Impact of COVID-19 on Accor and its response: Coronavirus (COVID-19) Case Study
COVID-19, commonly referred to as the Coronavirus, is dominating headlines the world over. The travel & tourism sector is suffering significant disruption and the lodging industry is very much impacted.
Accor announced a business travel ban for all its staff and a hiring freeze. 75% of global head office teams have been furloughed for Q2. This and other related measures have resulted in a €60m reduction in capital expenditures. Despite all this, the group’s leadership remains positive about Accor’s future, especially given its recent asset-light transformation which resulted in more than €2.5bn in cash on hand and an undrawn revolving credit facility of €1.2bn. It reported €768 million in revenue. This is down 17% from the same time last year and 15.8% like-for-like.
Accor has opened its hotels in China after 200 were forced to close. China is on the road to recovery, emphasizing why Accor should begin marketing this destination. Domestic travel in most markets will recover before international travel. GlobalData forecasts 1.2 billion domestic trips in 2021 will be VFR. Accor can utilize this to its advantage and market heavily to this in efforts to increase bookings and grow cash flow.
Accor has introduced the ‘ALL Safe Officer’ program, it will see every hotel appoint a health and safety officer who will ensure cleaning and hygiene protocols are implemented to the highest standards. Many travelers from a range of source markets usually prefer a product or service that showcases a quality label or certificate as it demonstrates that it is of the highest quality. Accor must show it operates a ‘COVID safe’ environment and this means it will likely be able to attract more guests than its local competitors.
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