Hello, and welcome to the Accor Q1 Analysts Conference Call. My name is Lydia, and I will be your coordinator for today's event. Please note, this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, we will have an opportunity for live questions. You may register by pressing star one on your telephone keypad. You can do this at any time. I will now hand over to your host, Jean-Jacques Morin, General Director and Financial Director, to begin today's conference. Thank you.
Before we start the presentation and for the sake of clarity, the RevPAR variation that we will provide are versus Q1 2019, and this was done in order to ease the understanding of the performance and notably to avoid the defects, so we took 2019 as being a normative year. As for revenue figures, we provide both variation versus Q1 2020 and Q1 2019 in the document, so you have them as references. Without further delays, let's start with the highlights of the quarter that you will find on page three, so the Q1 2021 business highlights reflects, as anticipated, a context similar to Q4 2020. The RevPAR was down 64% over the quarter versus 2019. The last 12 months' net organic system growth was at 1.4%, and I'll give you more detail shortly.
And all of that translated into a group revenue decrease of 57% versus 2019 on a like-for-like basis to reach a level of EUR 361 million. The second element that we would like to highlight is the sensitivity. And as for sensitivity, we confirm today what was communicated during the year-end result call back in February. The EBITDA sensitivity is confirmed to be slightly below EUR 18 million per RevPAR point for the full year of 2021. And the monthly cash burn is, in average, over financial year 2021, something below EUR 40 million. The last element on this highlight that we want to stress is the Accor balance sheet situation, which is very strong. And we have, as of the end of March, a liquidity of EUR 3.6 billion.
You have, by the way, the key cash flow of Q1 on the slide, and you may recall that we've discussed each of them during the presentation back in February. If you move to the next page, before we dive into the figures, we would like to discuss with you the revised segment reporting that we will be using going forward. As part of the reset plan, we've put in place, you may recall, a delayered management organization. So we've adapted our segment reporting in line with this new organization, as is required by the IFRS 8 accounting standard. The changes are summarized on the page facing you. So you've got Europe, which is split between South Europe, which includes France, and North Europe, which includes the U.K. and Germany. You've got Asia-Pacific, which in fact remains essentially the same, with Pacific, Southeast Asia, and Greater China.
You've got MEA, which is renamed to IMEAT, as it now encompasses Turkey, which was previously in Europe, and India, which was previously in Asia-Pacific. North America and South America will be reported as a combined Americas segment. Holding and Interco remain unchanged, and the hotel asset and other will now include the new businesses. For the sake of clarity, again, we provided under the previous reporting format for Q1 2021, plus the historical figures under the new format, all of that in appendix. You have everything in order to build your models. Moving on to page five, we move now into the Q1 2021 RevPAR by geography with the segments I was just describing to you. Overall, the Q1 2021 RevPAR decreased by 64% versus Q1 2019.
Q1 was affected by the emergence of the U.K. variant, which is, as you all know, significantly more transmissible. It impacted notably Europe, where the variant accounts for more than 50% of the COVID cases, and this is notably true in France and in Germany. Going a little bit more into Europe, we've got two different patterns as the government reacted differently to the COVID crisis over Q1. South Europe proves to be more resilient and posted -63%, as there was in fact no lockdown in France over Q1. The RevPAR was down 61% in France. The province was, just like last year, stronger, as it is driven by domestic business guests, whereas in fact, Paris is much more international, as we all know. The third lockdown in France started on April 6, and is foreseen to last until mid-May.
As for Northern Europe, we have a RevPAR which is significantly worse at - 82%, and this reflects the continued lockdown over Q1 in the U.K. and Germany. In fact, the lockdown started back in November. In both countries, the RevPAR is to the tune of 87%. The lockdown started easing in March, and the easing is planned to continue over Q2. As you may know, in the U.K. now, the pubs have reopened in the month of April, and this is supposed to continue with openings of bed and accommodation in May, so all of this dynamic is ongoing. If we move now to Asia-Pacific, the RevPAR ends up being down 55% versus Q1 2019 again. Pacific was good at - 45%, benefiting from eased restrictions just in time for the summer break.
