More than half Accor branded hotels worldwide are closed, likely over two thirds in the coming weeks. One piece of good news is the confirmation of the initial recovery of the Chinese hotel market, with mild improvements in occupancy and F&B activity. The abrupt deterioration in the situation has prompted the Group to take drastic actions across its global operations. These actions are indispensable to limit the impact on earnings and cash, and necessary to prepare for the post-crisis recovery.
Measures were implemented as early as February. Given the situation, the Group has decided to take aggressive, incremental actions. Collectively, these include:
- Travel ban, hiring freeze, reduced schedules and /or furloughing for 75% of global head office teams for Q2, resulting in a minimum €60m reduction in G&A for 2020,
- Reviewed recurring investment plan for 2020 resulting in a €60m reduction in capital expenditures.
The Group is further streamlining all other costs (e.g. sales, marketing, IT), in line with lower systemwide revenues.
Sébastien Bazin, Chairman and CEO of Accor, commented: “Welcoming, protecting and taking care of others is at the very heart of what we do. In light of the urgency and the scale of the situation, we have decided to act in an immediate and meaningful way, in the spirit of our values and commitments. Through this impactful gesture, we wish to express our solidarity and gratitude to all those demonstrating courage and selflessness during this crisis. On behalf of the Board, I would like to thank the Group’s main shareholders. Without them, the “ALL Heartist Fund” would not have been possible. I also want to pay a special tribute to the Accor teams around the world. They are facing the current crisis with admirable courage, dedication and professionalism. As our industry is going through tough times, we have to make tough decisions, but Accor has a strong balance sheet which will enable it to withstand this crisis and emerge with strength during the recovery period. I am confident that Accor will soon rediscover the road to growth.”
