Accor was hit hard by Covid19, but its management is confident that brighter times lie ahead. (Photo: Accor)
After being hit by plummeting demand earlier this year, Accor is finally seeing signs of recovery as key markets gradually ease Covid19 restrictions.
As countries around the world gradually lift lockdowns and ease travel restrictions, the global hospitality industry is breathing a collective sigh of relief.
We take a look at how Accor, one of the world’s largest hotel groups, is doing right now and consider what recovery looks like for them.
Positive developments for Accor
In mid-May 2020, Accor reported that the company was seeing “initial signs of business recovery”, and noted that 250 temporarily closed properties have reopened since late April. It meant that 42% of Accor’s network was now operating.
While low demand and new safety regulations will doubtless make operations challenging initially, the business was buoyed by positive developments in markets like France, Germany and China.
Accor prepares itself for the challenges ahead
To get through this period of slow cash-flow, Accor has signed an agreement for a new €560m Revolving Credit Facility (RCF), adding to an undrawn €1.2bn RCF signed in July 2018. This brings the group’s level of liquidity to over €4 billion, which could cover another 40 months of operations under current market conditions.
In April, Accor announced several measures to protect its finances, such as a travel ban, hiring freeze, reduced schedules and/or furloughing for 75% of global head office teams for Q2, and a withdrawal of a proposed €280 million dividend payment.
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Hotel giant pins hopes on domestic travel
With countries reopening but international travel remaining difficult, Accor appears to be banking on domestic travel to bring in much-needed business post-crisis.
In Australia, for example, the group has now started seeing bookings exceed cancellations once again at its 380 hotels there. This means historically low occupancy levels could finally start rising again. And chief operating officer Simon McGrath said he was “very optimistic about tourism over the next six to 12 months” on a recent webinar with Tourism Australia.
“One of our main booking platforms would usually [pre-pandemic] bring in about $1.6 million in bookings a day. That got back down to $100,000, but this week it went up to $400,000 to $500,000 a day,” he continued.
McGrath is also optimistic because Australia successfully contained the spread of Covid19, which he thinks will help attract both international guests and hospitality investors.
Finally, the idea of an Australia-New Zealand trans-Tasman travel bubble has been floated and has raised hope among hoteliers and travel professionals alike. “I’m a big supporter of the bubble,” he noted. “[With a combined population of 32 million people] we can make money out of that.”
Let’s take a look at some outstanding hotel projects by Accor:
Raffles Boston Back Bay Hotel & Residences
Accor is a world-leading augmented hospitality group offering unique and meaningful experiences in more than 5,000 hotels globally.
