Accor addresses Middle East disruption in Q1 earnings
Accor addresses Middle East disruption in Q1 earnings
The company said business in the first two months was “remarkably solid” but that the war in Iran has created severe disruptions.
https://www.hotelinvestmenttoday.com/Development/Owners/Accor-addresses-Middle-East-disruption-in-Q1-earnings?
PARIS — Despite disruptions from the continuing effects of the war in Iran, Accor reported RevPAR and net unit growth gains as part of its first-quarter earnings.
Accor said its hotel business during the first two months of 2026 was remarkably solid, consistent with similar momentum observed in Q4 of 2025, but said the conflict in the Middle East has since severely disrupted the macroeconomic and geopolitical context. Activity in the Middle East, primarily in the United Arab Emirates, has been strongly impacted, while demand in other Accor geographies is holding up.
In the first quarter, Accor opened 48 hotels and more than 6,700 rooms, representing a net unit growth of 3.8% over the last 12 months. Through Q1, Accor had a hotel network of 879,676 rooms (5,815 hotels) and a pipeline of 260,000 rooms (1,545 hotels).
“In the first quarter of 2026, the group once again posted steady growth, as the strong momentum from the start of the year more than offset the effects of the conflict in the Middle East,” said Sébastien Bazin, chairman and CEO of Accor. “On the ground, our teams are fully committed to adapting our operations to the needs of our property owners and customers. The group has also implemented measures to protect results, enabling us to minimize the impact of the situation on our performance, prepare for the rebound, and capture growth in regions temporarily benefiting from increased demand, such as Europe and Southeast Asia. Our diversified geographic footprint, the quality of our brand portfolio, and our ability to adapt thus allow us to be confident in our ability to once again deliver improved performance in 2026.”
Accor posted RevPAR gains in Q1 across a number of regions and chain scales, including:
- The company’s Premium, Midscale, and Economy (PM&E) division posted a 4.5% increase in RevPAR YOY, primarily driven by ADR.
- The Europe North Africa (ENA) region posted a 2.7% YOY increase in RevPAR, driven almost solely by the occupancy rate.
- The Middle East, Africa, and Asia-Pacific region posted a 5.5% YOY increase in RevPAR, driven by ADR.
- The Americas region, which mainly reflects the performance of Brazil (59% of the region's room revenue), posted a 9.1% YOY increase in RevPAR.
- The Luxury & Lifestyle (L&L) division posted a 6% YOY increase in RevPAR, driven mostly by ADR.
Revenue was up in Q1 to €1.313 billion, up 2.3% YOY at constant currency. This increase breaks down into a 4.6% rise at constant currency for the PM&E division and a 0.7% decrease at constant currency for the L&L, which was negatively impacted by disposals accounting for 6.2%.
As Iran war disrupts Middle East travel, Dubai hotels take opportunity to close and renovate
Demand dip provides reprieve to reinvent older luxury hotels
Despite a number of hotels closing in Dubai, United Arab Emirates, hoteliers and industry experts are confident the city will recover once the Iran war is over. (Terence Baker)
https://www.costar.com/article/252323992/as-iran-war-disrupts-middle-east-travel-dubai-hotels-take-opportunity-to-close-and-renovate
For years, Dubai has been the United Arab Emirates' premier tourism and business hub, a Las Vegas of the Middle East.
Then, Dubai's status as a must-visit destination took a hit nearly two months ago as the U.S. and Israel launched airstrikes on Iran on Feb. 28. Since then, the war has caused oil prices to skyrocket, raising the cost of jet fuel and causing some airlines to cancel flights. And now, several of Dubai's iconic hotels are closing their doors either temporarily or for an extended period as tourists travel elsewhere.
According to CoStar, Dubai hotels reported 84.7% occupancy in February, which was down 5.9% year over year. Across the entire UAE, hotel occupancy in February was 84.7%, down 4.6% year over year. In March, however, Dubai's occupancy nosedived 54.4% year over year to 33.1%, while countrywide hotel occupancy sunk 49.3% to 36.2%.
Hoteliers and analysts based in the UAE say life has returned almost to normal in Dubai and the rest of the country since the start of the conflict, with flights returning to being full, notably for spring break vacations. They are also optimistic that Dubai is a very resilient hotel market that will eventually recover from the current disruption.
