In the first half, Accor unsealed 86 hotels, i.e. 12,000 rooms, highlighting the appeal of the Group to hotel owners. At end-June 2020, the Group had a record of 747,805 rooms (5,099 hotels) and a channel of 206,000 rooms (1,197 hotels), of which 75 per cent in emerging markets. As of August 3, 2020, 81 per cent of Group hotels were open, i.e., more than 4,000 units.

Accor’s RevPAR was down 59.3 per cent in first-half 2020. This marked decline reflects the dramatic deterioration in the industry linked to the spread of the Covid-19 virus worldwide, as well as lockdown measures and border closures implemented by governments throughout the world.

Nevertheless, the augmented hospitality hotel group is observing signs of recovery in all regions, after a particularly hard-hit period in April and May, first in Asia-Pacific (RevPAR down 77.4 per cent in Q2) before gradually spreading to other regions, particularly Europe (RevPAR down 90.6 per cent in Q2).

Reflecting on the same, Sébastien Bazin, Chairman and Chief Executive Officer of Accor said, “The shock that our industry is experiencing is both violent and unprecedented. Against this backdrop, we have managed to limit the impact of the crisis: on our performance by taking immediate steps to protect our resources and, thanks to the Group’s recent years transformation and our sound financial structure; on our employees by implementing concrete and immediate support measures. The peak of the crisis is undoubtedly behind us, but the recovery will be gradual.”

“Having taken these emergency steps, we must now finish the job from an asset-light model to a full asset-light company. Beyond Covid-19, this is essential. Accor must become simpler, leaner, more agile and even closer to the field. These initiatives will enable us to extend our leadership, make our decision process more efficient and boost our recovery. They will be implemented with transparency and candour and, in a spirit true to our values of solidarity and commitment,” he added.

In the first half, Accor unsealed 86 hotels, i.e. 12,000 rooms, highlighting the appeal of the Group to hotel owners. At end-June 2020, the Group had a record of 747,805 rooms (5,099 hotels) and a channel of 206,000 rooms (1,197 hotels), of which 75 per cent in emerging markets. As of August 3, 2020, 81 per cent of Group hotels were open, i.e., more than 4,000 units. 

According to the reports, Accor filed the consolidated revenue for the first half of 2020 totalled €917 million, down 48.8 per cent like- for-like and down 52.4 per cent compared with the first half of 2019.

Hotel Services, which includes fees from Management & Franchise (M&F) and Services to Owners, reported revenue of €650 million, down 52.8 per cent  like-for-like reflecting the decline in RevPAR as a result of the health crisis and government lockdown measures implemented worldwide. Similarly, Management & Franchise (M&F) revenue amounted to €139 million, down 72 per cent like-for- like, reflecting the collapse in incentive fees based on hotel operating margin generated from management contracts. 

The revenues of Hotel Assets & Other was down by 40.2 per cent like-for-like to €237 million. This segment saw a more moderate decline in business thanks to a more limited Covid-19 impact in Australia in the first quarter, and the delayed spread of the pandemic to Brazil. The 54.4 per cent decline in revenue as reported was exacerbated by the disposal of the Mövenpick leased hotel portfolio in early March 2020. The division’s hotel base included 168 hotels and 30 071 rooms at June 30, 2020. 

New Businesses (concierge services, luxury home rentals, private sales of luxury hotel stays, and digital services for hotels) generated revenue of €46 million at end-June 2020, down 40.5 per cent on a like-for-like basis. The limited differential versus the 40.3 per cent decline as reported is linked to forex movements.  Combined with two undrawn renewable credit facilities (RCF) for a total of €1.76 billion to the existing cash and cash equivalent, Accor benefited from a robust liquidity position, topping more than €4.0 billion end-June 2020. 

Pursuant to a decision handed down by the French Administrative Court of Appeal on July 7, 2020, Accor benefited from a refund of €307 million linked to the précompte/tax credit dispute, boosting the Group’s liquidity position already reported at end-June 2020. In October 2018, The European Court of Justice ruled that the précompte/tax credit system for dividend payments was contrary to certain EU regulations. A final ruling from French tax authorities could be handed down within the next two months. As a result, no impact has been reported in the consolidated financial statements as of end-June 2020. 

As the crisis arose, Accor took immediate drastic measures to mitigate the impact on its earnings. They included a €60 million G&A annual cost savings programme which was already 60 per cent achieved by end-June 2020, as well as a sharp reduction in other operating costs (SMDL, Hotel Assets and New Businesses). 

In a second phase, the Group also reviewed its organization through a granular and disciplined analysis (“Zero-Base Budget”) in order to shift from its new asset-light business model to an asset-light company. This will lead to the implementation of a €200 million recurring cost saving plan on a cost base of 1.2 billion in 2019 (i.e. HotelServices and Holding). The plan includes, Simplification and realignment of operating structures in different regions and Automation of tasks for repetitive processes i.e., on an annualised basis, 2/3 of these cost savings will be generated by end-2021 and 100 per cent by end-2022.