Our leisure destination on the Gold Coast, which is notably where Mantra is, fully benefited from this easing of restrictions and the good weather. In the CBD, in the Central Business District, with cities like Sydney and Melbourne, the situation was not as rosy, and in fact, the business was largely driven by quarantine business. If you move to Greater China, Greater China saw a blip in its recovery trend, a very nice and good recovery trend that we saw last year, and Q1 was in fact down to -43%. This was due to resurgence of the COVID in January and February at the time of Chinese New Year in big cities like Shanghai and also in the Hebei region, and the good news is that since then, the RevPAR has steadily recovered, and we were at -30% in March.
So our performance is in fact very much, again, like the one of the Chinese market. Southeast Asia suffered from its strong reliance on international travel, and the RevPAR is - 72%. In countries which are part of Southeast Asia, like Thailand, Vietnam, Singapore, 80% of the business is in fact international, and so they really take the heat here. Moving now to IMEAT, the RevPAR ends up being down 51% in Q1 2021 versus Q1 2019. Dubai, where the borders and restaurants were open, saw a strong inbound of tourism, and notably European tourism. That region should see a stronger H2 as the Hajj, which is the pilgrimage to Saudi, will take place in July as it will be open to immunized pilgrims. And the other important event in the region is the Expo 2020 in Dubai, which is now officially slated for October.
These are two elements that are going to help the second part of the year in Middle East and Africa. Now, moving to the Americas, the Americas showed a slight improvement at -73%, but we've got a much different picture between NCAC, so North America, and South America. North America improved to -76%, and there is a strong dynamic going on right now in the U.S. As you know, the U.S. government since the beginning of the year has been extremely efficiently putting in place their vaccination plan and in fact smashing it. They've been doing extremely good, and you see that in the numbers with occupancy rate that have steadily increased, and we see that in the hotel that we've got in North America. I'm talking the U.S.A.
In fact, when we look at the last four weeks, we have seen an increase of 40% of the booking before if you compare it to the previous four weeks. So just in the last four weeks, it's a 40% increase over the previous four weeks, so significant. South America is a different story. It was improving, and now it's not anymore improving because the country, which is essentially driven by Brazil, is plagued with various variants which are quite virulent, quite strong. And so that's not good for South America. I am moving now to the next page, which gives you a picture of our network. I told you that our net system growth was 1.4% over the last 12 months, so it's a last 12 months metric.
To be quoted here is the fact that as it is a last 12 months metric, you've got the effect of the very low Q2 2020. So in Q2 2020, we were at the crisis bottom, and so the openings were very low, and that impacts the 12 months average. Despite that number, we reiterate our overall target at 3%-4% for the year, as it is what we have in our confirmed opening plans. In fact, in Q1, we opened 7,000 rooms, and 7,000 rooms is a number which is very much comparable to what we did in Q1 2020 or in Q1 2019. And complementarily to that, the churn remained very much under control, very much in line with what we had as numbers for the two previous years. So there is really nothing here which is dissonant, which is different.
Without surprise, Asia-Pacific, and more specifically China, was the main net system growth driver, just like it has been for the last two years, as the country is at the forefront of the recovery of RevPAR in the world. To be more specific, Huazhu Group delivered 2,400, 2.4K rooms out of the 7,000 I was mentioning for the group. That is about 30% of the total. The pipeline slightly receded by 1,000 rooms because there was a little bit of slow signing over the quarter. The conversion accounted for 50% of the opening in Q1 2020, and again, we're consistent with what we saw historically. They should remain a growth driver for financial year 2021. If we move to the next page, which gives you a breakdown of the revenue by segment, Accor reached EUR 361 million in Q1 2020, which is down 57% on a like-for-like basis versus 2019.
The variance between the reported decrease and the like-for-like is essentially explained by the sale of the Mövenpick lease portfolio, which occurred back in March 2020. As far as the hotel service segment is concerned, the revenue was down 64% on a like-for-like basis. This is, again, fully in line with the 64% RevPAR drop that we had mentioned before. And just to give you more granularity, you've got M&F that I will detail on the next page, and which is down 69%. And you've got the remainder, which is the service to owners, which includes sales, marketing, distribution, and loyalty, which is down 60%. So the revenue decline was partially mitigated by lower burn of loyalty points in line with the drop of activity. As for hotel asset and other, the revenue was down by 44% on a like-for-like basis versus 2019.
