Specialist
Former C-level executive at AccordHotels France
Agenda
- Outlook for rental income in remainder of 2020 and 2021
- Dynamics and prevailing economics across AccorInvest's owned and managed portfolio
- Recovery outlook across regions and segments – economy, midscale and upscale
- Relationship between Accor (PAR: AC) and AccorInvest and implications for management fees
- Potential portfolio divestment and valuation trends
Questions
1.
What primary trends and developments do you expect in the hotel market in 2021? What is your outlook for occupancy and RevPAR [revenue per available room]?
2.
How much lower would you say occupancy and RevPAR are in economy, midscale and luxury vs 2019?
3.
How would you break down AccorInvest’s portfolio of hotels across economy, midscale and luxury?
4.
Could you pinpoint where AccorInvest’s hotels are located? I understand the majority are in Europe.
5.
Does AccorInvest own most of its assets vs the assets it leases?
6.
Do you think that split of around 60% owned vs 40% leased will have changed in recent years, or will change substantially due to coronavirus?
7.
Do you think AccorInvest might struggle to make rental payments to the owners of its leased assets, even though they’re variable rents? Will they largely be deferred and would that be characteristic of how the broader industry has been impacted by coronavirus?
8.
How do you think AccorInvest manages its owned portfolio? Presumably, there will be interest payments on mortgages and financing.
9.
How flexible do you think landlords will be on restructuring rental agreements? You mentioned they’re already 15-20% of revenue. Do you think there’s a possibility that AccorInvest can negotiate a smaller percentage?
10.
How long is the lease for one of AccorInvest’s hotels, typically?
11.
Were leases transferred to AccorInvest from Accor when the unit was created, or were new leases written up because the structure and the underlying lessee may have changed?
12.
AccorInvest’s portfolio skews towards economy and midscale. How exposed would you expect its portfolio to be to business travellers in a normal environment, given its regional and category mixes?
13.
How do you think hotel owners and brands are repositioning themselves, given business traveller volumes could be significantly or even permanently impaired vs 2019? How do you expect hotels to attract more leisure tourism and stays during the week?
14.
How should we consider the relationship between AccorHotels and AccorInvest?
15.
AccorInvest published around EUR 4bn revenue on its website for 2019. What percentage of revenue would a hotel typically allocate to staffing costs and other costs associated with running and managing a hotel in normal circumstances?
16.
Do you expect changes to leverage in discussions around management fees between Accor and AccorInvest or hotel owners broadly? Are hotel brands such as Accor in a position to command a higher percentage of fees for management services, or do you anticipate it moving in favour of the hotel owners?
17.
What impact do you think the current environment will have on AccorInvest’s gross asset value?
18.
How do you think current levels of occupancy and RevPAR will impact valuations? Do you expect significant discounts to hotel assets?
19.
How would you value the hotel assets portfolio in the current environment, appreciating we’re making a lot of assumptions?
20.
How should we anticipate ongoing CAPEX requirements for a portfolio such as AccorInvest’s, given its size and various lease types?
21.
Are there any other non-core portfolios that you think AccorInvest could divest? We touched on Australia when we spoke before the Interview. Could you highlight any others?
