The property company said it was experiencing difficulties with its hotel rental business in Europe. This business, which accounted for 18% of its revenue in 2019, has already seen a cumulative decline of 11% in its revenue per available room since the beginning of 2020.
Owner of 333 assets across Europe, Covivio has a well-developed network on the continent, a network that has recently been further strengthened with the acquisition of a portfolio of 32 Accor hotels between France and Belgium last July and the announcement a few months ago of a development in the Polish hotel market with its long-time partner B&B Hotels.
However, this business is currently under pressure as most Schengen governments are closing their borders and imposing total containment on their populations in an attempt to curb the Coronavirus pandemic on European soil.
While the hotel business accounted for 121 million euros last year, 2020 revenues are now threatened by the Covid-19 crisis, which is having a major impact on the hotel industry in Europe. For the moment, the crisis has had a "direct impact on the variable part" at the rate of 9% of total revenues. This variable part would be made up of "hotels rented to Accor in France (5%) and hotels in France and Germany (4%)". As a result, RevPAR has already declined by 11% since the beginning of the year, compared with the same period last year. A half-yearly report will give the extent of the impact of this crisis next July.