Showing further strains from the pandemic’s fallout, French hotel giant Accor is launching a 200 million euro ($235 million) cost-saving plan that will see it cut 1,000 roles, while it is also considering selling the iconic Paris headquarters it purchased in 2016 for 363 million euro (£427 million).
Accor posted revenues of 917 million euro ($1.079 billion) for the first half of 2020. This is down 52.4% compared with the first half of 2019.
“That couple hundred million (in cost savings being implemented) basically implies 1,000 jobs laid off,” said Sebastien Bazin, chairman and CEO of Accor, during an earnings call on Tuesday. The job cuts represent about 5.5% of its total workforce, Bazin said.
At June 30, 2020, Jin Jiang is Accor’s leading shareholder with 13.0% of the share capital corresponding to 17.0% of voting rights. Qatar Investment Authority (QIA) and Kingdom Holding Company (KHC), which became shareholders as part of FRHI Group acquisition in July 2016, respectively hold 11.3% and 6.3% of the Company’s share capital, representing 17.4% and 9.5% of voting rights. Harris Associates holds 8.1% of the Company’s share capital and 6.2% of voting rights. Finally, Huazhu Group Ltd holds 2.9% of the Company’s share capital and 2.2% of voting rights.
Occupancy rate recovery
As of August 3, 81% of the group’s hotels were open, equivalent to 4,000 units.
In terms of occupancy rates, it said China was at 60%; France 56%; Germany 39%; UK 35%; and North and Central America 35%.
Overall, its revenue per available room, or RevPAR, dropped 59.3% in the first-half 2020.
Revenue from its hotel services division fell a similar amount, down 52.8% to 650 million euro ($764 million).
Accor’s net debt as of end-June 2020 came to 1.092 billion euro ($1.285 billion), which was lower that than the 1.333 billion euro ($1.568 billion) it reported on 31 December, 2019.
This improved figure was due to the disposal of Orbis for 1.06 billion euro ($1.246 billion) in March 2020, and the classification of Accor’s headquarters at the Sequana Tower, located in Issy-les-Moulineaux, Paris, as asset and liabilities held for sale. “It’s going to be a reduction in net debt of a couple hundred million,” said Jean-Jacques Morin, deputy CEO.
Going forward, its liquidity position exceeds 4 billion euro ($4.7 billion), which means it could survive another 40 months under current market conditions. Accor also expects 5 to 10% of its room counts in the future to be used as workplaces, due to the growing trend of working from home.
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