of 2024, which is in December. And that was a time where I told each of you that we're going to have with 2 year passing on achieving performances for the entire Group. And certainly, for the 2 divisions, this is a time where we're going to have to assess, are we properly valued in terms of pieces, what is it that the company should be thinking of doing or not doing in the year of 2025 probably the 12 to 18 months between '25 and Summer '26. That's what I promised to each of you. That promise will be fulfilled, but you need to be patient like I am for getting those 4 quarters in a row for 2024, and then we'll get back to you with proper details, if any, by probably the release of 2024 numbers in March or April, but that has to be first conducted with the Board and reflected by the Board members and the management of this company, so. But we are acutely aware that I guess we, the value of our assets are not today properly reflected in the share price validation of this company. When we go to Q3, Q4, you want to?

Sure. Vicky, so yes, we're confident in terms of our -- how we're looking at the second half. Which we -- that's why we upgraded the RevPAR guidance from the CMD. In terms of where we -- giving you some color around that, we expect still very good momentum in the Middle East, Southeast Asia, China. We're not planning for that region to recover given the environment. Europe, North Africa, we should have a good third quarter given the Olympics. And with Luxury & Lifestyle, we expect to see continued strong momentum in both of those segments.

Sorry, can I just circle back on the first question, Sebastien? Are you still, based on what you can see today in terms of the asset sale process then, the time frame that you're expecting in terms of when you might be able to exit the stake?

We shared altogether that there were conditions to be met first. The first was to be able to sign an M&A extend. So did we -- 3 weeks ago to have maneuverability so that they can postpone to Summer 2027. We need AccorInvest to be back on its feet in terms of performances, which is exactly the case because, as we do, they have very good performances. They need to -- third, they need to deliver. The level of debt is too high, and that's why they're conducting the asset sale program, which, by the way, not only gives proceeds back to AccorInvest, but I guess enhances the margin and profitability because what they do sell is of a lesser quality than what they keep. And then we've been discussing between Martine, Jean-Jacques and myself so frequently. I believe it is the second semester '25 and to the Summer '26 where we could and should be able to find a third party buying our stake or maybe actually a co-investor finding an entire buyer for the company, and then moving on. So it's really a question of having enough asset sales being conducted so that it gets advantageous to the company is digestible for a third comer -- for a newcomer.

And we'll now take our next question from Jamie Rollo of Morgan Stanley.

Also, 3 questions, please. So a pretty good net unit growth performance, 4.1%, as you say, helped by the Japanese portfolio. Your obviously guidance for the full year is a bit below that. You've had strong openings in Q2, but obviously those will stay for the rest of the year. So is that just a bit of conservatism? Or is there a bit of a slowdown in development or conversion activity? Secondly, it'd be great if you could please quantify the residential fees in Lifestyle. It looks like it's at least 2% to Group EBITDA and whether some of that will continue in the second half. And also, whether the drop in holding costs, which is also another 1% to Group EBITDA, whether there was any timing or phasing of costs. And then finally, just on the tax rate, the P&L tax rate looks very high. I think there's about a EUR 24 million internal reorganization charge there. Could you just talk about the underlying tax rates for the year, please?

You have the time to do all this. That represents 1% of total EBITDA, 2%. What time did you wake up this morning, Jamie? I'll...

Do you want me to take it?

You can take it, and then I'll jump in if I can.

So on the net unique growth, so what we're seeing is we're seeing, and that's where we're guided, we're going to have a bit of a higher churn in PME, as I mentioned, in the second half, which is churn that we expected. In terms of signings, we expect to have a very good year of signings. So it's more a question of when that Daiwa portfolio came in and the higher churn in the PME, the pipeline should be up on a full-year basis, as should be the opening. So really more of a phasing than anything. On the holding costs, that is purely a timing effect. Tax rate, we expect our tax rate on a full-year basis to be in the high 20s, which is up from where it was. And that's really related to, as I said, the extinguishing of some annuals and the fact that we have a higher tax base.

