According to an announcement, the 70 million euros initiative has been withdrawn from the Accor’s Board of Directors proposal for a 2019 dividend payment of 280 million euros. The decision was reached after consultation with the Group’s main shareholders JinJiang International, Qatar Investment Authority, Kingdom Holding Company and Harris Associates.
Accor’s “ALL Heartist Fund” will operate as a “Covid-19 special purpose vehicle” and assist the Group’s 300,000 employees for their Covid-19-related hospital expenses and for those who do not have social security or medical insurance. The fund will also assist furloughed employees suffering great financial distress and individual partners facing financial difficulty.
In addition, the Group will further deploy its solidarity initiatives to support front-line healthcare professionals and non-profit organizations.
“This initiative 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,” Accor said.
According to the Group, the initiative received unanimous support from its Board members, who collectively decided to reduce their attendance fees by 20 percent to the benefit of the “ALL Heartist Fund”. Additionally, Sebastien Bazin, Chairman and CEO of Accor, will forego 25 percent of its compensation during the crisis. The cash equivalent will also be contributed to the fund.
Today more than half Accor branded hotels worldwide are closed and, according to the company’s announcement, likely over two thirds in the coming weeks.
The Group’s mitigation measures were implemented as early as February and include travel ban, hiring freeze, reduced schedules and /or furloughing for 75 percent of global head office teams for Q2, resulting in a minimum 60 million euros reduction in general and administrative (G&A) expenses for 2020.
Accor also reviewed its recurring investment plan for 2020 resulting in a 60 million euros reduction in capital expenditures.
The Group is further streamlining all other costs (sales, marketing, IT), in line with lower systemwide revenues.
While much uncertainty remains on the duration of this crisis, the Group said it expects a severe impact on its 2020 performance but remains confident on the long-term perspective of the hospitality industry, for Accor, its employees, its owners and shareholders.
“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,” Accor Chairman and CEO Sebastien Bazin said.
Accor offers experiences in 5,000 hotels and residences across 110 destinations.