French hotel group Accor closes two-thirds of hotels and furloughs three quarters of its staff
Company is temporarily laying off more than 200,000 workers as more than 3,000 of its hotels are shut
French hospitality group Accor closed two-thirds of its hotels and is furloughing, or temporarily laying off, 75 per cent of its staff.
The company is also cancelling its planned €280 million (Dh1.1 billion) dividend payout against 2019 earnings because of the coronavirus crisis as it seeks to preserve cash.
The company is closing more than 3,000 of the group's 5,000 hotels and is making more than 200,000 staff temporarily redundant, but its chief executive Sebastien Bazin told Bloomberg Television he intended to reopen all of the properties and re-employ the workers as soon as possible.
"I don’t know how long the crisis is going to last, but I know you’re going to see light at the end of the tunnel," Mr Bazin said.
"I intend to reopen every one of them, I intend to re-hire every employee and I just hope that people are going to come back traveling …. by early this summer."
The travel and tourism sector has been one of the hardest hit by the global restrictions put in place to curb the spread of the coronavirus. Last month, the World Travel and Tourism Council said it expected about 75 million jobs would be lost in the sector globally as a result of the outbreak, and the loss in tourism revenue would mean a $2.1 trillion (Dh7.71tn) hit to global GDP in 2020.
The main uncertainty facing the business is how long a return to normality will take, Mr Bazin said, but added that as of Tuesday evening only 10 per cent of the company's bookings for July and August had been cancelled.
"It doesn’t mean people will show up it just means, I guess, people are - and have to be - as optimistic as I am."
In China, he said that 85 per cent of the 25,000-strong workforce in its hotels were at home two and-a-half weeks ago, but that the same number were now back at work. Hotel occupancy remains low – at 10-20 per cent in many cities – but is much higher (nearer 60 per cent) at budget chains that rely on local Chinese customers.
The company is setting aside 25 per cent of the scrapped dividend payout to help staff facing financial hardship, Mr Bazin said. He also added the company had a strong balance sheet to help it through the crisis, with about €2.5bn worth of cash on its balance sheet and access to a €1.2bn funding line.
"As of this minute, I don’t intend to draw on the line, we have no necessity for it," he said.
There are more than 1.36 million confirmed cases of the coronavirus and more than 36,000 deaths as of Tuesday, according to Johns Hopkins University, which is tracking its spread. More than 292,000 people have recovered.
Updated: April 8, 2020 01:46 PM