Hoteliers in Dubai also view this lull in tourism as the perfect time to deploy capital expenditures on major renovations. But a number of hotels in the city contacted for this article declined to speak on the record. Among numerous public statements and social media posts, no hotel has alluded to the Iran crisis and any resultant dip in occupancy as a reason for temporarily shutting their doors.
The list of Dubai hotels that have recently decided to close for major renovations includes:
- Anantara World Islands Dubai Resort — closed on April 10 with no reopening date announced.
- 197-room Jumeirah Burj al Arab — closed with an estimated length of CapEx work of 18 months.
- 246-room Radisson Blu Hotel Dubai Media City — closing April 30 with plans to reopen in 2027 with a hinted brand transition.
- 290-room The St Regis Dubai, The Palm — rooms offline until Aug. 31.
- 160-room Armani Hotel Dubai — closed on April 1; expected to reopen in the fourth quarter of 2026.
- 1,608-room JW Marriott Marquis Hotel Dubai — began taking rooms offline starting April 10, a rolling closure of some parts of this huge hotel. No date of full completion announced.
- Park Hyatt Dubai — closing May 1 with plans to reopen in the fourth quarter of 2026.
Philip Wooller, area director for the Middle East and Africa at STR, CoStar’s hotel analytics division, said now is the perfect opportunity for these major Dubai hotels to execute refurbishment plans because there is no displacement of revenue.
“There is no international tourism to speak of, [but] last weekend [April 18-19] saw a pickup,” he said.
He added that Dubai's hotel market is very flexible.
“Dubai was the quickest market to react and open to business during COVID-19,” he said.
However, there's unlikely to be any correlation between lost hotel business in Dubai during the pandemic and amid the current Iran war, Wooller said.
“During COVID-19, there was not an opportunity for renovations. There was no labor,” he said.
Alex Sogno, founder, CEO and senior hotel asset manager for Global Asset Solutions, agreed that the pandemic disruption was quite different from the current one.
“When comparing the shutdown to COVID-19, while there was a similar lack of long- or even medium-term view, the similarities end there. The pandemic shutdowns were total, creating issues around the supply chains needed to undertake renovations, whereas currently the supply chains now are, while not perfect, functional,” he said.
Piers Schmidt, CEO of Luxury Branding, said as the current crisis leads to less hotel demand in Dubai, it's an opportunity to get some major projects done and out of the way.
The pandemic “was a synchronized global pause with genuine supply-chain and labor constraints, whereas today’s disruption in arrivals is psychological rather than structural. You can build, you can source, you can move. The constraint is confidence, not capability,” he said. “However, for those with the balance sheet and the conviction, a soft market is precisely when you want the cranes on site.”
Such significant hotel renovations are coming at the right time, said Alejandra Resa Abad, a Dubai-based regional director for the Middle East and Africa of business consultancy RLA Global. Many of Dubai's hotels that have decided to temporarily close were constructed and opened in an era when the technological landscape and requirements from international brands were very different.
“Hotel owners today are looking at renovations from a more sustained and holistic perspective. … Hotels now need to align with energy-efficiency plans, ESG commitments, smart building technologies, water recycling programs and much more,” she said.
What's more, Middle East hotel owners are investing in mechanical, electrical and plumbing upgrades for a competitive advantage, Abad said. Meanwhile, in Europe, the majority of luxury hotels were built before 2000 and MEP investment is being driven primarily by necessity and regulatory compliance.
“Renovations today are, therefore, no longer just about image or room refurbishment. They are a whole-asset transformation,” Abad said.
While now might seem an excellent time for hotels to shut down, not every hotelier in the United Arab Emirates is on board, said Piers Schmidt, CEO of Luxury Branding.
“When occupancy softens, the rational response is to take rooms out of inventory and invest in the asset,” he said. “But I wouldn’t over-romanticize it as a universal strategy. One ‘ultra-luxury’ project we were advising on immediately before the Iran war decided to delay its planned major renovation, and I’d be surprised if they’re alone in that. When the outlook darkens, not everyone runs toward the CapEx committee.”
Dubai has inherent advantages when considering hotel CapEx allocation and reopening timelines, said Miret Padovani, founder and principal consultant at hospitality and real estate advisory By Miret Padovani.
