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Projecting into the future has become impossible for travel businesses, as booking windows have shortened significantly.
Releasing half-year 2020 results, Accor Hotels says 60% of all bookings being made in Europe are for stays within five days.
CEO Sebastian Bazin says that travelers are making decisions on a Monday for the following weekend.
Outlining plans for a further $237.5 million in recurring savings, Bazin describes the current situation as “global, sudden, violent and unprecedented.”
He adds that in 2020 international travel is the lowest for the past 30 years and unemployment is going to be the worst for 40 years, with travel and hospitality alone contributing 3% to unemployment figures.
Revenue for the France-based hotel giant was down 52% to $1.1 billion, or 49% on a like-for-like basis.
EBITDA came in at a loss of $269.6 million. Overall the group made a net loss of $1.8 billion compared to a net profit of $167.5 million year-over-year.
The company is currently seeing occupancy rates of 60% in China, 56% in France, 39% in Germany, 35% in the U.K. and 35% across North and Central America.
The $237.5 million in cost savings includes the termination of 1,000 jobs, mostly from regional head offices.
Despite the cuts, Accor says it plans to keep the “under-privileged, most fragile” employees on the books for two years while the outlook for hospitality becomes clearer and they can retrain for other jobs at Accor’s expense.
The financing will come from Accor’s ALL Heartist initiative which Bazin says has already paid out $11.8 million of the total $83 million fund.
While projections are difficult, it says, Accor anticipates business travel will remain down by 10% permanently as people move to digital communication and working from measures remain in place.
However, Bazin says he’s confident the 10% can be made up by using local hotels and their facilities as permanent offices.
“You can give the guy the alternative not to say at home or do an hour-and-a-half on the subway but go to the neighbourhood hotel,” he says. “We can do it at large, on a subscription model and have five to 10% of the room count transferred into premises at a time of day when you don’t need those facilities.”
He adds that Accor is working with co-working specialist Wojo, which it owns a 50% stake in, on the initiative.
Source: travelweekly.com