Accor Records 62.8% RevPAR Decline, Opens 57 Hotels in Q3

PARIS—Accor revealed that its group revenue in the third quarter of 2020, ended Sept. 30, came in at 329 million euros ($389.5 million), down by 68.7% and by 63.7% like-for-like (LFL) due to the effects of the health crisis. RevPAR fell by 62.8%, a significant sequential improvement in the wake of a difficult second quarter (RevPAR down by 88.2%). This improvement reflects a recovery in business in all regions, and most especially in Europe during the summer season. However, the downturn in leisure customers, in addition to the introduction of new restrictions after the end of August, pushed the recovery down in September.

Accor opened 57 hotels during Q3, or 7,800 rooms, which are in line with those of the first quarter (58 hotels, and 8,000 rooms). By the end of September, the group was operating 750,135 rooms (5,121 hotels), with a pipeline of 208,000 rooms (1,192 hotels) running at 75% in emerging markets. By the end of September, 90% of the Group’s hotels were open for business, or more than 4,600 units.

“Our performances during the third quarter point to a marked recovery of business during the summer season. The worst of the crisis is now behind us, but our main markets are still substantially affected by the measures rolled out to combat the health crisis. Only China reports solid performances and should swiftly recover its activity level pre-crisis,” said Sébastien Bazin, chairman/CEO of Accor. “Against this still uncertain context, discipline, adaptability and cost control are critical. We keep transforming our organizations to make the group even more efficient, more agile, and focused on the most profitable and promising markets and segments. We are also deploying additional sources of revenue, in our hotels and in our loyalty program. These efforts will help us benefit faster from recovery and pursue our ambitious development of the group.”

HotelServices
HotelServices, which combines fees for management & franchise (M&F) and services for owners, generated revenue of 224 million euros ($265 million), down by 69% like-for-like. This points to the deterioration of RevPAR due to the impact of the COVID-19 epidemic and health restrictions taken by governments worldwide.

Revenue of fees from M&F stood at 72 million euros ($85.2 million), down by 72.4% LFL, with a considerable fall in fees based on hotels’ operating margins (incentive fees) in management contracts.

The group’s RevPAR dropped by an overall 62.8% during the third quarter.

In Europe, M&F revenue fell by 69.6% LFL, pointing to a 56.7% overall fall in RevPAR across all segments.

  • In France, RevPAR was down by 44.6% LFL in the third quarter, a net improvement after a second quarter which lost 88.6%. This performance was the outcome of a recovery in leisure customers in provinces during the summer season (RevPAR down by 27.6%), while Greater Paris (RevPAR down by 72.2%) was affected by the absence of international customers.
  • In the U.K., RevPAR fell by 79.8%. Although less impacted, trends between London (-91.8%) and provinces (-67.2%) were comparable to the French figures. This reflects flows of national tourists in a country where border-crossing is still subject to severe restrictions.
  • In Germany, RevPAR was down by 60.9%. Despite lockdown measures ending earlier than other European countries, RevPAR is still affected by a huge reduction in business customers, particularly from abroad.
  • In Spain, RevPAR fell by 77.2% in the third quarter.

Asia-Pacific M&F revenue was down by 70.8% LFL, affected by RevPAR falling by 58.8%.

  • In China, the third quarter (RevPAR fell by 29.4%) confirms the recovery of business observed in the second quarter of the year. This improvement continues month after month (September’s RevPAR was down by 16.8%), and the “golden week” vacation after the national holiday season (first week in October) confirms the potential of domestic tourism.
  • In Australia, RevPAR fell by 62.7% in the third quarter. Business is restricted to domestic customers and hotel quarantines decreed by the government, since the country’s borders are still closed.

In Africa & Middle East, M&F revenue fell by 73.9% on the basis of a 69.9% RevPAR reduction due to border closures.

In North America, Central America & Caribbean, M&F revenue was down by 80.0%, in line with an 83.4% fall in RevPAR during the third quarter. Plunging fees based on hotels’ operating margins (incentive fees) were partially offset by a relatively sound performance by other revenues from M&F contracts.

Finally, in South America, M&F revenue fell by 87.2% on the basis of an 80.6% reduction in RevPAR, although this is gradually improving.

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