Hotel group Accor to cut 1,000 jobs after coronavirus loss
(Reuters) - Europe's biggest hotel group Accor <ACCP.PA> plans to cut 1,000 jobs as part of a 200 million euro (180.57 million pounds) 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 on Tuesday 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 around 300 million euros to implement this plan, CFO Jean-Jacques Morin said after Accor reported that it swung to a 227 million euro first-half loss before interest, tax, depreciation and amortisation compared to EBITDA of 375 million euros 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, could not yet specify where the job cuts would be, he said. He said 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 U.N. study forecasts, based on the most pessimistic scenario for the industry, with lockdown measures lasting 12 months.
However, Accor said that 81% of its hotels were now open and that it had a solid liquidity position of more than 4 billion euros at the end of June.
In an interview with the Financial Times, Accor chief Executive Sebastien Bazin said Accor is closing in on a deal to take over the contracts of about 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.
(Reporting by Charles Regnier; Editing by Edmund Blair, Alexander Smith and Emelia Sithole-Matarise)
