More than two thirds of Accor’s 5,000 hotels are expected to be closed within weeks due to the deepening impact of the global coronavirus lockdown.
The French hospitality giant has furloughed 75% of head office staff in an effort to save €60 million and cut a further €60 million of expenditure in response to the crisis.
Further costs in sales, marketing and IT are being “streamlined” to reflect lower revenues across the portfolio which stretches across 110 destinations.
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A €280 million dividend payment for 2019 has been withdrawn with €70 million diverted to support the group’s 300,000 staff, including hospital expenses.
Chief executive Sebastien Bazin is taking a 25% pay cut with the cash equivalent being contributed to the fund.
The firm’s asset-light transformation means that it has a strong balance sheet with more than €2.5 billion in cash and a revolving €1.2 billion credit facility.
The company said in a trading update: “While much uncertainty remains on the duration of this crisis, the group expects a severe impact on its 2020 performance but remains bullish on the long-term perspective of the hospitality industry, for Accor, its employees, its owners and shareholders.”
Bazin said: “As our industry is going through tough times, we have to make tough decisions but Accor has a strong balance sheet which will enable it to withstand this crisis and emerge with strength during the recovery period.
“I am confident that Accor will soon rediscover the road to growth.”