Results are in: Accor reveals COVID-19 impact for Q1 2020
Accor experiences a downturn but remains optimistic overall. (Credits: Accor)
Accor reveals that its Q1 revenue is down 15.8% like-for-like due to the COVID-19 pandemic’s effect on the travel and tourism industry.
With the breakout of COVID-19 bringing many industries to a standstill around the world, it’s no surprise that the hotel and travel sectors are hard-hit by security measures.
Now that the first quarter is over, companies like Accor are counting their losses and looking ahead at what future months may bring.
A look at the numbers
Accor revealed its Q1, 2020, financial information in a recent press release and reported €768 million in revenue. This is down 17% from the same time last year and 15.8% like-for-like.
RevPAR (revenue per available room) dropped by 25.4% worldwide. The decrease in RevPAR started in the Asia Pacific region, where the KPI fell by 33.7% and then progressed to Europe (-23.2%) and North America (-22.2%).
Currently, 62% of Accor’s hotels are closed, meaning more than 3,100 rooms are currently not being sold. Operating properties are being used to house healthcare workers and COVID-19 patients with light symptoms.
Accor’s mitigation measures
While Accor currently estimates a €170 million EBITDA shortfall for Q1, this number barely takes into account the company’s drastic mitigation measures.
These include cancelling the dividend and suspending share buyback programs until further notice. Accor has also issued a travel ban, hiring freeze and reduced hour plans for 75% of global head office teams for Q2.
Cost-cutting measures paired with the group’s strong financial position are a reason for optimism though. At the end of March, Accor had €2.5 billion in available liquidity and an undrawn credit faculty of €1.2 billion.
“The Group is in a strong position to address the current situation and we are 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. At the same time, we are preparing for the recovery alongside the authorities and professional organizations in the countries in which we operate so that the Group will be well-positioned to rebound as quickly as possible,” said Sébastien Bazin, Accor’s chairman and CEO.
Despite everything: Accor reports portfolio growth
Despite the difficult situation Accor and now finds itself in, the company still opened a solid 58 hotels with 8,000 rooms around the world in Q1. This brings the group’s total number of hotels to 5,085 with 746,903 rooms worldwide.
Another 1,202 hotels with 208,000 rooms are currently in the pipeline, 76% of which will open in emerging markets. The launches of some of these new properties will likely be delayed due to the pandemic.