Q4 2020 Covid development update: Accor

by | 21 Oct 2020 | Chains

Drawing on exclusive data from the TOPHOTELPROJECTS construction database, we reflect on how French hospitality group Accor’s development plans have changed in the midst of the pandemic.

The global hotel sector has never experienced an upheaval on the scale of the Covid19 crisis before, and leading players like Accor have had to think on their feet in order to survive, having previously enjoyed years of steady growth in a relatively benign trading environment.

Founded by friends Paul Dubrule and Gérard Pélisson, who opened their first Novotel in 1967, Accor has grown into a true giant of the industry with around 5,100 hotels and 748,000 rooms across 110 countries. These days, the Paris-headquartered group is the driving force behind an extraordinary array of brands, including Raffles, Fairmont, Banyan Tree, Sofitel and Rixos in the luxury segment; and Pullman, Mondrian, Mövenpick, Swissôtel and Grand Mercure in the premium category.

But the company, which is listed on Euronext Paris, is undoubtedly feeling the effects of coronavirus on every part of its hospitality empire as 2020 draws to a close, especially when you consider how many countries have introduced temporary travel bans and lockdowns to reduce infection rates.

Accor grows its pipeline despite Covid19

To help us understand how Accor is behaving in this unprecedented climate, we’ve asked our researchers to track some of the group’s key development stats over recent months, and are publishing them here for the very first time:

Group
In progress
On hold
Cancelled this month
Date
Accor
494
55
2
05/13/2020
Accor
494
54
3
06/02/2020
Accor
488
54
2
07/02/2020
Accor
501
56
1
08/04/2020
Accor
520
63
7
09/02/2020
Accor
521
69
8
10/02/2020

This table, which pulls in figures from our subscription-based database, reveals that Accor had 494 hotel projects in progress as of 13 May 2020, at a time when the first wave of coronavirus was still sweeping through the company’s European heartlands. Interestingly though, the number has generally increased in the months that followed, indicating that the group is continuing to expand its pipeline amid the wider market uncertainty, with the total standing at 521 as of 2 October. In percentage terms then, Accor’s portfolio of active hotel projects has actually grown by 5% since mid-May – hardly the disaster that some hospitality experts were forecasting earlier in the year.

However, we also need to take into account how many of the group’s schemes are not being advanced at present, but instead lie dormant. From the table, we can see that 55 hotel projects were identified as on hold as of 13 May, but that this figure gradually crept up from July onwards, reaching 69 on 2 October. This equates to a 25% increase in the number of Accor’s schemes that have been mothballed between May and October, which will no doubt be a worry for anyone connected to the hospitality industry.

Additionally, we need to consider whether significantly more projects have been falling through amid the pandemic. On this count, just two schemes had been cancelled in the month leading up to 13 May, as opposed to eight in the comparable period ending 2 October. This four-fold increase is obviously a cause for concern, but equally we mustn’t lose sight of the fact that the total amounts we’re dealing with are small enough to be skewed by a single atypical month – only one scheme was scrapped in the month leading up to 3 August, for instance, so it’s probably still to early to draw firm conclusions about any long-term trends here.

And while we’re on the subject of highlighting what the data can and can’t show, we ought to stress that we’d always expect a minority of hotel schemes would fail to progress even before Covid19 took hold. Sometimes, projects are never realised because the group decides that they’re no longer a strategic priority, or the operator withdraws over financial complications, or the local authorities refuse planning permission and so on, meaning it’d be unwise to attribute every single misstep to coronavirus. Indeed, if previous years are anything to go by, several of the mothballed schemes we’re tracking will be revived and taken through to completion eventually anyway.

Accor remains confident that better times lie ahead

Overall, what the data reveals is that Accor is still progressing the overwhelming majority of its hotel projects in the post-Covid era. This can be seen by looking at how the company has managed to finish a number of eye-catching developments in recent months, including the exclusive Raffles Bali resort in Indonesia, the extravagant 523-key Fairmont Sanya Haitang Bay in China and the stylish Hôtel Perle d’Orient Cat Ba – MGallery in Vietnam.

Despite all the doom and gloom in the industry, we need to remember that Accor currently has more than 500 active projects on its books – a figure that has been steadily growing in recent months – and shows no signs of slowing down anytime soon. If scientists manage to swiftly find a cure for Covid19, or at least contain its spread more effectively, this bold strategy may yet pay dividends for France’s biggest hotel group.

Click here to read our exclusive Q4 2020 Covid development update series in full: Marriott International | Hilton Worldwide | Accor | IHG | Hyatt Hotels Corporation | Radisson Hotel Group | The Ascott | Wyndham Hotel Group | What the data tells us

Many TOPHOTELNEWS articles draw on exclusive information from the TOPHOTELPROJECTS construction database. This subscription-based product includes details of thousands of hotel projects around the world, along with the key decision-makers behind them. Please note, our data may differ from records held by other organisations. Generally, the database focuses on four- and five-star schemes of significant scale; tracks projects in either the vision, pre-planning, planning, under-construction, pre-opening or newly opened phase; and covers newbuilds, extensions, refurbishments and conversions.

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