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According to Sébastien Bazin, Accor chairman and CEO, it will not be until the end of 2021 or early 2022 that the group’s operations return to the level of 2019.
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Revenues for Accor per available room at its 4,200 active hotels went down 60 per cent in the first half of 2020, resulting in a net loss of $1.75 billion for the entire system as of last August. Its rivals, including Marriott and Hyatt, suffered the same fate as Hyatt had to cut 1,300 employees worldwide, while the representatives of the world’s largest hotel system Marriott stated that the effect of the pandemic on business operations is much more serious than both the terrorist attacks on the US in 2001 and the 2008 financial crisis combined.
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Hilton Hotels also faced an unprecedented crisis in its 101-year history when it was forced to lay off 22 per cent of its global corporate staff last year. The move follows the closure of 166 TUI shops announced in July. TUI Group meanwhile confirmed it will close a further 48 shops across the UK. The group also considered selling parts of its 49-per-cent stake in the Spanish hotel chain TUI Hotels & Resorts to pay off debts after reporting an operating loss of $1.3 billion in the third quarter of last year. Within just three months of the outbreak in Europe in the middle of last year, the travel slump wiped out TUI’s revenues and strained its balance sheet as it burned through around $705 million a month to maintain operations.
Hospitality industry and threat of new entrants series#
IHG is not the only victim of the pandemic, as a series of other large hotel groups such as Accor, Marriott, TUI Group, and Hilton has been in the same situation. In 2020, Sheraton Hanoi’s revenues plummeted severely. However, the revenue generated was still far behind the $44 million earned in 2007. The hotel generated total revenues of $19.7 million in 2019 due to growth in the food and beverage business. Such a negative situation also affected another BHR hotel – the Sheraton Hanoi. Even before it was hit by the pandemic, the hotel’s poor business performance caused Malaysian owner Berjaya Land Berhad (BHR) to quickly divest in 2019. The latter, although known as a 5-star hotel with the most beautiful location and architecture in Hanoi, has been in a state of loss for many years. In Vietnam, although there is yet no report on the business operations of the 13 IHG hotels – with more than half under the InterContinental brand – the decline in revenues likely was a result of booking channels like Agoda and offering discounts of up to 40-50 per cent on room rates at famous resorts and hotels such as the InterContinental Danang Sun Peninsula Resort and InterContinental Hanoi Westlake. However, we see more meaningful progress towards recovery, lifted restrictions, and an acceleration in economic activity”, said Keith Barr, chief executive at IHG Hotels & Resorts. This year has begun with many of the same challenges. “Last year was the most challenging in our history, with COVID-19 heavily impacting demand across our industry. However, the pandemic has dealt a serious blow to the group after IHG announced a loss of around $153 million for 2020. Owning 14 hotel brands and nearly 6,000 properties around the world, InterContinental Hotels Group (IHG) is currently one of the 10 largest in the world. Restrictions continue to challenge hotel industry