Hotels

Accor suffers double-digit drop in Q1 revenue

Huntley Mitchell

Huntley Mitchell

Hospitality giant Accor has revealed its first-quarter results for 2020, with the impact of COVID-19 telling by the significant decline in overall revenue and RevPAR.

Accor’s consolidated revenue for the first three months of this year totalled €768 million ($1.3 billion) – down 17 per cent on a reported basis from the previous corresponding period, and down 15.8 per cent on a like-for-like basis.

Revenue for Accor’s management and franchise business, which sits under its HotelServices arm, was down 34.9 per cent on a like-for-like basis, with its performance hit by the gradual spread of the coronavirus in various regions.

RevPAR fell by 25.4 per cent, which Accor said was reflective of the sharp deterioration in the environment due to the worldwide spread of COVID-19, first in the Asia Pacific (down 33.7 per cent) and then in other regions, including Europe (down 23.2 per cent) and the US (down 22.2 per cent).

Accor noted that compared to other countries, Australia’s decline in RevPAR was somewhat less pronounced at 18.2 per cent, due to COVID-19 having a more limited impact.

“This decline was also mitigated by the hotels being used for quarantine, which had a positive short-term impact on RevPAR,” the company noted.

Changes in the scope of consolidation (acquisitions and disposals) had a negative impact of €7 million ($11.7 million) on Accor during the first quarter, largely due to the disposal of Mövenpick-leased hotels.

Currency effects had a negative impact of €4 million ($6.7 million), mainly due to the Australian dollar, but offset by the US dollar.

During the first quarter of 2020, Accor opened 58 hotels, representing 8,000 rooms, which it said was a “very satisfying level” given the current environment.

Looking forward, Accor said that while it is unable to estimate the financial impact the COVID-19 crisis will have on its results and financial position for the 2020 fiscal year, the company predicts a €170 million ($285.1 million) earnings shortfall.

The company noted that this amount reflects the gradual closure of a majority of its portfolio in March, and only “very partially” incorporates the positive impacts of its cost-saving measures taken at the end of March.

“These are ramping up and will produce most of their results in the coming months,” Accor said.

These measures include a travel ban, hiring freeze and reduced schedules or furloughing for 75 per cent of global head office teams for Q2, a review of the recurring investment plan for 2020, and significant cost reduction measures in areas such as sales, marketing and IT to offset drastic fee decreases.

Accor expects April and May to be the most difficult months of the year, with very low occupancy rates and strong uncertainty about timing and lockdown relaxation, as well as the pace for border re-openings.

However, it noted that a few markets are showing some positive signs of recovery, primarily China.

Commenting on Accor’s Q1 results and outlook, CEO and chairman Sébastien Bazin said: “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.”


Featured image supplied by Accor.

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Tourism

Ardent Leisure hit with record $3.6m fine over Dreamworld tragedy

Ardent Leisure has been handed what it has described as “the largest fine in Queensland history for a workplace tragedy”.

Share

CommentComments

Aviation

Aviation Wrap: Virgin Australia sale update, United makes COVID-19 tests available to customers + MORE

It’s been a landmark week for carriers near and far. Lucky for you, our Aviation Wrap continues to keep you abreast of the latest in this space.

Share

CommentComments

Destinations

Tourism Australia reminds international travellers what’s waiting for them with incredible new ‘8D’ videos

These incredible new vids could also come in handy for agents looking to woo some domestic clients.

Share

CommentComments

Travel Agents

TravelManagers helps Victorian agents find temp work

A group of TravelManagers agents have found an alternative way to earn money during the COVID-19 pandemic, with a little help from the network’s national partnership office.

Share

CommentComments

Destinations

South Australia is giving away 200 return flights (and some holiday packages) to NSW travellers

In celebration of South Australia easing restrictions to NSW travellers, 200 return airfares and a handful of holiday packages are up for grabs.

Share

CommentComments

Travel Agents

Corporate Travel Management emerges from trading halt with big acquisition

Jamie Pherous has reason to smile after CTM announced it has caught a very big fish.

Share

CommentComments

Destinations

Sun seekers will adore these Malaysian islands of Terengganu

by Sponsored by Tourism Malaysia

Along with drawing locals in for its culture and cuisine, Terengganu’s secluded islands and beaches are a paradise for sun seekers. Here’s all you need to know about this lesser-known Malaysian state.

Share

CommentComments

Hotels

Luxury floating hotel docked at Sydney’s Palm Beach burns down

In sad news for those looking for a luxe stay at Sydney’s northern beaches, this floating hotel was “irreparably damaged” when a fire recently broke out on board.

Share

CommentComments

Aviation

Man charged after joking his cousin had a bomb on Auckland flight

Unsurprisingly, it is STILL a bad idea to joke about bombs when you are boarding a plane, just in case anyone was wondering. We hope you weren’t.

Share

CommentComments

Cruise

Aussie food suppliers jump on board calls for resumption of cruising

Aussies farmers, beverage companies, transport providers and all the others who fill cruise ships and land excursions with all those delicious goodies have banded together to support the cruise industry.

Share

CommentComments

Destinations

Destination Wrap: LA launches trade page, Spanish tourism board’s new Australian director + MORE

In the dark after a weekend away from travel news? Check back in with this breakdown of the latest destination updates.

Share

CommentComments

Tourism

Regional tourism receives $250 million cash injection

The government has given regional tourism operators a reason to jump for joy this morning, and caused two industry associations to give such an aggressive thumbs up that they are both now suffering from pulled muscles in their hands.

Share

CommentComments