Accor ramps up cost-saving measures as coronavirus outbreak hits
By Linda Fox | April 23, 2020
Managing the emergency and preparing for the rebound are the challenges currently facing Accor, the hotel giant says in its first quarter 2020 results.
France-based Accor announced a 17% decrease year-over-year to €768 million in consolidated revenue for the first quarter of 2020.
In its HotelServices division, revenue was down 17.5% to €540 million, while in the new businesses division, which covers vacation rentals and concierge services, revenue was down 13.8% to €32 million.
The company says 62% of its hotels are closed and RevPAR is down 25.4% for the quarter.
CEO Sebastian Bazin says the group is in "a strong position to address the current situation," adding that the company is "taking aggressive measures to adapt our organization."
"Accor's recent transformation has left the Group with a robust balance sheet which will enable it to absorb the economic consequences of this crisis in the coming quarters."
With the ongoing uncertainty, Accor says it cannot predict the financial impact on its 2020 full-year results but says it's in a strong financial position with access to more than €2.5 billion in funds as well as a credit facility of €1.2 billion.
It is estimating a €170 million hit on EBITDA for Q1, which takes into account the closing of properties and some of the cost-saving measures taken, which the company says are "ramping up" in the second quarter.
A travel ban, hiring freeze and reduced schedules or furloughing for three quarters of its global head office teams for the second quarter will result in a saving of at least €60 million in general and administrative expenses in 2020.
In an announcement to employees on April 9, Bazin said the company furloughed or put on temporary leave some 220,000 people.
A review of the investment plan for the year has led to a €60 million reduction in capital expenditure.
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