In response to the effects of Covid-19, Paris-based Accor
currently has closed more than half of its Accor-branded hotels worldwide, with
that number likely reaching two-thirds in the coming weeks, the company
announced Thursday. It also has instituted a travel ban, hiring freeze, and
reduced the schedules of and/or furloughed 75 percent of its global head office
teams for the second quarter of 2020, the company announced Thursday. This will
result in a 60 million euros reduction in general and administrative expenses
for 2020. The company also made a 60 million euros reduction in its capital
expenditures from reviewing its recurring investment plan for 2020. Some of these
measures were implemented as early as February.
Accor also has withdrawn its proposal for a 2019 dividend
payment of approximately 280 million euros and will instead allocate 25 percent
of it to the launch of the special Covid-19 program "ALL Heartist
Fund." The fund will be used to assist Accor's 300,000 employees, pledging
to pay for their Covid-19-related hospital expenses for those who do not have
social security or medical insurance; to assist furloughed employees suffering
great financial distress, on a case-by-case basis; to assist individual
partners facing financial difficulty, on a case-by-case basis; and to
"further deploy its solidarity initiatives to support front-line
healthcare professionals and nonprofit organizations."
The decision received unanimous support from the board, who
collectively decided to reduce their attendance fees by 20 percent to benefit
the fund. Chairman and CEO Sebastien Bazin will forego 25 percent of his
compensation during the crisis, and the cash equivalent will be contributed to
the fund, according to the company.