Hotel group Accor is planning to cut 1,000 jobs as part of a €200 million per year cost saving plan to mitigate the impact of the coronavirus crisis.
Accor, which runs high-end chains such as Raffles and Sofitel as well as budget brands such as Ibis, said that it will reduce its costs by 17% compared with 2019 after lockdown measures and border closures to tackle the COVID-19 pandemic dented its business.
It will have to spend approximately €300 million to implement this plan, CFO Jean-Jacques Morin said after Accor reported that it swung to a €227 million first-half loss before interest, tax, depreciation and amortisation (EBITDA) compared to EBITDA of €375 million in the year-earlier period.
"It is difficult to implement cost saving measures in our industry without it having an effect on staff," Morin added.
Accor, which operates more than 5,000 hotels in 111 countries, cannot yet specify where the job cuts will be, he said. He said that the company employs 18,000 people at headquarter level.
Global tourism revenues are expected to fall by up to $3.3 trillion due to coronavirus restrictions, a UN study has forecast, based on the most pessimistic scenario for the industry, with lockdown measures lasting 12 months.
However, Accor said that 81% of its hotels are now open and that it had a solid liquidity position of more than €4 billion at the end of June.
Closing In On Travelodge Deal
In an interview with The Financial Times, Accor chief executive Sebastien Bazin said that Accor is closing in on a deal to take over the contracts of approximately 100 Travelodge hotels, which would involve Accor taking a 10% stake in a new special purpose vehicle that would be majority-owned by the Travelodge landlords.
"Accor is in a good position to take advantage of distressed assets as a result of coronavirus", he told the paper.
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