COVID-19 quarantine a saviour for Accor hotels

French hotel group Accor’s Chief Executive Officer and chairman Sebastien Bazin. Picture: AFP
French hotel group Accor’s Chief Executive Officer and chairman Sebastien Bazin. Picture: AFP

Business generated from government-imposed quarantine measures helped Australia’s Accor hotel network outperform its European and North American counterparts at the height of the COVID-19 pandemic in April and May.

However, in releasing Accor’s 2020 half-year results, Paris-based chairman and chief executive Sebastien Bazin said the hotel management company’s global revenues had dropped more than 52% while earnings before interest, tax and depreciation had plummeted more than 60%.

In Australia, revenue per available room fell by 49.3% in the first half of the year. “The decline was less significant than in other countries owing to the more limited COVID-19 impact over the first quarter,” Bazin said, adding that government-imposed quarantine measures were the main source of business for hotels.

Accor is Australia’s largest hotelier, operating more than 400 hotel properties across Australia, New Zealand and the Pacific.

Bazin said leisure travellers, and not business travellers, were helping the hotel management company ease out of the coronavirus pandemic, with more than 80% of its global hotel network now reopened.

Nevertheless the Asia Pacific region was particularly hard-hit in April and May, with revenues per available hotel room dropping by more than 77% before the contagion spread to Europe, where revenues per available room dropped by more than 90 per cent in the second quarter.

Bazin said the COVID-19 shock to the hotel industry was both “violent and unprecedented” but Accor’s decision to adopt an asset-light approach — meaning it embarked on a selldown of its bricks-and-mortar hotel assets several years ago — had limited the impact of the ­crisis.

“Having taken these emergency steps, we must now finish the job from an asset-light model to a full asset-light company,” he said.

“Beyond COVID-19, this is essential.

“Accor must become simpler, leaner, more agile,” he said.

Accor said currency effects created a €13m ($21.4m) loss due to the 4.6% drop in the Australian dollar and the 19.1% drop in the Brazilian real.

Management and franchise revenues were down 72% globally, while in the Asia Pacific they dropped 70.8%, producing a poorer performance than North America and South America.

All up, earnings before interest, tax, depreciation and amortisation plunged by €227m during he first half of 2020, down more than 153 per cent compared with the previous corresponding ­period.

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