AccorHotels says it will be forced to eliminate 1,000 jobs as the Covid crisis makes its income more than half.
Revenue for the first six months of 2020 fell 52%, to 917 million euros ($1.1 billion), in which it was in 2019, the organization announced on Tuesday. At the same time, Accor collapsed at losses of 1.5 billion euros, up from 141 million euros in profits last year.
“Poor functionality in the first part of the year reflects the ordinary environment connected to the coronavirus crisis,” said Jean-Jacques Morin, managing deputy director of the French group.
In an attempt to cope with storm Covid’s continuation, Accor is implementing drastic cost-cutting measures, which aim to save two hundred million euros by 2022. “These few hundred million are necessarily 1000 jobs fired,” Sébastien Bazin said. ACcor CEO said Tuesday when he delivered the plan.
Covid is an ongoing earthquake for the hotel industry. Seismic waves are felt all over the world. Nothing but this giant hotelier. The Parisian group, the largest hotel company in Europe and the sixth largest in the world, has 5,099 hotels in 110 countries.
At the height of the crisis, nearly two-thirds of the Mercure to Raffles hotels closed. Disposable Room Income (RevPAR) has been reduced by 59% in the last 6 months and many rooms were empty.
In the first week of July, for example, U.S. domestic hotel occupancy rates fell by 38% year-on-year, according to STR. Throughout June, they were halved.
Losses suffered by the pandemic mean loss of tasks of about 5.5% of the organization’s global workforce, Bazin said. The organization has a total of 18,000 employees. Task cuts will affect all brands, Morin said, adding that it was too early to determine where they will be manufactured.
Accor should check to compensate for some of the planned task cuts through an educational program. Approximately two hundred workers with salaries under 50,000 euros will remain on the payroll for at least two years and will be recycled. “There’s no way we’re going to leave other people private on the streets of the world today,” Bazin said.
Bazin describes the existing as “global, sudden, violent and unprecedented.”
“The Covid-19 crisis has pushed the world back decades,” he said, with the outside world at least three decades.
They have an effect on hotels and the hotel industry is catastrophic. Based on the knowledge of the World Travel and Tourism Council, Bazin predicts that unemployment in the industry will be the worst in 40 years, with 121 million lost tasks. Travel and hospitality will contribute 3% to unemployment figures.
“The peak of the crisis is certainly us, but the recovery will be gradual,” Bazin said. On the transparent side, 81% of the group’s hotels, some 4,000, are reopened.
Covid has devastated the occupancy rate of hotels around the world, like all hotel groups. (Many small independent hotels in have been forced to close permanently).
According to Accor, occupancy rates are smart in China (60%) France (56%). Signs of recovery are on the rise, but in France the figure is still well below the same occupancy rates of the high season. In Paris, 70 to 90% is more the norm.
In Germany, the national average occupancy rate is 39% in the United Kingdom at 35%, as in North and Central America. In London, at this time last year, the occupancy rate is 86.7%. In July, the occupancy rate of Irish hotels would have been less than part of their previous same level: 42% instead of 90% more.
Despite the crisis, the organization opened 86 hotels, representing 12,000 rooms, in the early part of the year. The hotel giant is lately in the process of reaching an agreement to take over and rename around a hundred Travelodge homes in the UK amid a rental dispute.
But Accor still to rationalize the CEO said:
“After taking those emergency measures, we will now have to attach the paintings of a soft weight asset style to a completely friendly company. Beyond Covid-19, this is essential. Accor wants to be simpler, smoother, more agile and even closer to the field. “
As noted through other players in the hotel industry, the crown effect includes a strong phenomenon of last-minute bookings.
Not an hour before, but more than 50% of bookings in Accor’s global portfolio, from Ibis to Sofitel, are less than five days in advance. This compares to the same ten days before Covid.
Bazin says travelers make a Monday for the following weekend.
I have 3 decades of experience as a journalist, foreign correspondent and writer-photographer. Working for print, virtual and radio media on 4 continents,
I have 3 decades of experience as a journalist, foreign correspondent and travel writer-photographer. Working for print, virtual and radio media on 4 continents, I am also an experienced hotel journalist and writer of travel guides and cultural histories in Australia, France, Italy, Spain, Switzerland and Borneo. Deep on the road between my Parisian and Australian bases, I write for Forbes with a globetrotting attitude and a topicality in travel, culture, hospitality, art and architecture. My hobby is to capture the unique people, situations and occasions I encounter along the way, whether in words and images. I have a bachelor’s degree in professional writing from the University of Canberra, a master’s degree in European journalism from Robert Schuman University in Strasbourg and a member of the Society of Travel Writers of the United States. Love for my wild local island of Tasmania fuels my commitment to sustainable travel and conservation.