Accor's Diverse Global Portfolio Performing Well Under an Uncertain Economic Outlook

While inflation and reduced consumer sentiment present potential near-term demand headwinds, we expect Accor to expand its share in the hotel industry over the next decade as a result of its solid loyalty membership of more than 100 million and increasing exposure to the luxury and lifestyle segments, supporting its intangible brand asset advantage, the primary source of its narrow moat. Accor's growing room share is being driven by an increased presence in higher-end luxury and lifestyle rooms, which were 15% of its total in 2024, up from 13% in 2021. We estimate Accor's luxury and lifestyle 2025-34 room portfolio growth to average 5%-6% annually, reaching 20% of total units during that time. This higher luxury presence diversifies Accor from its core economy/midscale exposure, which more directly competes against Airbnb and other alternative accommodations. Overall, we see Accor's total units increasing about 3% on average over the next 10 years, well above the roughly 1% long-term industry rate in its core Europe and North African region (42% of total rooms in 2024).