This segment performance is better than hotel services, and this is due to the large Australian exposure of hotel asset and other. The Mantra activity benefited from leisure demand in holiday destination, as I was saying before. And to be quoted too is the fact that on new businesses, which is now part of that segment, you had differentiated performance, as you would expect, between the business-related travel activity, just like onefinestay, whose in fact evolution is very much in line with what we see in our hotel business and the digital services like D-EDGE, which are doing much better. So that's for the revenue split by segment, just focusing on management and franchise revenue. And you've got it on page eight, two points that I would like to emphasize. First off, the Q1 2021 revenue decreased by 61%, 69%, sorry, on the back of 64%.
This is no surprise, as you certainly recall, that there is a distortion coming from the impact of the incentives in management contracts. If you go and look at it by geography, you will see that this is generally true, except for North America and North Europe, where we had some positive one-off income, and notably, you've got things like termination, which are increasing, in fact, our revenue and obviously not changing the RevPAR. So this is the kind of little things that explain the small numbers that we are discussing here because we are discussing small numbers. I'd like to conclude on some closing remarks which are important. I mean, first off here, the results are the results, but there is no surprise.
When you look at what the COVID situation is for each of the geographies and the business we're in, we're in fact performing exactly in line with that spread of geography, and in reality, looking at our performance in terms of RGI, in many, many places, we're doing better than competition. We continue to control what we can control. I mean, the RevPAR remains something difficult to forecast. Every day is another day. You've got new variants, you've got new vaccine, and those vaccines get stopped, and then they get relaunched, so life continues to be interesting, but what we do is on what we control. We do it as rigorously as we can, and this is very true for the reset cost-saving plan. We are progressing exactly per plan, exactly on time. 90% of the account reduction is now in place.
We've reduced the level of contractor by 50% versus what we historically have been consuming. We've been, or we are in the midst of decommissioning 20% of our IT applications. And out of the 7,000 tasks that some of you may recall, we discussed back in July, 1,000 of them are either being eliminated or reduced in frequency. So that's why we will deliver the EUR 200 million that we had discussed back in July 2020. The third point, which is also important that I already covered, is that the group has ample liquidity. But despite having ample liquidity, we just make sure that we manage it and preserve it properly. And so that's an important point also in controlling the controllable. The last point, which is more an opening point, I think Q1 demonstrates the acceleration of several efficient vaccine rollouts throughout the world.
This is obviously excellent news for our business. I'll take as an illustration of it what happened this week, where the EU has been pushing forward, has been agreeing a Digital Green Certificate initiative so that you've got elements on the health situation of every individual, which obviously is a key element at restoring confidence and having people travel and consume and us having a very good business. They are also now disclosing or talking of a Herd Immunity for Europe for summer. Things are moving ahead. This bodes particularly well for a strong rebound of leisure demand, notably in Europe as summer is coming up. Q2 shouldn't be a miracle, but from the months of June and the summer, you should see all the effect of what we've been describing in terms of the confinement being released and then the vaccine being significantly accelerating.
And the situation, just like the one that you've got currently in Israel, should be able to be replicated to other countries. And this is obviously the way forward. Thank you for your attention, and I'm ready to take your questions.
Excellent. If you would like to ask a live question on today's call, please press Star 1 on your telephone keypad, and you will be prompted for your turn. If you wish to resend your question, please press Star 2. We have our first question from Bilal Aziz of UBS. When you're ready, please go ahead.
Good evening, everyone, and thank you very much for taking my questions. Just three from my side, please. Can you firstly let us know what level of incentive fees you actually booked into the quarter, please?
Then just the second one on the net system growth, you still flagged an ambition to get to 3%-4% for the year. Perhaps you could just talk us through the building blocks for that between conversions, gross additions, and removals, please. And very finally, you've given clear guidance on the EUR 70 million cost savings you expect for this year. What's the phasing of that in the first half versus the second half? And any government help you also expect in the first half, please? Thank you.
Yeah. Okay. On the incentive, the level of incentive that was booked in Q1 is very much in line with the level of incentive that you booked over the full year of 2020, so about 15% of the management and franchise fees that we've been recognizing.
So just to and that, again, should grow with time, but it's a function of RevPAR recovering, as you know. On net system growth, yeah, the point I was trying to make on net system growth is that the numbers of openings and the numbers of hotel being churned is, in fact, no different in Q1 this year than it was in Q1 last year, which was more or less a normal Q1 and which was, again, the same number in Q1 2019. So really, we are on the same kind of numbers. As we are looking at a 12-month average, and as you've got Q2, which is very weak, the number is low.
