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Accor's first-quarter 2020 revenue per available room fell
25.4 per cent year over year on a like-for-like basis, according to the
company, which credited the sharp deterioration in the industry due to the
global coronavirus outbreak. For the month of March, the decline was 62.6 per cent.
On a regional basis, quarterly RevPAR was down 33.7 per cent
year over year in Asia Pacific, down 23.2 per cent in Europe and down 22.2 per cent
in North America. In China, where the virus was first reported, first-quarter RevPAR
fell 67.7 per cent year over year, however the company sees signs of an
improvement with a pickup of occupancy rates and restaurant business.
Consolidated first-quarter revenue totalled €768 million, a
15.8 per cent decline on a year-over-year, like-for-like basis.
"The world is facing an unprecedented health crisis
that is having massive and unique impacts on the tourism industry," said
Accor chairman and CEO Sébastien Bazin. "Nearly two-thirds of our hotels
are currently closed, and most of the others are being used to support
healthcare workers and all those on the front lines of the fight against
Covid-19. Today, our challenge is twofold: manage the emergency and prepare for
Still, Accor opened 58 hotels with nearly 8,000 rooms during
the quarter, and now has a portfolio of 746,903 rooms. As of 31 March, its
pipeline comprised 1,202 hotels with 208,000 rooms, of which 76 per cent are in
emerging markets. As of 22 April, 62 per cent of the company's hotels are
temporarily closed, representing more than 3,100 hotels.
Accor also reported on the measures it is taking to mitigate
the negative business effects of Covid-19. It has instituted a travel ban and
hiring freeze and reduced schedules or furloughed 75 per cent of global head
office teams for the second quarter, resulting in a minimum €60 million
reduction in general and administrative expenses for 2020. A review of the
recurring investment plan for 2020 resulted in a €60 million reduction in
capital expenditures for the year. It also significantly reduced costs in
departments including sales, marketing and IT to offset drastic fee decreases.
In addition, Bazin will forego 25 per cent of his compensation during the
The company’s board also made the decision to withdraw
dividend payments of €280 million for 2019 and will instead invest 25 per cent
of that money to the launch of the ALL Heartist Fund, which has been set up to
assist employees financially impacted by the coronavirus outbreak.
The company would not release any guidance for the year as
the outbreak continues to affect the industry. It did, however, note that April
and May are expected to be the most difficult months of the year, "with
very low occupancy rates and strong uncertainty about timing and lockdown
relaxation as well as the pace for border reopenings".
Accor has partnered with Bureau Veritas in Europe to develop a certification label that hotels and restaurants will be able to use to show they meet new safety and cleaning standards when they are able to reopen to the public to reassure guests once the pandemic is over.