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Accor Lost Nearly €2B in 2020, Though Limiting Cash Burn


Accor lost nearly €2 billion during 2020, yet managed to reduce its monthly cash burn through cost-saving measures from a monthly average of €79 million during the first half of the year to an average €42 million for the second half, according to the company’s fourth-quarter and full-year 2020 earnings report.

“In 2020, the hotel industry navigated an unprecedented crisis,” said Accor chairman and CEO Sébastien Bazin in a statement. “[Accor’s] rollout of measures to protect its financials was quick and disciplined. The measures delivered benefits over the second half of the year, and helped to limit the impact of the health crisis.” 

After a steady recovery throughout the summer and early fall, new Covid-19 outbreaks and renewed travel restrictions damped fourth-quarter results. “Only 2 percent of countries have no restrictions,” Bazin said during a Wednesday call. He added, though, that “we have 85 percent of [our] hotels open today and ready for business. Some are fetching 5 percent or 10 percent occupancy, but the light is on and we are open.” The company is encouraging guests to book with “full flexibility on cancellations,” and of the open hotels, 92 percent have implemented Accor’s new health and sanitation protocols. 

Q4 and Full-Year 2020 Results

Accor’s consolidated fourth-quarter revenue per available room was down 66.2 percent year over year. Occupancy reached 31.7 percent, down 37.6 percentage points on a like-for-like basis. Average daily rate declined 18.7 percent.

The North America, Central America and Caribbean region saw the most erosion in performance metrics. RevPAR for the quarter was down 81.5 percent year over year, while occupancy reached just 17.3 percent, down 51.8 percentage points. In Europe, the RevPAR decline was 73.1 percent year over year. Occupancy was 22.5 percent for the region, down 46.5 percentage points. RevPAR in the Asia-Pacific region eroded the least, at 51.5 percent for the quarter. Occupancy was at 48.7 percent, down 23.6 percentage points. 

Full-year 2020 results weren’t much better. Accor’s systemwide RevPAR declined 62 percent year over year. Occupancy fell 37.4 percentage points to 32.1 percent. ADR was down 16.7 percent. The North America, Central America and Caribbean region again reported steep performance declines, with RevPAR down 73.9 percent and occupancy reaching 23.5 percent, representing a 49 percentage-point decline. Europe was a tick better, with RevPAR down 63.3 percent and occupancy off by 42 percent to 29.4 percent. Though still not great numbers, Asia-Pacific showed the most resilience with a 54.9 percent year-over-year RevPAR decline and occupancy reaching 40.3 percent, a 30 percentage-point decline.

During full-year 2020, Accor opened 205 hotels with 28,942 rooms. The portfolio totaled 5,139 hotels with 753,344 rooms open and a pipeline of 1,209 hotels with 212,000 rooms, of which 73 percent are in emerging markets.

Bazin noted his bullishness on lifestyle hotels as the key for future success. “I’m a big believer that lifestyle will account for probably more than 20 percent of all the offerings of hotels in this planet over the next 20 years,” he said, citing the company’s recent deal with luxury brand operator Ennismore. “It is what individuals want, something more unique. So we made a long bet and a big bet in creating Ennismore. It’s a major acceleration and statement of where Accor should be positioning ourselves without forgetting our legacy plans.” 

RELATED: Accor Q3 2020 earnings



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