But if we look at what we've got for the rest of the year, and to answer some of your specific points, the churn, which is assumed, is not much different than the churn that we've been experiencing over last year, which, again, was very much consistent with the churn that we've been experiencing over the last previous year. So we don't see that changing. By the way, just a statistic on this one. If you look at the number of companies which are in disarray, i.e., going to bankruptcy, and the statistics, I'm just going to use statistics that came out this week from the French government. In fact, you see that still in 2021, the level of companies having problems is, in fact, extremely low. 2020 was extremely low. 2021 is extremely low.
So I think that kind of explains also why the churn can be forecasted just like we are forecasting it. In terms of the percentage of rooms that could be coming from conversion, I think 40% is probably a good number, a good basis. That's, again, what we've done historically. What it doesn't comprehend is the fact that in some cases, you may be able to get some kind of a hub coming from one chain of hotels with whom you would conclude conversion to our brands. But today, this is not, in fact, what I'm telling you. And as far as the EUR 70 million cost reduction plan, a large part of it is already there when we discuss the portion which is people. I told you that 90% of the people that were to be dismissed are dismissed.
The portion which is not yet to that point is the French element of the population, as the rules in France are, in fact, more sophisticated. It takes more time. It takes more negotiation. And this is exactly what we are doing now. And by the way, again, here, it's exactly what we had anticipated. So it just takes more time, but we'll get there. And then it's back-ended also because of the fact that some of the savings you see when you really are able, for example, to put in place a new application. So when I talk about reducing the number of computer applications that we've got in the group, in order to get to that point, you first need to rationalize the number of applications that you've got. So instead of having three systems in the company, I've got only one system.
But in order to get to one system, I need to do some work. And when that work is finished, then I get the savings. So that's why the savings are naturally back-ended in that process. I think that's the answer to your question, Aziz.
Thank you very much.
Moving on to our next caller. We have Richard Clarke of Bernstein. When you're ready, please proceed.
Hi. Good morning. Thanks for taking my question. Three if I may. Not wanting to pat you on the back too much, but I notice your luxury and upscale pricing in Europe is flat year on year versus 2019, I would assume. And just wondering how much of a decision that has been made to keep pricing stable and maybe what that can make us think about pricing the other side of the pandemic. Can we expect sort of price stability throughout?
Second question, something we haven't heard about for a while is the Heartist Fund. You sort of said that you're seeing reasonable stability, reasonable lack of churn. But just how much has been paid out from the Heartist Fund, and how much support are you giving? And then just wanted to check because I think in your release, it says that the second tranche was expected—this is AccorInvest—the second tranche was expected to be proposed on the 1st of March. They said it will be held on the 1st of March. I'm just wondering what the status is with AccorInvest. Has that second tranche been approved? And are you confident that now AccorInvest is now stable given that capital increase?
Yeah. I mean, I'll take them in reverse order because I remember better what I heard last.
In terms of AccorInvest, the amount that you've got on the page, on the highlight, which is EUR 154 million, is the full amount. That's the full capital injection. And you're right. It was done in two times. It was done first in January, and then there was a second injection that was done in March, but well done. And that's the full injection that we will do. And the banks have been complementing the capital restructuring, or I should say the liability restructuring of AccorInvest. And so we are all done with that as of the end of March. So there is nothing more to do on AccorInvest. On Heartists, what we have been allocating out of the EUR 70 million is 24. So we've been using EUR 24 million of the EUR 70 million envelope, and most of it is, in fact, going to employees.
95% + of it is going to employees who are in financial distress. And by the way, just to also give you an idea, we talk about 70,000 people that benefited from the fund. So it really covered a lot of the people that are working throughout our hotels and really suffered from having no more job and not being in countries like the U.K. or France where you have a social net. And so that has been working very, very well for those people who are really in disarray. And on your first question, it's a little bit difficult to do an analysis today on pricing because most of the luxury hotels, as you surely know, are closed. So you've got some basis, but the basis is probably not very relevant.
