Accor says Middle East conflict hit Q2 room revenue, Dubai returns to growth

By Alexander Gudbrandsen and Ronan Corcoran

July 30 (Reuters) - French hotel group Accor said on Thursday conflict in the Middle East weighed on second-quarter room revenue by hurting demand in the United Arab Emirates, although business elsewhere remained resilient and Dubai returned to growth in July.

Revenue per available room (RevPAR), a key industry metric, fell 0.2% year-on-year in the second quarter. Excluding the Middle East, RevPAR rose 4.6%, the company said.

The Middle East accounted for about 8% of Accor's room portfolio at the end of 2025. Chief Financial Officer Martine Gerow told Reuters occupancy rates in the UAE improved significantly during the quarter, with Dubai returning to year-on-year growth in July, although some hotels in the country remain closed.

Despite the regional disruption, first-half recurring EBITDA rose 6.5% at constant currency to 563 million euros ($645.48 million), supported by cost controls and growth in Accor's hotel network.

Accor said it expects full-year recurring EBITDA of 1.26 billion euros to 1.285 billion euros.

Operating profit fell to 294 million euros in the first half from 399 million euros a year earlier, while net profit dropped to 127 million euros from 258 million euros.

Earnings were weighed down by charges totalling 113 million euros, including a 44 million euro impairment related to Accor's stake in Essendi.

Gerow said exceptionally hot weather across Europe had boosted demand in some cities as travellers sought air-conditioned accommodation.

Separately, Accor said it was seeing productivity gains from artificial-intelligence tools used in areas such as order-taking and call handling.

Chief Executive Sebastien Bazin told analysts AI could help reduce hotel owners' costs by 15% to 30% over the next 12 to 18 months.

($1 = 0.8722 euros)

(Reporting by Ronan Corcoran and Alexander Klyve Gudbrandsen in Gdansk, editing by Milla Nissi-Prussak and Matt Scuffham)