Accor, the Paris-based hotel operator, reported solid first-quarter performance despite broader economic concerns related to recent U.S. trade policies.

"We're not seeing cracks in demand," said Martine Gerow, chief financial officer, on an earnings call Thursday. "We feel good about how April and May are trending."

While March performance softened compared to January and February, Gerow attributed this primarily to calendar shifts, notably Easter moving to April this year, which created a temporary headwind.

April bookings had rebounded and "are back to positive territory," particularly in popular French spots like Paris and Provence, the CFO said.

Accor's "visibility is limited beyond May," Gerow said, because most of its hotel reservations are non-refundable. Hotels are also often booked more last-minute than flights and trains are.

U.S. Tourism Outlook

Accor Group CEO Sébastien Bazin said on April 1 that the company had seen a 25% drop in European bookings to the U.S. this summer.

When an analyst asked Gerow about this, she said things didn't ultimately turn out as dire as that overall. Accor "saw softness in March, with overall European bookings to the U.S. down about 10%."

However, demand from some European countries, such as Germany, Denmark, the U.K., and France had higher double-digit percentage declines, particularly among individual business travelers.

So far, the company hasn't seen much change in U.S. hotel bookings in April and May versus last year.

Yet Gerow emphasized that the impact had been minimal on Accor. Americans traveling outside the U.S. represent less than 3% of Accor's room revenue, with the entire U.S. market (including international travelers to the U.S.) accounting for only about 5%.

Canada Shift

"The only market where we've seen an inflection, and it's actually benefiting us, is Canada," Gerow said.

"We see Canadians who had been planning to travel in the U.S. actually staying in Canada," she said. "Some events which were planned in the U.S. are now being repositioned in Canada."

That trend is somewhat positive for Accor because it has more properties in Canada than in the U.S.

Tariffs Impact?

Some analysts have worried that rising interest rates because of bond market turmoil in reaction to tariffs would impact access to capital and financing for hotel developers, while others have been eying potential inflation from tariffs in the inputs to build and run hotels.

"As a service business, the direct impact of tariffs on Accor is clearly minimal," Gerow said. "Nevertheless, we are closely monitoring the situation, and we have tightened our cost control measures in this respect."

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All the talk of economic uncertainty had not led to any impact on new construction or any withdrawal of hotel development plans, she said.

"What we do see is a bit more time, a bit of a longer process in terms of renovation, but it's more anecdotal," she said. "It's not a trend at this point."

When asked about potential impacts from economic uncertainty on the company's margins, Gerow noted that Accor's cost structure is "more flexible today and more variable today than it was pre-Covid."

The company has implemented cost control measures to help weather any potential change in demand, with Gerow stating that "a couple of points of RevPAR is certainly something that we can manage."

Luxury Boom

In the first quarter, Accor saw its worldwide revenue per available room (RevPAR) rise 5% year-over-year for properties open for the past year, "driven by strong performance in the Middle East and Southeast Asia and the Americas."

The hospitality group grew its revenue by 9.2% in the quarter, driven by a combination of pricing power and growth in the size of its hotel network.

Some countries in Europe had relative weakness. Europe had overall RevPAR up just 0.6% year-over-year. France reported flattish to slightly negative growth in the first quarter. The United Kingdom saw low single-digit negative RevPAR growth, reflecting lower consumer confidence as customers prioritize savings over spending, Gerow said.

The luxury and lifestyle segment emerged as a particular bright spot with 8.3% RevPAR growth year-over-year worldwide. Luxury brands specifically posted 9% growth, with rate increases driving most gains, fueled by sustained elevated levels of cross-border travel.

The hotel group reached a milestone of 100 million loyalty program members last month. On the development front, net unit growth reached 2.7% on a last-twelve-month basis.

Yet the only question analysts asked Gerow on the earnings call was about demand. She said: "Thus far, we are not seeing significant changes in demand trends in our key markets."

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