“Few other places in the world are known to bounce back so quickly after a challenge as Dubai does, and it happens every single time,” Padovani said. “Everyone in the industry is certain the rebound will be very strong, and it will probably happen even earlier than we’re expecting. I chat with hospitality investors, developers and operators daily, and no one has changed their positive outlook on Dubai.”
The full recovery of Dubai's hotels to prior occupancy levels will likely be slow, Sogno said, but focusing on renovations now will pay off when that hotel demand returns.
“What better attraction than a newly renovated hotel, setting you apart from your competitor set?” he said.
Dubai's hotel market will likely see a gradual recovery rather than a sharp rebound, which extends the renovation window, Abad said.
“When occupancy is running at 50%, and in reality from what we are hearing on the ground, considerably lower, the opportunity cost of closing is reduced significantly. Owners need to address the cost of lost revenue during a closure versus the cost of delaying the renovation of a hotel that was built 15 to 20 years ago,” Abad said.
Rising costs
CapEx committees will be very aware of rising costs even if Dubai hotel owners have deep pockets. RLA Global’s Abad said construction prices have risen, linked to geopolitical tensions in the Middle East, but it's easier to set project timelines than during the pandemic years.
“Contractor movement restrictions, material shortages and supply-chain disruptions created profound uncertainty, increasing costs and delays. Today, by contrast, lead times are more predictable and easier to budget,” she said.
Luxury Branding’s Schmidt said hotel CapEx projects have requirements that are becoming more strategic and detail-oriented.
“There’s a trap here, and I see it repeatedly. I call it the ‘hardware trap.’ It describes the quiet assumption that if you refresh the plant and repaint the lobby, you’ve done the work. You haven’t,” he said. “A renovation without a repositioning is just expensive redecoration. You can upgrade every system in the building and still not meaningfully shift perception.
“Most of the hotels [that have closed temporarily in Dubai] opened into a version of Dubai that doesn’t quite exist anymore, for a version of the luxury guest who has moved on. The question isn’t whether the MEP is contemporary. It’s whether the proposition is.”
Such major renovations will likely affect all parts of the hotel, not just the guest-facing areas, Sogno said.
“Front of house, we have seen a rapid evolution in operations in recent years, particularly in terms of technology, much of it driven by guest demand as we try to keep pace with, and exceed, guests’ experiences at home and in other sectors,” he said. “This has spread to back of house, where the improved technology and energy efficiency are demanded by guests, but are also connected to greater efficiency and compliance with ESG requirements. The current closures allow hoteliers to undertake disruptive improvements to MEP systems, completely overhauling performance and creating more profitable, resilient properties.”
Dubai's hotel market will likely see a gradual recovery rather than a sharp rebound, which extends the renovation window, Abad said.
“When occupancy is running at 50%, and in reality from what we are hearing on the ground, considerably lower, the opportunity cost of closing is reduced significantly. Owners need to address the cost of lost revenue during a closure versus the cost of delaying the renovation of a hotel that was built 15 to 20 years ago,” Abad said.
The impact of luxury travelers
Will luxury guests stay loyal to Dubai? Historically, luxury hotel guests love staying in the City of Gold and “are getting ever more sophisticated and demanding. It’s important for hotels to meet their growing expectations,” Padovani said.
Schmidt said Dubai’s landmark hotels were conceived in a different technological era, for a guest whose expectations around wellness, longevity, sustainability and seamless digital experience now demand a fundamentally different operating backbone.
“The next generation of luxury will be defined less by what you see and more by what quietly works in the background,” he added.
Dubai’s connectivity is unmatched, the infrastructure extraordinary and the supply world-class, Schmidt said.
“The more interesting question isn’t whether [luxury hotel guests] come back, but why they come back. Dubai has spent two decades perfecting the art of the individual asset — iconic hotels, impeccable service, constant reinvention,” he said. “The next chapter is less about standalone brilliance and more about collective meaning. What we sometimes call the discernment curve describes a migration in luxury spending from ‘having’ to ‘becoming,’ and the destinations that prosper are the ones that offer a coherent answer to the question, ‘Who will I be when I've been here?’”
This is the real work that Dubai has to do as a destination, and that's not something that can be done by individual hotels, Schmidt said.
“What does Dubai stand for? What is the macro proposition, and how does it cascade into a segmented but coherent range of experiences that add up to more than the sum of their parts?” he said. “At the moment, you have an extraordinary collection of hotels in search of a unifying story. The risk isn’t that Dubai stands still; it’s that it keeps moving without saying anything new.”
