Travel & leisure (AO) | Hotels Q1 debrief: Resilient RevPAR, but Middle East volatility

Research evidence excerpt

Travel & leisure (AO) | Hotels Q1 debrief: Resilient RevPAR, but Middle East volatility

Travel & leisure

The main negative shock in Q1 was the Middle East conflict, which became visible from mid-March and affected both GCC/UAE

hotel demand and international travel corridors. Accor (8% of rooms in the ME) said the conflict affected business from mid-

March in some GCC countries, but the group's March RevPAR remained positive at +1.6%. The direct impact was mostly in the

UAE, which represents 3% of Accor’s network, while Saudi Arabia and Egypt held up. IHG’s Middle East (5% of rooms) RevPAR

moved from +9% in January/February to -26% in March, leaving Q1 Middle East RevPAR down 2%, with April worsening toward

-50%. Marriott’s Middle East (3% of rooms) RevPAR declined by more than 30% in March. Expedia noted that the Middle East

represented less than 2% of total bookings, but cancellations rose across Europe and Asia before stabilising in early April, with

bookings reaccelerating through the month.

No broad-based demand deterioration

Hotel operators came out of Q1 with a broadly constructive Q2/FY26 message. Q2 is expected to be the messier quarter, mainly

because of Middle East disruption, but management teams generally framed this as a localised shock rather than a demand

rollover. Accor did not issue formal FY26 guidance at Q1, but said it was comfortable with consensus RevPAR and EBITDA (i.e.

flattish RevPAR in Q2), expected H1 EBITDA to be up, saw no demand cracks outside the Middle East, and had already activated a

profit-protection plan while redirecting investment toward stronger markets. The UAE remains the main pressure point, while

Europe, Asia and the Americas were described as healthy. IHG was more explicitly confident, saying Q2 global on-the-books