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Accor's first-quarter 2020 revenue per available room fell 25.4 percent year over year on a like-for-like basis, according to the company, which credited the sharp deterioration in the industry due to the global coronavirus outbreak. For the month of March, the decline was 62.6 percent.
On a regional basis, quarterly RevPAR was down 33.7 percent year over year in Asia/Pacific, down 23.2 percent in Europe, and down 22.2 percent in North America. In China, where the virus was first reported, first-quarter RevPAR fell 67.7 percent year over year, however the company sees signs of an improvement with a pickup of occupancy rates and restaurant business.
Consolidated first-quarter revenue totaled €768 million, a 15.8 percent decline on a year-over-year, like-for-like basis.
"The world is facing an unprecedented health crisis that is having massive and unique impacts on the tourism industry," said Accor chairman and CEO Sébastien Bazin. "Nearly two-thirds of our hotels are currently closed, and most of the others are being used to support healthcare workers and all those on the front lines of the fight against Covid-19. … Today, our challenge is twofold: manage the emergency and prepare for the rebound."
Still, Accor opened 58 hotels with nearly 8,000 rooms during the quarter, and now has a portfolio of 746,903 rooms. As of March 31, its pipeline comprised 1,202 hotels with 208,000 rooms, of which 76 percent are in emerging markets. As of April 22, 62 percent of the company's hotels are temporarily closed, representing more than 3,100 hotels.
Accor also reported on the measures it is taking to mitigate the negative business effects of Covid-19. It has instituted a travel ban and hiring freeze and reduced schedules or furloughed 75 percent of global head office teams for the second quarter, resulting in a minimum €60 million reduction in general and administrative expenses for 2020. A review of the recurring investment plan for 2020 resulted in a €60 million reduction in capital expenditures for the year. It also significantly reduced costs in departments including sales, marketing and IT to offset drastic fee decreases. In addition, Bazin will forego 25 percent of his compensation during the crisis.
The company would not release any guidance for the year as the outbreak continues to affect the industry. It did, however, note that April and May are expected to be the most difficult months of the year, "with very occupancy rates and strong uncertainty about timing and lockdown relaxation as well as the pace for border reopenings."
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