Friday 5 June 2020

Accor launches fund to assist employees during Covid-19 crisis

PARIS, April 6, 2020

French hotel group Accor has announced the launch of an “ALL Heartist Fund” to assist its employees and offer support to partners.
After consulting with the group’s main shareholders, JinJiang International, Qatar Investment Authority, Kingdom Holding Company and Harris Associates, Accor has decided to allocate 25 per cent of the planned dividend (€70 million/$75.6 million) to the launch of the “ ALL Heartist Fund”, a Covid-19 special purpose vehicle. This fund will typically assist:
1. The group’s 300,000 employees, pledging to pay for their Covid-19-related hospital expenses, for those who do not have social security or medical insurance,
2. On a case by case basis, furloughed employees suffering great financial distress
3. On a case by case basis, individual partners facing financial difficulty
"This fund reflects the ambition of the Group and its shareholders to provide a meaningful and significant contribution to global solidarity initiatives to address the current health crisis while planning for future needs. This decision has received unanimous support from the Board members, who collectively decided to reduce their attendance fees by 20 per cent to the benefit of the “ALL Heartist Fund”. Additionally, Sebastien Bazin, Chairman and CEO of Accor, will forego 25 per cent of his compensation during the crisis. The cash equivalent will also be contributed to the Fund," a statement from the group read.
Sébastien Bazin, chairman and CEO of Accor, commented: “In light of the urgency and the scale of the situation, we have decided to act in an immediate and meaningful way, in the spirit of our values and commitments. Through this impactful gesture, we wish to express our solidarity and gratitude to all those demonstrating courage and selflessness during this crisis. On behalf of the Board, I would like to thank the Group’s main shareholders. Without them, the “ALL Heartist Fund” would not have been possible."
"I also want to pay a special tribute to the Accor teams around the world. They are facing the current crisis with admirable courage, dedication and professionalism. As our industry is going through tough times, we have to make tough decisions, but Accor has a strong balance sheet which will enable it to withstand this crisis and emerge with strength during the recovery period. I am confident that Accor will soon rediscover the road to growth,” he said.
The company’s mitigation measures, in the light of the Covid-19 outbreak, began as early as February, and included:
- Travel ban, hiring freeze, reduced schedules and/or furloughing for 75 per cent of global head office teams for Q2, resulting in a minimum €60 million ($64.8 million) reduction in G&A for 2020
- Reviewed recurring investment plan for 2020 resulting in a €60 million reduction in capital expenditures.
The Group is further streamlining all other costs (e.g. sales, marketing, IT), in line with lower system wide revenues.
"Thanks to its recent asset-light transformation and cash preservation strategy, Accor can today rely on a strong balance sheet, with more than €2.5 billion ($2.7 billion) in cash on hand and an undrawn revolving credit facility of €1.2 billion ($1.29 billion). While much uncertainty remains on the duration of this crisis, the Group expects a severe impact on its 2020 performance but remains bullish on the long-term perspective of the hospitality industry, for Accor, its employees, its owners and shareholders," the statement said. - TradeArabia News Service


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