In response to the effects of Covid-19, Paris-based Accor has closed more than half of its branded hotels worldwide, with that number likely reaching two-thirds in the coming weeks, the company announced Thursday.
It has also instituted a travel ban, hiring freeze and reduced the schedules of and/or furloughed 75 per cent of its global head office teams for the second quarter of 2020. This will result in a €60 million reduction in general and administrative expenses for 2020. The company also made a €60 million reduction in its capital expenditures from reviewing its recurring investment plan for 2020. Some of these measures were implemented as early as February.
Accor also has withdrawn its proposal for a 2019 dividend payment of approximately €280 million and will instead allocate 25 per cent of it to the launch of the special Covid-19 programme "ALL Heartist Fund." The fund will be used to assist Accor's 300,000 employees, pledging to pay for their Covid-19-related hospital expenses for those who do not have social security or medical insurance; to assist furloughed employees suffering great financial distress, on a case-by-case basis; to assist individual partners facing financial difficulty, on a case-by-case basis; and to "further deploy its solidarity initiatives to support front-line healthcare professionals and nonprofit organisations."
The decision received unanimous support from the board, who collectively decided to reduce their attendance fees by 20 per cent to benefit the fund. Chairman and CEO Sebastien Bazin will forego 25 per cent of his compensation during the crisis, and the cash equivalent will be contributed to the fund, according to the company.