Good afternoon, everyone. Thank you so much for connecting yourself to the first-quarter revenue results for Accor. So we're going to go swiftly on the numbers of pages. If you could go to page number four, where you have the global map of the world, what you obviously see first with the red dots is where the epidemic is unfortunately present and growing in many of those jurisdictions. And the title says that, I guess, 90% of Accor hotels globally are either closed for business or they close for booking. In many instances, owners for insurance and other reasons want their hotel to be maintained open, even though there is no occupancy. If you want to have precise numbers, the numbers are following.
As of last night, we have 3,142 hotels being closed out of a network of 5,085, which is 62% of the portfolio is closed, closed meaning really basically with nobody except maybe somebody on the maintenance side. That number varies quite a bit in between regions. So I'll give you the five big regions for Accor. Europe, we have 2,330 hotels being closed out of the 3,045, which is 77% of the hotels are closed. In Asia-Pacific, 311 hotels are closed out of a network of 1,225. Only 25% of the hotels are closed. Note is made that 100% of the hotels in China are today back and reopened. South America, 277 hotels are today closed out of a network of 397, which is 48% of, oh, sorry, in South America first. Sorry, I went too quickly. South America, 277 closed out of a network of 397, i.e., 70%.
Middle East and Africa, 135 hotels being closed out of a network of 296, i.e., 46% being closed, and North America and Canada, 89 hotels are closed out of a network of 122, i.e., 73% of the hotels are closed. If you go to the next page, which is page number five, what you have here is obviously on the two columns. On the left column is something which all of you know, to the risk of being dead wrong, is, as of the last few days' consensus, we're looking for a negative growth GDP worldwide of minus 3%. We're looking for a lot of government stimulus packages being made on a national level, which is, in many instances, way higher than 5% of the local GDP.
In addition to what the national government may and might do, you have liquidity being provided by the two major central banks, the European Central Bank, which is today over EUR 1.1 trillion, and you have the Fed injecting $2.3 trillion as of the last few days. Of course, those numbers vary on a weekly basis. What you have on the right side is what could be claimed as being direct support to the financial, to the travel and leisure industry. You have some tax deferral. You have some social charges either being extended or likely to be canceled. It's going to be on a case-by-case basis and, of course, on a country-by-country basis. You have a lot of reimbursement or deferral of booking cancellation. Again, there is quite a bit in different geographies.
Indirect support, subsidies for the furlough of, as you know, Accor has furloughed 210,000 employees under Accor brands. And, of course, as has been stipulated over the last few weeks, it's not only various, but it is extraordinarily different in between workers in continental Europe being maintained at 85% plus of the last month's salary and in other jurisdictions being as low as 20% of what you could have been compensated the week before or the month before. And you have progressive deconfinement being done in different countries. You know it's been happening in China. It's been happening the last four, five days. In South Korea, it's the case in Scandinavia, in most of those countries, in Slovenia, in Austria, next week likely in Germany. So we go back to this maybe on your Q&A.
The one thing which is not on the slide here because we've been digging into what experts say is the international tourist arrivals in the world likely to be down between 20% and 30% in 2019. I'm assuming that 20% or 30% is on a asset of 1.5 billion, which is the number of international travelers that we have experienced in 2019. That number may be low, by the way, because if they don't reopen any frontiers, my assessment would be probably more bearish. That's what I see from, I believe it's WTTC. On the next page, which is page 6, you go on two columns as well. The title says, and we've been saying it quite a bit, on the asset-light profile company is clearly a true asset in terms of ability to weather the storm.
On the left side, we talk about the balance sheet with the management of our own debt and cash liability and debt profile. We have ample cash position immediately accessible if there were any need for it of EUR 2.5 billion at the end of March 2022 without accounting for EUR 1.2 billion of an existing revolving credit line in which we had successfully renegotiated and obtained waivers, or i.e., holidays on any COVID-19 covenant testing delayed by a year until June 2021. On the right side on cash preservation, a lot of protection measures have been done and obviously worked on since mid-March on G&A reduction by EUR 60 million out of the total G&A package. We can go back on your Q&A with Jean-Jacques and myself.
We, of course, have been trying to adapt as quickly as we could the reduction of the costs, trying to offset the drastic expected fee reduction when it comes to sales, marketing, distribution, and loyalty. How could we adapt to what is likely to be missing and trying to reduce as much as we can and as quickly as we can all those costs associated with SMDL? Reducing, of course, CapEx, which is a third, EUR 60 million. You've seen that we have suspended the dividend of EUR 280 million and have renounced to continuing the share buyback in excess of what's being done in the first quarter, which was EUR 300 million. Of course, it's looking every day and probably a couple of times a day, even though we do have ample liquidity on what is the cash needed for in the 110 countries of Accor.
And to make sure, I guess we know that number every day passing and start with the EUR 2.5 billion as of end of March. That's where we are from my introduction. I'll leave the floor to Jean-Jacques and I'll come back to you on the conclusion. JJ.