CapEx is the easier conversation for hotels to have, he added.
“The harder one, and the more interesting, is what you reopen as. Until that is addressed, renovation will improve performance, but it won’t necessarily elevate perception,” Schmidt said.
Padovani said destinations outside of the UAE and Middle East will benefit temporarily as travelers book trips elsewhere.
“The luxury traveler is not abandoning Dubai. … [Its] connectivity, its luxury retail, its year-round events calendar are compelling and difficult to replicate. The vision and mission behind the destination are unique,” she said.
Dubai is targeting 22 million visitors in 2026 and 25 million by 2030, with 50,000 new hotel keys planned and major new attractions in the pipeline, Padovani said. She added visitor numbers grew 5% in 2025 and continued growing at 3% in January. Few destinations have a government supporting this growth.
“They will return to a product that is meaningfully better than the one they left,” she added.
Sogno agreed that any redistribution of hotel demand away from Dubai will be temporary.
“In the short term, we are seeing guests visiting regions that are more accessible and perceived as safer, such as Italy, Spain, and Croatia, giving those markets a chance to highlight their own unique offerings, [but] more broadly, what this moment highlights is the increasing importance of active asset management,” he said. “Navigating disruption today is less about reacting to a single event and more about continuously recalibrating strategy across operations, capital planning, and commercial positioning.”
“In terms of leisure travel, May to October is anyway a low season for Dubai, so nothing new there,” Padovani added.
Hotel companies expected to report 'guarded optimism' during first-quarter earnings calls
Analysts look for signs that March's momentum will continue
While hotel industry performance gained momentum during the first quarter, disruptions like February's cartel violence in Mexico is expected to show up for companies like Hyatt Hotels Corp., which has more hotels in Mexico. Pictured is the Secrets Akumal Riviera Maya in Mexico. (Hyatt Hotels)
https://www.costar.com/article/1692442612/hotel-companies-expected-to-report-guarded-optimism-during-first-quarter-earnings-calls
Public hotel companies are looking at a very different first-quarter earnings season compared to a year ago.
While the beginning of 2025 saw some shocks to domestic activity, like the announcement of U.S. tariffs and federal government cuts from the Department of Government Efficiency, the first quarter of 2026 performed according to expectations, if not better, without any major domestic impacts.
"I don't see it as any real acceleration of demand, so to speak, in the quarter, because what was on the books for the companies was always very good," said C. Patrick Scholes, managing director of lodging and leisure equity research at Truist Securities. "It was more of the opposite of what happened a year ago, where, at least domestically, there were no negative surprises that led to cancellations or deceleration in demand."
Scholes added that while the war in Iran has been a shock to the market as a whole, the effects on travel and hotels — such as the rising gas prices — haven't been too significant yet.
But there are early rumblings of the negative effects. France-based Accor reported last week in its earnings call with analysts that revenue per available room fell 9% in the United Arab Emirates in the first quarter. The UAE makes up 27% of Accor's hotel room count in its Middle East and Africa region.
Still, Michael Bellisario, senior research analyst at Baird, said he expects this round of earnings to be positive overall. This is especially true after how U.S. hotels performed in March, which he described as "off-the-charts good," pointing to favorable calendar shifts, domestic re-bookings from travelers avoiding Mexico's unrest and other factors.
"The trend is your friend," Bellisario said. "Things are better. A lot of things added up in the wrong direction last year, and a lot of things have added up in the right direction this year so far. And I think that the focus will be on how much more optimistic and bullish are the management teams."
What happened in Mexico in February, including a raid by the Mexican Army Special Forces to target drug cartel violence, will disproportionately affect Hyatt Hotels Corp., so that's one call Scholes and Bellisario agreed will be one to listen to.
Hyatt has 10% exposure to Mexico while the other brands have around 3%, Scholes said.
Additionally, the Hyatt resorts that closed in Jamaica in 2025 after Hurricane Melissa have not yet reopened, and that will affect the company's full-year guidance, Bellisario added.
From a market perspective, Boston and New York City are outperforming, as is San Francisco, thanks to hosting this year's Super Bowl. Meanwhile, Washington, D.C., is struggling but should come back with America 250 programming. Hawaii has been affected by recent storms and flooding.