What we've been giving as instruction is that we really would like, as much as possible, that people don't go into price war because we've learned it from previous crises, and nobody wins at the end. I think I've said that consistently in each of the calls that we've got, but that's clearly the pricing strategy that we've been providing to all our teams. It's difficult today to necessarily do the analysis. I'll give you an example. I mean, you look at luxury in Singapore. I mean, today, the hotels which are in Singapore are used for quarantine. So you've got a beautiful occupancy rate, 80%+ , but it is essentially quarantine business. And the quarantine rate that you've got has not much to do with the rates that you would get when you would do normal business.
make a long story short, I'm not saying that we are making less money on those hotels because you don't provide either the same type of services, but the nature of what you transact, i.e., the pricing and the services attached to it, the distribution attached to it, has nothing comparable. So, summary, the instruction is clearly post that crisis to not go for price war. I think on this one that we will be surprised by the speed at which, when things come back, how fast and strong they come back. And so there is, in my view, a good probability that when it reopens, you will have a demand-supply issue, and notably on leisure, that people are probably not sizing properly.
Thanks very much.
Sure.
One more call. If you would like to ask a question, please press Star 1 and to resend, Star 2. Our next caller is Vicki Stern of Barclays. When you're ready, please proceed.
Yeah. Hi there. Firstly, on the. Hi. Just on the drop- through guidance, some of you are reiterating the guidance at a little bit below EUR 18 million for 1% RevPAR . Just curious, given that Australia seems to be recovering, and I guess that's pretty significant given that you've got the least exposure there with Mantra, I mean, should that continue, is there potential upside to that guidance, or you think that's somewhat baked into the 18 or tad below 18 that you've already given? Second question is just around the strong summer, just to sort of drill you down a little bit more on, I guess, the impossible.
But just based on what you're seeing today, I mean, you gave us some color, I think, there for the U.S. in terms of sort of increase in activity in the last four weeks. Just curious what you're actually seeing elsewhere in the world in terms of any actual concrete booking data or anything you can hang your hat on in terms of giving you that confidence on the recovery. And then just finally, back on the cost cuts, again, really a reminder on whether you think you're going to hang on to or retain all of the 60% of cost savings that are expected to fall within SMDL, i.e., will that division end up sort of printing, once things are fully recovered, more than EUR 100 million of EBITDA, or are you planning on investing and reinvesting some of that back in? And if so, what in? Thanks.
Yeah. I'll do it again reverse. So you answered the point rightfully. In fact, Vicki, we're going to reinvest. We're going to reinvest. In fact, investment in anything that we can do on sales, marketing, distribution, loyalty, I mean, is very critical. As you know, and we launched that plan, which was called ALL, we didn't really benefit of it because of the COVID crisis kind of stopping us as we were implementing. So there is more work to be done here. There is some things that we can do, for example, around management of the customer data and pursuing some of the marketing campaigns to get things better known. So we're going to reinvest, and you will find the benefit of it then into development and into management and franchise margin as the people will even further appreciate, in fact, and recognize our brand. So again, we are not there.
I'm going to lose money on SMDL this year. So I have some time here before I get to a level where this becomes my problem, and it's a nice problem to have. The visibility is a real issue. In fact, the visibility since Q4 has worsened, if you can believe it. I used to be able to know 40% of 40% of the business was done in the last week. So meaning next week, I'll do 40% of what my business will be next week in the week. It's today 60%. So in fact, the data is just going the wrong way in terms of frequency of bookings and capability for anybody to see where this thing is going. So then you can ask me, "So why are you confident?" On the basis of data which I have in my hands on bookings, I have no data, right?
But what I can see is I can see how people react when things open. And it was when New Zealand and Australia opened their corridor in the month, suddenly the volume multiplied by 10x. So again, the basis is small, but it just tells you that as soon as they can, then people suddenly are flowing into it. And we've seen that this summer in Europe. We've seen that in Australia. We've seen that, in fact, in Dubai. The numbers have been just amazing. In fact, we got our best month ever in Miami for some of our SLS properties, best numbers ever in terms of food and beverage. And so what I'm trying to say here is that I know there is pent-up demand. This pent-up demand is supported by the fact that people are putting money aside to unbelievable amounts.
