Executives at French hotel company Accor said they are seeing signs of recovery and are ready to pounce on the expected rebound, but they are also responding to the seismic wobble in the industry by continuing efforts in conservation, sustainability and human resources.

Speaking at a presentation of Accor's half-year 2021 earnings, CEO and chairman Sébastien Bazin said the company had 3.4 billion euros ($4 billion) of liquidity as of the end of the second quarter.

Jean-Jacques Morin, Accor's chief financial officer and deputy CEO, said revenue in the first six months of 2021 was 824 million euros, which in like-for-like terms is a 6% decline from 2020 and a 53% decline from 2019.

Monthly revenue-per-available-room performance is moving in the right direction, but still down each month in the second quarter compared to 2019, Bazin said.

Morin said Accor's guidance until the end of this year is every percentage drop in RevPAR equals approximately an 18-million-euro drop in earnings before interest, taxes, depreciation and amortization, and that average monthly cash burn came in at just below 40 million euros.

The first half of 2021 saw an EBITDA loss of 120 million euros, approximately a 58% improvement from the same period in 2020, while cash burn per month has been halved of late, he added.

Morin said the challenging macroeconomic environment resulted in Accor's RevPAR down 60.4% across the first two quarters of 2021 compared to 2019. Across Accor's hotel portfolio, both the luxury and upscale and economy segments posted 33.5% occupancy, while midscale hotels achieved 33.8% occupancy. Average daily rate across those segments fell more sharply in Accor's economy segment, down 20.9% to 43 euros than it did in the company's luxury and upscale sector, where ADR declined 18.4% to 115 euros.

Improvements have been unalike in different markets, Morin said, and confidence is returning in the countries that are beginning to reopen.

Bazin pointed to the United Kingdom reopening inbound travel to all visitors who can prove they have been double-vaccinated, “with the exception of France. I do not know why that is.”

“Back in June, 87% of countries were closed,” he said. “The two largest markets, U.S. and China, are still with quasi borders closed, but Australia it is hoped is to reopen by mid-August.”

He said 93% of Accor's hotels have reopened, when only 87% were open in April.

Bazin said Accor and the hotel industry “still is in muddy waters as far as navigating in different countries and across different rules. … but for the last three months in a row we’ve seen improvements in RevPAR of about 500 basis percentage points.”

He added the recovery is at different stages in various global markets.

“We are ready for the rebound. Germany is better than we expected, as is Brazil, with now a fast vaccination rollout. … Bad news, and we have to learn to be patient, in Southeast Asia, which relies on international travel, and there are some poor markets in South America, such as Argentina,” Bazin said.

He said Accor's hotels in France and the United Kingdom saw RevPAR improvements as the second quarter neared its end. Elsewhere, Germany is proving more difficult, and while RevPAR in Asia is showing better performance, down 38.5% compared to 2019.

Morin said global revenue is being driven by Australian performance, which he said benefited from its large domestic market and controlled borders, and Brazilian numbers were being protected by its hotels’ variable lease structure.

Accor's net profit for the first half of 2021 was 67 million euros, which Bazin and Morin said was helped by 102 million euros from the sales of commercial papers and 239 million euros from a sale of a 1.5% stake in Huazhu. In the same period in 2020, Accor posted a loss of 1.5 billion euros.

Accor continues to sign and open hotels, and in the first six months of 2021, the company showed a 1.9% increase in network size, opening 121 hotels comprising approximately 15,000 rooms. Through the end of June, Accor's global portfolio totaled 762,000 rooms across 5,199 hotels, and the company's pipeline stood at 211,000 rooms in more than 1,200 hotels in development.

On July 20, Accor opened the 141-room Mercure Rhodes Alexia, which is the Mercure brand’s debut on the Greek island. Accor also announced the signing of the 112-room Artista San Antonio, Texas, with local developer Harris Bay, which is due to open in July 2023 under its lifestyle brand Morgans Originals.

Fielding an analyst question on the modest network-size growth, Bazin said “90% of our developers in Asia could not travel, so they could not go and sign.

“If you are investing 100 million euros over 25 years, you would want to be there,” he added.

Industrywide, hoteliers are hopeful that group business will return soon, but Bazin said it was too early to state expectations for business travel.

“We have good visibility for the next eight weeks, but low visibility for business and [meetings, incentives, conventions and expositions] for October, November, December. We are seeing calls for groups of 30 to 80 persons in certain markets,” he said.

Bazin emphasized that people that are behind the firm’s 55 years of operations, and while it is important to position Accor to respond to the improving trading conditions, leveraging its loyalty program and implementing cost savings, the human element is what will fuel the company's progress.

As of July 28, 88,000 staff members have received help from the firm’s Heartist program with average payments of $355, Bazin said. He added approximately 1,000 management positions out of 7,000 have been eliminated, with French management being the last part of that due to a slower legal process. He also said that by 2022, 30% of Accor's executive committee and 40% of its executive team will be women.

Bazin also set a goal that all single-use plastic will be phased out by the company by 2022, and the firm’s carbon footprint will be steadily reduced by 2030.

As of press time, AccorHotels stock was trading at 30.44 euros per share, up 1.5% year over year. The Euronext Paris Stock Exchange was up 6% over the same period.