In general, earnings calls from the public hotel companies will reflect increased guidance pretty much across the board, but Scholes added that he doesn't expect outlook increases to be much — if any — more than the improvement on first-quarter results.
Hotel executives are "very pleased about what has happened, but [will have] guarded optimism about the rest of the year," Scholes said.
Run rate is something Bellisario said he hopes to hear about, because whether the U.S. hotel industry can maintain its momentum will be the biggest factor to the rest of the year's expectations.
"I don't think there will be too many pressure points, other than trying to dissect how sustainable the recent strength has been," he said. "How long does it continue? And sort of, what is the true adjusted [rate] for calendar shifts and certain other items? What is the true underlying growth rate for the industry right now?"
Low fuel supplies threaten the right of the annual European vacation
Some state six weeks’ fuel left; others state situation overblown
Terence Baker (CoStar)
https://www.costar.com/article/459150240/low-fuel-supplies-threaten-the-right-of-the-annual-european-vacation?
The European hotel industry faces a potential problem in how its guests are going to — if they can at all — arrive at their hotels this summer.
TUI, the huge vacation-package company, has warned its guests that the Middle East crisis, if it continues, could severely affect fuel supplies, and if there is not enough fuel, then there will not be airlines on which guests can board.
Airline Ryanair is adding to the noise, stating, as others have, that there might be only six weeks of airline fuel remaining in the continent.
One stark comment was that if the U.S.-Iran conflict ends before April does, then May and June flights will not be affected.
The end of April is in three days.
Added to that are new border-entry procedures, which either are a remnant of Brexit or a result of Europe-wide fear of immigration.
Some might state it is due to the requirement for enhanced security, but that is always the excuse.
Patriotism is the last refuge of the scoundrel, as the saying goes.
The pinch on fuel, though, if that is to be acute, will have more of an effect on Europe than it would on, say, North America.
Europe imports most of its airline fuel.
Airlines cannot increase air fares for tickets already purchased, but they can cancel the whole flight.
It will become a monetary exercise at the end of the day, and cancellations cost airlines money, of course.
Consumer advocate magazine Which? believes the situation is a little overblown, that is, panic is being created unnecessarily.
In an April 22 article, Which? said “airlines are choosing to cancel some flights to protect profits, not because they have run out of fuel.”
That might be soothing in the large picture, but if you happen to have booked a flight that is cancelled deemed too expensive, then potentially your holiday is ruined.
It added it did not think flights would be affected too much this summer, but the caveat emptor here is that this is the case “unless the situation significantly worsens,” which given the caliber of politician we currently have is not exactly a glowing testament.
Firms with more exposure will worry more.
TUI has huge exposure as its planes often funnel its guests to its hotels.
Belfast Live quoted TUI as saying, “We think there is a reasonable risk, some low level, maybe 10% to 25% of our supplies might be at risk through May and June, so like everyone else in this industry, we hope the war ends sooner rather than later.”
Vacation islands might be at more risk.
There is no other way of getting to them other than by plane, if you wish to get there relatively speedily.
The European Union is getting stuck into the problem.
Also on April 22, it released a plan — rather sillily named ‘AccelerateEU’ — in which it listed four bullet points of action:
- The establishment of an EU Fuel Observatory, mapping the supply and available stocks in the EU of jet fuel.
- Immediate coordination with member states, fuel suppliers, airlines and airports of alternative sources of jet fuel supply and proposals to optimize jet fuel supply distribution across member states to ensure availability across all regions and airports.
- Clarification of existing flexibilities under EU legislation as regards anti‑tankering and the use of other imported fuels to address the consequences of potential jet fuel shortages.
- Assessment of the need to review EU rules on strategic stocks to include specific jet fuel requirements.
The United Kingdom, dare I remind you, is now no longer in the EU.
And what is anti-tankering?
I needed to look it up.
"Anti-tankering is any model that prevents airplanes from carrying excess, heavy fuel from cheaper, non-EU locations to avoid paying for expensive sustainable aviation fuel in Europe, thereby lowering emissions.”
Let’s hope this is all a flash in the plan, certainly the bit where bombs are being dropped, so that we can get on holiday and check in to one of your hotels.
The annual, or bi-annual, vacation is such a must-have nowadays; it will not take long if the escalation continues to see a summer of slump and sourness in business and in guests.
The opinions expressed in this column do not necessarily reflect the opinions of CoStar News or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to contact an editor with any questions or concerns.
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