Accor furloughs staff and withdraws dividend amid COVID-19 crisis

Published on : Saturday, April 4, 2020

Leading hospitality company Accor has decided to withdraw a dividend payment of €280 million for the financial year 2019 due to the coronavirus pandemic. The company informed in a recent press statement that more than half its branded hotels across the globe are closed. Accor is also assuming that with the constant rise in coronavirus cases around the world, the number of closures is slated to rise over two thirds in the coming weeks.

 

 

The company said that the coronavirus outbreak has resulted in a virtual standstill of travel, dining, and entertainment. It also mentioned that the hospitality industry has also been which vastly affected our industry. Hence the abrupt deterioration of visitor demand, lower occupancy, and the critical situation have compelled the group to take drastic actions across its global operations.

 

 

Accor has also reduced schedules, furloughed three-quarters of its head office team, issued a travel ban for its staff and carried out a hiring freeze as a part of a more stringent set of actions. Sébastien Bazin, Chief Executive, Accor, said in a press brief that the company has decided to act in an immediate and meaningful way due to the urgency and the scale of the situation.

 

 

The company also reviewed recurring investment plans for 2020, resulting in a likely €60 million reduction in capital spending. It also launched the ‘ALL Heartist Fund’ after discussing the same with its key shareholders. Nearly 25% of the planned dividend of €70 million would be allocated to the fund.

 

 

This fund will financially support any of Accor’s 300,000 staff regarding any coronavirus related hospital expenses. The fund would be granted to employees who do not have social security or medical insurance. It would also seek to support furloughed employees or partners suffering great financial distress on case by case basis. Bazin added in his statement that through the impactful gesture, Accor wishes to express solidarity and gratitude to everyone who demonstrated selflessness and courage during the time of crisis.

 

 

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