I think just for France, I know the French number better. The people have been putting aside EUR 170 billion last year, more than what they typically do, so because they don't know how to spend, and so I think there is a lot of macro elements that tells you that things will be there. Now, do I know exactly how it translates in terms of numbers and stuff? That's a very, very difficult exercise. I don't know, so long answer, but I think it's a critical answer because on the one hand, I want to give you the confidence that I have myself in what I see as macro driver. On the other hand, I don't have micro data that supports those beliefs, so it's a little bit of an awkward situation, and in terms of Mantra, the numbers are in the 18 that I provided.
So it will fluctuate, but I think I kind of said before that the hotel asset element in the 18 is to the tune of EUR 3-4 million. So that will fluctuate a bit, but that's already baked in. Voilà.
Thank you. Thanks very much. Just, sorry, follow-up on that first answer. I mean, any sense as to sort of how much of that might get reinvested in terms of the SMDL cost savings? I appreciate you're a long way off printing profit there yet, but obviously, it's a potentially quite large number. Thanks.
Yeah. No, I mean, we are one year and a half to two years ahead of the time at which I would like to give an answer on this one. So just give me the benefit of landing and delivering, and then I'll give you more granularity.
But again, we will not keep a significant amount of profitability on that line because that makes no sense.
Understood. Thanks very much.
Moving on to our next caller. We have Jamie Rollo of Morgan Stanley. When you're ready, please go ahead.
Thanks, everyone. A couple of questions, please. First, just on the liquidity number, I think the year-end liquidity was EUR 4.3 billion. Please correct me if it's not that. And then you gave us the numbers on slide three about the investments spend and so on, about EUR 500 million, which suggests there was a sort of cash outflow of about EUR 200 million. So that would imply about cash burn of about EUR 80 million a month. I'm just wondering what that is missing. Perhaps the starting point is wrong on liquidity. And then the second question is, I'm quite surprised about another change in the disclosure.
I'm sure it's as frustrating for you as it is for us. But if you could please explain why exactly it's done again, because it does make it very hard to track the business. And specifically within the numbers, what is Australia now as a percent of revenue in the new hotel assets and other line? And also within Australia, please, could you give us the splits of guests between domestic and international? Clearly, it's all domestic now, but historically, at least, what's the split, please? Thank you.
Yeah. I mean, the numbers between domestic and international, I mean, Australia is 8,000 km away from any place. So it's 85%+ domestic. It's essentially a country where the business is domestic. So I think that's the answer on Australia. There is a lot of Australian people that go visit the rest of the world. So you've got that flow.
Granted that Australia is not either a country where you've got billions of people. I don't have it in the 40 million something like that, so it's not a huge country, but it's essentially domestic, short answer. In terms of the liquidity, I'll take the question on liquidity. As usual, Jamie, you're a machine because your computation is relatively close to reality, and so the cash burn, if you computed this way, is proper, and it is a bit higher than the number that I provided, the EUR 40 million. And so the reason for why you've got that is because, again, the EUR 40 million is a number for the full year, so you will have the EUR 40 million over the full year. In the numbers that you've got in Q1, you've got a huge working capital effect, which you won't have in the rest of the year.
And notably, because in Q1, you pay bonuses, because in Q1, you pay some of the vendors that you didn't pay at the end of previous year, and not because you did not want to pay, because the contract structure this way, like PSG, for example, is an example of that, because also you've got some tax effect. And we got a huge tax credit in Australia, very significant tax credit because they enacted the law by which you can recover some of past losses. And I'm talking something like EUR 25 million, just to calibrate. So all of the elements make that the working capital is fluctuating. You may recall, more generally, that H1 working capital for the group is always a negative number, but that over the full year, you come back to more or less a number which is close to zero. So that's why.
But your computation is right, Jamie. And the weight of Australia in hotel asset is about 60% of the hotel asset and other. So 60%. I'm talking revenue, huh? 60%.
Yeah. Okay. Sorry, is that current revenue or was that pre-pandemic revenue?
No, no, no, no. That's current. That's current. That's current.
Okay. And just on the cash burn, so it's obviously gone from a EUR 40 million outflow in the second half last year to roughly EUR 80 million in Q1. But clearly, your guidance is implying it'll be much better than EUR 40 million for the rest of the year. So it's a fully numbered 40. So we're looking at something in the EUR 20 million or EUR 30 million range, are we, towards the end of the year?
