An unprecedented crisis calls for an exceptional situation: the two thirds of Accor hotels will be closed in the coming weeks. Already, with a large proportion of the world's population confined, almost half of the French group's 5,000 or so establishments worldwide have closed their doors. The current crisis has imposed other measures to mitigate its impact on the Group's finances, including short-time working or technical lay-offs for three quarters of head office employees worldwide, in addition to a recruitment freeze and a travel ban. All this for a cost savings of 60 million eurosIn addition, Accor has announced that it will reduce its operating expenses by €1 billion, while expenses will be reduced by the same amount for the 2020 financial year. This is despite the fact that Accor explains that its balance sheet remains strong, with more than €2.5 billion in available cash and an undrawn revolving credit line of €1.2 billion.
Another key decision taken by Accor's Board of Directors was not to pay the planned dividend of €280 million for the 2019 financial year. At the same time, 25% of the planned dividend, i.e. 70 million euros, will be devoted to the launch of the "ALL Heartist Fund. This fund is intended to cover the hospitalisation costs associated with Covid-19 for employees who do not have social security cover, to assist employees in serious financial difficulty and to support solidarity initiatives. in support of healthcare workers and charities on the front line of the crisis. In addition, the Group's CEO, Sébastien Bazin, is waiving 25% of his remuneration for the duration of the crisis, with the equivalent amount also being contributed to the fund. "We wanted to make a strong gesture of solidarity and gratitude to all those who are showing such courage and self-sacrifice in this crisis. On behalf of the Board of Directors, I would like to thank the Group's main shareholders, without whom the creation of the ALL Heartist Fund would not have been possible. "said Sébastien Bazin.
Other major hotel groups have followed suit. Hyatt, which is seeing a large part of its workforce temporarily laid off until 31 May, has taken measures to finance the benefits coverage for a period of up to two months. At the same time, the American group is in the process of creating a support fund called Hyatt Care, which will be funded as an initial contribution by the salary cuts of its management team. CEO Mark Hoplamazian and Chairman Tom Pritzker are giving up 100 % of their salaries, and Hyatt's senior management team will take a 50 % pay cut until the end of May.
Hilton has set up an assistance fund to help group employees and members of their families affected by the virus. Elimination of non-essential expenditure, suspension of share buy-backs and payment of dividends other than those previously declared, waiver of salary for the rest of 2020 from its CEO, Christopher Nassetta: the hotel industry is oscillating between cost-cutting and generosity.
