With more than half its branded hotels closed worldwide—likely two-thirds in the coming weeks, it said—Accor announced Thursday steps it is taking to mitigate the COVID-19 pandemic’s impact on business.
Given the current situation, Accor is reducing schedules and/or furloughing 75 percent of its global head office teams for Q2, as well as implementing a travel ban and a hiring freeze. These actions, it estimated, will result in a minimum €60 million reduction in general and administrative expenses for 2020.
Additionally, Accor reviewed its recurring investment plan for 2020, resulting in a €60m reduction in capital expenditure. The company is further streamlining all other costs, such as sales, marketing and IT, in line with lower systemwide revenues.
Accor said it currently has more than €2.5 billion in cash on hand and an undrawn revolving credit facility of €1.2 billion. Though uncertainty remains, the company said it expects a severe impact on its 2020 performance but remains bullish on the long-term perspective of the hospitality industry, for Accor, its employees, its owners and shareholders.
Accor is also withdrawing its proposal for a 2019 dividend payment of around €280 million. It decided to allocate 25 percent of the planned dividend to the launch of the ALL Heartist Fund
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