Accor ‘taking aggressive measures to adapt'
Hotel group Accor has said it is taking "aggressive measures to adapt" during the coronavirus crisis in a trading update for the first quarter of the year.
The group, which has 5,000 hotels and residences worldwide, reported first quarter revenue of €768m (£675m), down 15.8% like-for-like, and a 25.4% in revenue per available room (revpar), but chief executive and chairman Sébastien Bazin (pictured) said Accor has a "robust balance sheet which will enable it to absorb the economic consequences of this crisis".
This includes more than €2.5b (£2.2b) in available liquidity at the end of March and an undrawn revolving credit facility of €1.2b (£1.05b). The group reported earlier this month that it was taking measures such as furloughing of staff, reduction of capital expenditure and significant cost reduction to mitigate the effects of coronavirus.
In the group's UK business, revpar declined by 22.1%, with London more affected than regional cities with revpar down 23.9% and 19.7%, respectively. Most hotels in the UK have been closed since 25 March.
April and May are expected 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 reopenings. However, a few markets are showing some positive signs, primarily China, where there are first indications of recovery.
Bazin said: "The world is facing an unprecedented health crisis that is having massive and unique impacts on the tourism industry. Nearly two-thirds of our hotels are currently closed, and most of the others are being used to support healthcare workers and all those on the frontlines of the fight against Covid-19. Against this backdrop, the efforts of our employees and our owners have been extraordinary.
"Today, our challenge is twofold: manage the emergency and prepare for the rebound.
"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."
During the first quarter of 2020, Accor opened 58 hotels, which it said was a "very satisfying level given the current environment", with a "stable" pipeline of 1,202 hotels at the end of March. As of 22 April, 62% of the group's hotels are closed.
While the group said visibility was not sufficient to estimate the financial impact coronavirus will have on it, Accor estimates a €170m (£149m) shortfall in earnings before interest, depreciation and amortisation (EBITDA).
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