Accor posts Q1 2020 results
Revenue is down 15.8% like-for-like
As the world begins to come to terms with the harsh reality of COVID-19, businesses are starting to post their first quarter results for the year. Hospitality company Accor has revealed its performance for Q1, registering large decreases in revenue across all its divisions, with RevPAR also plummeting and hotels opting to temporarily shut their doors.
Revenue and RevPAR
Revenue in Q1 2020 totalled €768 million, down 17.0% as reported and 15.8% like-for-like.
RevPAR fell by 25.4%, first in Asia-Pacific (-33.7%) and then in other regions, including Europe (-23.2%) and North America (-22.2%). Accor broke these losses down, with €7 million lost largely due to the disposal of Mövenpick leased hotels and €4 million lost from currencies shifting against the dollar.
Accor’s HotelServices division saw a 17.5% like-for-like decrease in revenues, while the group’s management and franchise business was down 34.9%. Its new business division, made up of concierge services, luxury home rentals, private sales for luxury hotel stays and digital services, saw a 13.8% drop in revenues for the quarter.
Consolidated RevPAR was down 25.4% overall in the quarter, including a 62.6% decline in March alone, after a 2.0% increase in January and a 10.2% decrease in February. In the Middle East & Africa, RevPAR was down 21.4%, attributed to the closure of the region’s holy cities.
Despite the harshness of the pandemic on the hospitality industry, Accor managed to open 58 rooms 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.
The group enforced a travel ban, hiring freeze and reduced schedule or furloughing for 75% of its global head office teams moving into Q2. It also rolled out a review of its investment plan for the year, resulting in a €60 million reduction in capital expenditures for 2020.
In response to the financial ramifications of the pandemic, Accor set up its ALL Heartist Fund, containing €70 million to assist its employees struggling right now.
Accor chairman and CEO Sébastien Bazin summed up the company’s quarter, saying: 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.”