[Update] The Covid 19 crisis impact the performance of tourism companies

5 min reading time

Published on 28/04/20 - Updated on 17/03/22

Pertes financières Covid 19

Falling activity, lack of visibility on the prospects for recovery... everything is working to undermine the performance of tourism professionals during the first 2020 quarter. Written April 21th, updated April 28th, May 12th.

22.6 percent RevPAR decrease for Hilton, development carries on

The American company declares no impact on its activities, except for APAC region, until March 2020. Hilton declares a $18 net income for the period as well as a $363 million EBITDA.
The company opened 8,100 new rooms worldwide developping it portofolio of 6,100 keys. 29,500 new rooms entered the pipeline onf the first 2020 quarter maintaining the strong developement wanted by the group's leadership.

Choice Hotels International : hotels remain open in the US

97% of domestic hotels remain open but this doesn't prevent the company from bad financial results as well as its competitors. EBITDA reaches $69.2 million$55.5 million net income for the first quarter.

Hotel open on the US soil reported a -15% RevPAR decrease for the period and 42 new properties were signed (47 in 2019).

1,300 corporate layoffs at Hyatt

The American company reports a 23% fees revenue decrease and a $35 million adjusted net loss. Inspite of all the saving measures taken, Hyatt Corporation makes announcements to preserve its long term durability.

“While parting ways with our colleagues is excruciating, we must be sensitive to commercial realities so we can continue to fulfill our purpose of care over the long term – through this pandemic and for what lies beyond. Our goal is to emerge from this crisis with strength, and ultimately position our business and our world-class teams for when the hospitality industry rebounds and when our guests and customers once again choose Hyatt.”Explains the President & CEO Mark Hoplamazian.

28% RevPAR decline for the company worldwide and a $86 million EBITDA. RevPAR declined by -22.5% in EMEA and South West Asia area, and it dropped by -48.0% in other Asia regions (Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia).

The company opened 1,820 rooms (12 properties) during the first 2020 quarter. 

The Spanish Meliá took a strong hit

The company declares a €14,2 Million EBITDA with a -€79,7 Million net loss. Following the current announced results, the company anticipates even worst incomes for April and May following travel restriction. Meliá's domestic market, Spain, has been strongly hit by the lockdown hotels being forced to close. Moreover, most of its activity is based on hotels and resorts which usually welcome mostly foreign customers.

-21.1% RevPAR in Americas, and -22.1% in the EMEA region.

IHG Group secures its financing

Its CEO, Keith Barr declares "Following a solid performance in the first two months of 2020, occupancy levels dropped to historic lows in March and April, as social distancing measures and travel restrictions came into effect around the world. Global RevPAR in the first quarter declined by 25%, including a 55% decline in March, and we anticipate April to be down by around 80%. In the US, our biggest market, our franchise portfolio of 3,750 mainstream hotels has seen lower levels of RevPAR decline than the industry, and as at the end of April we had ~90% of our estate open. Our business is also weighted towards non-urban markets that are less reliant on international inbound travel and large group meetings and events, which provides a level of resilience during this difficult period."

14,000 new rooms were signed during the first quarter (104 properties) while 6,000 were opening during the same period.

Debt deferral, bank loan or financing through the UK Covid Corporate Financing Facility (CCFF) for which the Bank of England has confirmed its eligibility. A total of £600 million is loaned to the British group.
IHG announces a 25% fall in RevPAR in the first quarter, including a 55% fall in March alone. Occupancy of the open portfolio is around 20%. 10% of the hotels in the United States are closed, 50% in the EMEAA region (Europe, Middle East, Africa, Asia) and the hotel portfolio in China is on the verge of reopening, with only 12 of the 470 properties still closed.

The European champion announces RevPAR losses amounting to 25% of its turnover

-25.4% of RevPAR in the first quarter following the closure of 62% of the group's properties. RevPAR fell by 62.6% in March, in line with the performance of European hotels. Revenue declined 15.8% on a like-for-like basis.

The Group reported a 22.4% decline in RevPAR in France in the first quarter.

Sébastien Bazin, CEO, remains optimistic about the group's future, counting on the diversity of its activities to maintain its financial health until the recovery takes hold. "The Group is in a strong position to address the current situation and we are taking aggressive measures to adapt our organization. Accor’s recent transformation has left the Group with a robust balance sheet which will enable it to absorb the economic consequences of this crisis in the coming quarters."

Decrease in revenues for Covivio 

The hotel business lost 10% of its hotel rental revenues in the first quarter. Nevertheless, the Group has a positive balance sheet that will enable it to remain solid in the European market. Covivio is contributing to the collective effort to combat the pandemic.

Compagnie des Alpes is feeling the impact of the pandemic

After the premature closure of its 11 ski resorts, the group was unable to open its amusement parks in April due to lockdown. The company expects to lose 120 million euros in revenue by the end of June, corresponding to the turnover generated by its parks between the opening and the end of June 2019. Without a possible reopening before the beginning of July, this is a quarter less turnover than the group anticipates.

Pierre & Vacances Center Parcs had a positive start to the year

Over its first half of activity (closing in September 2020), the group posted a 0.7% growth in turnover despite the Corona Virus crisis. The shortfall caused by the pandemic is estimated at 31 million euros (15 million euros for the Pierre & Vacances Tourisme Europe division and 16 million euros for the Center Parcs Europe division).

The Indian company OYO announces new savings

After disposing of part of its staff, the group announces a 25% salary cut for employees still hired between April and July 2020. Like its counterparts in the tourism sector, the Indian is seeking to limit its expenses to cope with the lack of income.

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