Covid19 hotel development analysis: Accor [Infographic]
Accor’s leadership remains optimistic amid the Covid19 crisis. (Picture: Accor)
TOPHOTELNEWS takes a closer look at Accor, providing an exclusive analysis of the group’s hotel development pipeline and how the company has been affected by Covid19.
With Covid19 bringing the global hotel and tourism industry to its knees, it’s time to look more closely at how some of the key players are impacted by travel restrictions and lockdowns around the world.
We find out how Accor has fared since the onset of this crisis.
Hotel project pipeline review
Accor has been steadily expanding its already sizable portfolio over the past years. Currently, 494 hotels are in the pipeline worldwide across the company’s vast list of brands.
Projects in progress
This is an impressive pipeline for any season, but especially considering the current crisis. While Accor seems to be largely sticking to its growth plans, it is worth noting that as of 13 May 2020, 55 new hotel projects were on hold and 19 had been cancelled.
Despite the harsh impact of the pandemic on the hospitality industry, Accor managed to open 58 hotels in Q1 2020, equating to close to 8,000 keys. At the end of March, the group’s pipeline was ‘stable’ and was made up of 1,202 properties and 208,000 keys, of which 76% were in emerging markets.
Michael Issenberg, CEO for Asia-Pacific at Accor, said that there will certainly be an impact on development in his region because lots of construction sites have closed during lockdowns, and predicted a slowdown in the rate of openings – with more delays than cancellations. Meanwhile, Accor’s chairman and CEO Sébastien Bazin acknowledged that some development would stumble.
Accor’s share price development
Accor’s share price was quite stable at $38.94 until 19 February 2020. Within the next month, it dropped considerably, dropping to $21.96 on 18 March 2020. In the following weeks, the price recovered slightly, reaching almost $30, before falling back to $22.21 on 4 April.
As many countries have been getting their outbreaks under control and travel restrictions have eased, Accor’s shares have started to recover slightly and reached a value of $26.07 on 23 April.
This perhaps reflects growing optimism that the travel industry will recover sooner rather than later. However, with experts predicting a second wave and countries like the US still struggling massively, this uptick may be shortlived.
Accor through the course of Covid19
While things were still looking good for Accor up until February, lockdowns and hotel closures around the world hit the company hard.
However, now that China is allowing domestic travel and many European countries are coming out of lockdowns, Accor’s hotels are set to welcome guests once again. Even so, the company’s leadership does not expect business to return to normal for at least 12 months.
While reviewing Accor’s performance in Q1 2020, Bazin stated: “The group is in a strong position to address the current situation and we are taking aggressive measures to adapt our organisation. 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. At the same time, we are preparing for the recovery alongside the authorities and professional organisations in the countries in which we operate so that the group will be well-positioned to rebound as quickly as possible.”
Interestingly, Bazin has also highlighted the uncertainty of the times ahead and the importance of being flexible. “We might have to reinvent ourselves,” he told Reuters. “Maybe tourism will become more local, more respectful of the environment, maybe there will be less transatlantic tourism…it will be up to us to adapt.”