Yeah. Yeah. Yeah. Exactly. Yes. Yes. You have, like in every company, working capital that follows the pattern by which you do pay the bills that you incur. So there is definitely here a pattern which is not a new pattern. So that's also why the guidance is full year guidance, because if you were to provide guidances which are by quarter, you would have fluctuating numbers.
And on the disclosure point, what's the real reason for changing it again?
Changing what exactly, Jamie? Sorry.
The regional disclosure.
Oh, because there is a rule that I did not decide, which is called IFRS 8, which tells you that essentially the way you should explain your numbers to the rest of the world should be linked to the way you are organized as a company and the way you manage the company.
You may recall we used to have a given number of regions, and we've changed that to eight. So we simplified, in fact, the structure by taking off some consolidation level. The consolidation levels were mainly Europe and Asia. Because of that, we now have, in fact, more people that we follow in terms of knowing how the business is going. That's what we called being closer between the headquarters to the ground on what's happening on the business. So as we changed that, we've got to adapt, in fact, our reporting because the way we manage the company and the numbers are reported internally are, in fact, different. By the way, just to again calibrate one thing, Europe is 50% of the business.
In fact, when we were reporting before Europe, there was a director of Europe, but Europe was half of the group. Today, what you've got is you've got something which is much more balanced for each of the regions which are created. And doing it this way, taking into account how domestic, in fact, the recovery is currently, as we have all seen, is in fact making a ton of sense. So besides the element that you are saving the cost of a consolidation layer, which was the Singapore headquarters or the Paris headquarters, you are also, more importantly, closer, in fact, to the action and then more prompt at taking the right decision locally. Because a lot of the businesses will be local business initially. Okay.
Thank you very much.
Before we move on to our next caller, a reminder, the one to ask a question at this time. Our next question comes from Stuart Gordon of Berenberg. When you're ready, please proceed.
Yeah. Good afternoon. Just a couple from me. You obviously talk about this significant summer rebound. Can I just clarify, when do you think that starts in terms of the vaccination program? So at what point, particularly in Europe, do you think that will start? And the second thing is you've obviously talked about Australia. I think you also mentioned Israel and the recoveries we've seen there. I think Australia is still down somewhere north of 40% versus 2019. Israel had a fantastic March, and yet that's still down 66% versus March 2019.
Is that the sort of magnitude that you think a strong rebound will be reflected in RevPAR numbers versus 2019 towards the back half of the year? Thanks.
Yeah. The important point about the vaccination is that it allows stopping confinement. What we really need to get out of is a mode into which people are confined and hence cannot consume in bars, restaurants. And as you know, it's very complicated for anybody to go in a hotel if you can't get served for dinners beside the fact that you're afraid of getting the disease. So that's why the vaccination is so critical. And that's also why I think summer will be different because if everything goes per plan, and again, I'll make the proviso that I am not a scientist. I don't know what variant can come up.
I have learned one thing in this crisis, which is that you always get surprised, and one day, we were told that a vaccine is to be stopped, and the next day, we're told that it starts again, so there is a lot of things that I don't master, but the one thing that I know and that I see is that as soon as you've got confidence, and the confidence can be through vaccination. It can also be through identification of people getting the antibodies in their blood that proves that despite getting the vaccination, they're protected. They've got the cells that protect them because they got the disease already. It can also be by some test called a PCR that they went through and can prove that within a given period of time, they are sound.
It's a series of things that we need to go through that so that you reach a point where, again, people have confidence that they can go into places and not get ill. And so that's this phenomenon here. So how do I quantify it and how I am sure? The numbers that you quote, in fact, there is a progression here, which it will go and it will improve, but it won't change from the one day to the next one.
Granted that we are at - 60%, I can see if the governments go per what they say they want to go do and with the means, which are the means that the people have today financially and the willingness that they've got, that any analysis that you can gather would tell you pumped-up demand, Google AdWords, all of that. You read it as I read it. I think there is here a strong element for a rebound over summer. Will it materialize? I don't know for sure. But is there good elements when you are a rational person to think that it should? Yes.
Okay. Thank you.
All right. At this time, we have no further questions. So I'll make one final prompt to ask a question. Please press star one on your telephone keypad now. And with that, I'll return the conference over to your speakers.
Okay. Thank you very much for your attention. Thank you for the time. And we'll talk to you in July. And at that point in time, we'll know better on how everybody has been behaving and how good we are doing. Okay? Thank you. Bye-bye.
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