And the residential fees, please, in Q2?

On the residential fees, it was about EUR 15 million, exceptional. What I mean by exceptional, it's really a phasing, Jamie, because if you think about the residential fee on a full-year basis, we actually expect significant growth, but as I mentioned, it's more skewed towards the first half soon. It's not exceptional in the sense that, again, it's a large property that just happened to be in the first half, but it's not exceptional in the sense that we expect our level of residents or fees from branded residency to continue to increase year-over-year. So it's more of a phasing issue.

Yes, it's a major undertaking that we've done 5 years ago, deciding to have our own autonomous organization for branded resi. We probably have 22 brands today benefiting from different residences, which will get fees, including the Pullman, Rixos, SLS, Delano, and Sofitel, Fairmont, and many others. So it's one of those axes of priorities where we decided we need to go deeper, and we are today. Number 2 in terms of volume in the world behind Myriad when it comes to branded resi volume. So it's a major undertaking with great people actually headquartered in Dubai.

And we'll now take our next question from Muneeba Kayani of Bank of America.

First question, just going back to your first slide on demand, which look quite robust and is in contrast to what we heard from Ryanair earlier this week on weak consumer demand. So just wanted to hear from you, kind of, are you seeing any signs of weakness in your portfolio, especially in Europe? Secondly, I don't know, Martine, did you answer the question on Paris Olympics benefit, and are you still expecting that 0.5%, or did I miss that, if you could clarify? And then on share buybacks, so clearly very good performance since the CMD, and you did the one this year quite early. Should we be expecting anything this year, or do we need to wait for next year?

Muneeba, thanks a lot for connecting. On the Ryanair, again, I have many people in the room in front of me here, but we -- I looked at it, we looked at it, but I hope I'm not wrong when I'm telling you what I'm going to say to you, is the Ryanair second quarter stipulated that they had a drop in pricing 15%, but they had an increase in volume by 10%. So there is no slowdown in demand in Ryanair and there's no slowdown in demand in many of the airliners in the world and certainly not in India, in China, and many places where we need and Qatar was another -- we need those flights to be made available, so they have a price effect. They don't have a volume effect. So that's, again, that was my reading on the Ryanair transcript, so. And what's benefited us is, of course, volume. We need those people to get to towns. And I don't mind too much what they pay. And some, and many of you, and I think it was you, Jamie, put a very interesting note together by saying, I guess, well, if customers do end up paying less for the travel, they may pay more for the hotels and for the food and beverage and entertainment. So it may be actually going our way in terms of the next of spending for the same customer. So we're not worried on the pace of demand and the volume of demand across the globe, of course, is very not homogeneous depending on countries. When it comes to the Paris Olympic benefit, we did say 1 year ago or 9 months ago that, I guess, we were looking for very, very strong Summer Olympics in France and Europe. And we did say that, I guess, it could be a 2% increase the RevPAR in France, which then drives into a 0.5 a point for the Group of a lot, that's no longer the case. But being no longer the case, we still meet and exceed what we wanted to do for the year. It is certainly confirmed when it comes to the Olympic time, so the 2 weeks of the Olympics is doing exactly what we expected and probably better in terms of pricing and well above 80% occupancy across the AccorHotels. But we're just a little bit worried on the pre and the post-Olympics. That's about it. So it's going to be a wonderful Olympic season, but that half a point benefit for the group, it might come in September, October. I think it would be conservative when it comes to RevPAR in this region. But we don't talk about it because we don't see it as clearly as we could have projected 9 months ago. Despite and even though we say that to you, we got the fuel and the growth in other regions, which permits us to be where we are with each of you. So not disappointed, but certainly not as strong as we got expected for a couple months season. When it comes to the share buyback, we're still going to be on the share buyback. I can't tell you because I don't want to stipulate for the Board, because that's a Board decision, of course, with the recommendation of management. But I'll say it with my word, unlikely to happen for the rest of the year in 2024 certainly, will repeat itself in 2025. But we don't foresee doing another share buyback in the months of 2024.

