Operate Accor reports Q1 revenue drop of 15.8%

That the COVID-19 pandemic has delivered a body blow to the hotel industry is not in question, but as first-quarter reports  (accorhotels stock)   are released we will start to see the full extent of the damage.

                              

Accor was up first, sharing that consolidated first-quarter 2020 revenue totaled €768 million, which was down 17 percent as reported and 15.8 percent like-for-like.  (accorhotels stock)  Revenue per available room fell 25.4 percent, reflecting the sharp deterioration in the environment due to the worldwide spread of the COVID-19 epidemic, first in Asia-Pacific (-33.7 percent) and then in other regions, including Europe (-23.2 percent) and North America (-22.2 percent).

That the COVID-19 pandemic has delivered a body blow to the hotel industry is not (accorhotels stock)    in question, but as first-quarter reports are released we will start to see the full extent of the damage.

Accor was up first, sharing that consolidated first-quarter 2020 revenue totaled €768 million, which was down 17 percent as reported and 15.8 percent like-for-like. Revenue per available room fell 25.4 percent, reflecting the sharp deterioration in (accorhotels stock)    the environment due to the worldwide spread of the COVID-19 epidemic, first in Asia-Pacific (-33.7 percent) and then in other regions, including Europe (-23.2 percent) and North America (-22.2 percent).'

                                 

M&F revenue was down by a sharp 31.2 percent like-for-like in Europe, reflecting a 23.2 percent deterioration in RevPAR.

• In France, RevPAR fell 22.4 percent in first-quarter 2020. Paris and the regional cities saw similar declines of -22.3 percent and -22.4 percent, respectively. The lockdown implemented since March 17 led to the temporary closure of more than 75 percent of Accor hotels in France.
• In the United Kingdom, RevPAR declined by 22.1 percent. London was more affected than the regional cities with RevPAR down 23.9 percent and 19.7 percent, respectively. Most hotels have been closed since March 25.
• In Germany, where protective measures were put in place on March 22,  (accorhotels stock)   the impact on RevPAR was similar, reflecting a 24.5 percent decline for the quarter.
• Spain, which went into lockdown on March 14, reported a 29 percent drop in RevPAR in the first quarter.
• In Asia-Pacific RevPAR was down 33.7 percent, reflecting the deterioration that began a month earlier than in Europe.
• In China, RevPAR fell 67.7 percent in the first-quarter 2020. The epicenter of the pandemic is still affected by COVID-19, but initial signs of an improvement can  (accorhotels stock)   be seen in the pick-up in occupancy rates and in the restaurant business. Average prices remain low as the rooms are mainly being used by medical personnel or for quarantine measures.
• In Australia, where COVID-19 has had a more limited impact, the decline in RevPAR was somewhat less pronounced at 18.2 percent. This decline was also mitigated by the hotels being used for quarantine, which had a positive short-term impact on RevPAR.
• In Middle East & Africa, RevPAR was down 21.4 percent. The trend was similar to Europe’s due to the closure of the holy cities since the end of February.
• RevPAR in North America, Central America & the Caribbean was affected by the closure of numerous hotels since mid-March due to the COVID-19 pandemic and was down 22.2 percent.

According to the report, the business has so far proven more resilient in South America, with a RevPAR decline of 11.2 percent. However, this resilience reflects the time lag in the spread of the pandemic.

The group continues to expand at a rapid pace. During Q1, Accor opened 58 (accorhotels stock)   hotels, representing nearly 8,000 rooms. At the end-March 2020, the Group’s pipeline was stable and comprised 1,202 hotels and 208,000 rooms, of which 76 percent in emerging markets.

Hotel Assets

                            

Revenue derived from the “Hotel Assets & Other” segment was down 13 percent like-for-like, reflecting the lesser impact of COVID-19 in Australia and the time lag in the spread of the pandemic in Brazil. The 20.4 percent decline in revenue  (accorhotels stock)   as reported was exacerbated by the sale of the Mövenpick leased hotels early March 2020.

At the end of March 2020, this segment, which includes owned and leased hotels, represented 167 hotels and 29,930 rooms.

New Businesses

New Businesses (concierge services, luxury home rentals, (accorhotels stock)   private sales for luxury hotel stays, and digital services for hotels) generated revenue of €32 million, down 13.8 percent like-for-like from €37 million in 2019. The decline was 13.3 percent as reported due to currency effects.