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, while last year it recorded 141 million euros in profits.
“The poor functionality in the first part of the year reflects the ordinary environment related to the coronavirus crisis,” said Jean-Jacques Morin, deputy managing director of the French group.
In an attempt to cope with the continuation of Storm Covid, 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, Accor’s president and CEO, said Tuesday speaking.
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, some two thirds of the hotels from Mercure to Raffles brands closed. The revenue per available room (RevPAR) dropped by around 59% over the past 6 months–and many room were empty.
In the first week of July, for example, U.S. domestic hotel occupancy rates fell by 38% year-on-year, according to hotel expert STR. Throughout June, they were halved.
The losses suffered by the pandemic meant 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 losses of 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 brightest side, 81% of the group’s hotels, about 4,000, are reopened.
Covid has devastated the occupancy rate of hotels around the world, as with 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 half of their previous level: 42% instead of 90% more.
Despite the crisis, the organization opened 86 hotels, representing 12,000 rooms, in the first part of the year. The hotel giant is recently in the process of reaching an agreement to take over, and rename, about a hundred Travelodge houses 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 effects of the crown include a strong phenomenon of last-minute bookings.
Not an hour ahead sure, but over 50% of bookings at Accor’s global portfolio–from Ibis to Sofitel–are being made less than 5 days ahead. That compares to the more usual ten days, pre-Covid.
Bazin says travelers are making decisions on a Monday for the following weekend.
I have three decades of experience as a journalist, foreign correspondent and travel writer-photographer. Working for print, digital and radio outlets on four continents,
I have three decades of experience as a journalist, foreign correspondent and travel writer-photographer. Working for print, digital and radio outlets on four continents, I am also a veteran hotel industry reporter and author of travel guides and cultural histories to Australia, France, Italy, Spain, Switzerland and Borneo. Very often on the road between my Paris and Australian bases, I write for Forbes with a globetrotters perspective and newsy edge on travel, culture, hotels, art and architecture. My passion is capturing the distinctive people, places and events I encounter along the way, both in words and pictures. I hold a degree in Professional Writing from Canberra University, an MA in European Journalism from the Université Robert Schuman Strasbourg, and am a member of the Society of American Travel Writers. A love for my wild home-island of Tasmania fuels my commitment to sustainable travel and conservation.