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Group looks to save money on staff
Accor reported a revenue decline of 9.2% in the premium hotel market for the first quarter of 2009.
The French hotel group, whose brands include Mercure, Novotel and Sofitel, said revenue in the up- and mid-market sector fell to €687m from €756m for the same three months in 2008.
Overall, the company's Q1 revenue, including prepaid services and other business areas, dropped 5.8% like-for-like to €1,616m from €1,787m in the same period of last year.
A spokesperson for Accor said it had initiated a hiring freeze to help reduce staff costs by €75m in 2009 and an additional €25m in 2010, but did not specify whether employees would be made redundant.
US economy hotel performance was hit the hardest with an 11.5% like-for-like decline, compared with only a 6.8% decline in other regions.
RevPAR (revenue per available room) in Accor's European up- and mid-market hotels suffered a decline of 10.5%, while also falling in the economy sector by 7.6%.
Spain had the largest revPar decline in both up- and mid-scale hotels with a 35.1% drop, while economy hotels slumped 28.4%.
Accor said its "asset-right" strategy to "lower capital intensity" by selling hotel properties had resulted in the decline in revenue,
The consolidation of the Orbis hotel brand and the appreciation of the euro against the British pound, the Australian dollar and the Brazilian real, also contributed to the decline.
Accor announced cost-saving initiatives including cutting its annual renovation budget by €175m to €315m by 2010.
But Accor said it still had a solid cash position with €1.5bn in "unused committed credit lines" as of April 2009 after accounting for certain recent issues.
These issues include their €600m five-year bonds to mature in 2014, the court ruling against CIWLT which forced Accor to pay €242.5m in February and a 49% stake in Groupe Lucien Bárriere.