And we'll now move on to our next question from Jaina Mistry of Jefferies.

And I was interested in your slide on the pick up in international traveler growth for next year. It seems like quite a substantial pick up. And I wondered what that meant in terms of how you're thinking about RevPAR at its early stages for 2025. And in particular, I wondered if you had an early read on pricing for next year. Is there anything to flag from your business rate renegotiation, what you're seeing from leisure, indeed what you're expecting in terms of international traveler growth? And then my second question is around the Habitas acquisition. I wondered what the strategic rationale for this was and whether it contributed to net unit growth in H1.

When it comes to -- and I'm like you, when I looked at that Oxford Economics survey on International Travel, it's super comforting on what we felt, and of course, it's on your projections, so it's factual for the years before, but I guess it's only telling us and give us a reading for the next year. But I'm like you, it's a 13% uplift on the base of 1.5 billion. It's a lot of new travelers, probably close to a couple 100 million, going in many directions, and I might have told you, but what's so extraordinary about that 1.5 billion base. Because we have data since 1991, so a long time ago. And it appears that, I guess, every year passing, half of those international customers do end up in Europe. So on a base of 1.5 billion, 750 million end up being customers of European countries. And that's still the case and will be the case, so which means you're probably going to have another 100 million, 80 million customers going to Europe in the year of 2025. That is huge in terms of RevPAR impact. And a lot of customers will end up in Middle East. Why? And I talked about it and I don't want to dwell too much on it because it's one of my favorite subject when it comes to the outbound of India, you have 40 million Indian people traveling abroad and 80% of them go Southeast Asia or they go to the Middle East. That 40 million could end up being 80 million in 1 year or 2 years from today. That's a huge pick up and that has a huge effect on the Middle East hotels of Accor and something when it comes to Laos, Vietnam, Cambodia, Malaysia, Jakarta. And you can release this long. So it's -- where you're right is when we gave you a 3% to 4% CAGR for RevPAR, we intend to do better, which is why we are positive on the outlook of our own industry. The pace of demand is being confirmed every day passing, again, from different origins, but it is there globally, so which is why we feel strong on meeting objectives for between now and 2027. When it comes to the other thing I can tell you on pricing, which is interesting, is that you know that, I guess, every year or every other year, we renegotiate corporate pricing with our large customer base across the globe. What I can tell you is for the last 12 months, every renegotiation that's been happening with existing customers has been going upward to an extent of 4% to 6%, depending on who is the -- and the size of the customers. So it's just an indication that we still have pricing ability with 20 years customers for the next 12 to 18 months across from us. So that's also another comfort level. Habitas, it's -- we did not look to find a partnership with that organization. They look to us. We got a phone call from the shareholdings and the management team of Habitas looking forward to find the right partner to help them scale, to help them probably reduce corporate costs because they don't have the benefit of the scale for the distribution angle and many other things. And they called Ennismore. And they called Ennismore because they felt, and they're right, that there's a lot of values in common. Habitas -- I mean Ennismore is a pure consolidation of founders-led brands. Each of the brand of Ennismore have been founded by individuals with a different culture, with a different autonomy, with a different mindset, with a different design. Habitas is a perfectly similar pattern of what Hoxton went through, Mama Shelter went through, Rixos went through, 25hours. So it's a perfect fit. It's very natural. It's probably fairly easy to execute. I say that because it's not me. It's done by Gaurav Bhushan and Sharan Pasricha. And so it's a very natural alliance for the exact same reason where other founders have knocked on the doors of Accor over the last 8 or 9 years, so. And I'm convinced that they will benefit from the same success that we had on 25hours and many others. And it has the -- it is in a segment which is extremely interesting in terms of where the luxury leisure tourism resort, any small ones, are not present. So that's how it happened.

Can I just clarify 2 things? You said that you intend to be better on the 3% to 4%. Is that on a medium-term basis, or is that for 2025? And then, same question for pricing. You mentioned 4% to 6%. Is that backwards looking, or is that for 2025?