Hello. Thank you, Sébastien. Hello, everybody. On this call, we traditionally comment revenue, development, RevPAR, but we don't discuss earnings. Today, given the COVID-19 environment, we decided that we would provide to you some color on the effect of the COVID-19 on the EBITDA on the basis of the Q1 actuals. We would nevertheless like to remind you that visibility is currently not high enough for the group to estimate the financial impact of the crisis on the result financial position for the full year of 2020. Let's start on page eight with the Q1 2020 takeaways. On the left part, the business update. In terms of business update, RevPAR was down 25.4% over the quarter and with a point in March, which was -62.7%.
More on the sunny side of the street, the development was good and we were able to add to our portfolio 8,000 new rooms. This reflects the resilience of the model and the net system growth for the last 12 months is to the tune of 5.2%. We also signed 8,000 rooms in Q1, which means that our pipeline was stable at 208,000 rooms. These numbers, this business translates into the following financials at revenue level. We have a group revenue at 768 million EUR, i.e., decrease of 15.8% like for like. And we see the management and franchise revenue of it being down by 34.9% at the level of 150 million EUR. I'll detail that later on. We move to the next page. Just a little bit more details on the network and pipeline by region. So the classical chart that we would do every quarter.
So, as I said, we open 8,000 rooms. Just to give you an idea of the noticeable openings, there is the Fairmont San Juan in Puerto Rico for close to 400 rooms. You've got Mövenpick Stuttgart Messe in Germany for 260 rooms that was opened in June. And then in the U.S., a large 21c in Chicago of 300 rooms, which was opened in February. Just in terms of bigger numbers, Asia-Pacific accounted for half of the openings, which is a situation that we've been seeing for now many, many quarters. We also signed 8,000 rooms. So the pipeline is stable, as I said. But the one thing which is also good is that the churn remains in a sound range. We are below 2%. And so that's also a good result in terms of the evolution of the portfolio.
Given the exceptional economic conditions, some owners may face difficulty to finance new projects. Some building works are being delayed as we see it. That will affect the room growth. And so probably we should see, we will see a number for the full year 2020, which is going to be below the 5% guidance that we had been providing for several years in a row now. I would like to highlight that these projects are postponed but not canceled as much as we can see. Moving to the next page, you have here the overview of the RevPAR for the key geographies. Europe and Asia-Pacific account for close to 75% of the business with the rest of the world and then the total group. You see very well on those curves the dynamic of the pandemic, which started in Asia-Pacific.
Hence, the number in Asia-Pacific at -34% is the worst. Then it came to Europe, where you are at -23.2% for the Q1 2020 numbers and expanded in the rest of the world with only a spot which is less affected than the rest of the world, which is South America. And that translates into the group number. Let me go into a bit more detail. In Asia-Pacific, Greater China, which is the pandemic epicenter, was the most impacted. And you have there a RevPAR for Q1 at -68%. The RevPAR, in fact, in March was still very negative at -83%. But we see a little bit of improvement in the occupancy level, which is the sign of what you can read in the press, see in the news, i.e., that there is some turnaround there.
And so the occupancy that we have in our hotels, which used to be at 11% in February, doubled in March to a level of 23%. So that's good. If you look at the other big elements in Asia-Pacific, you've got Australia, which posted 18% RevPAR in Q1. And again, here, it reflects the fact that the pandemic has been going to Australia with some delay and also the fact that some of the hotels there have been used right from the start for quarantine. This is only a short-term impact, but it's a positive impact. If you move to Europe, you've got here a very sharp deterioration that started one month later at the end of February for most countries. And you see France posting a -22% RevPAR, Germany posting a -25% RevPAR, the U.K. posting a -22% RevPAR.
Everybody is in the same ballpark. And in each of those countries, lockdowns were put in place at about the same time, somewhere between the 17th of March for France. And for the U.K., it ended up being the 23rd of March. So all of that is very similar in nature and in numbers. And frankly, there is not much difference between London and the provinces or between Paris and the provinces. We really have here, unfortunately, the same global patterns. As for the rest of the world, NCA and Middle East and Africa are following similar trends. They, in fact, have RevPAR to the tune of 22% and 21% respectively. So very much in line with what you saw for the key countries in France. And it's only South America which shows RevPAR in Q1 of about half that amount at 11%.
Again, because of the lag in pandemic spreading at this juncture. There is nothing quotable on the mixed price segment. This is a cross segment. This is a cross geography. It's just a question of when the pandemic is hitting the geography, which is generating the numbers of the impact, I should say. If we move now, not to RevPAR, but to revenue, which is the Slide 11, you can see the revenue, the total revenue was EUR 768 million, which is a minus 15.8% like for like growth. The reported growth is at 17%. And there is small effect on, sorry, perimeter with the Mövenpick portfolio, lease portfolio sale, a little bit of currency, but de minimis frankly. As for hotel asset as a segment, the revenue was down 17.5% on a like for like basis. I mentioned a 25.4% RevPAR.
The explanation and the link between the 17.5% and the 25.4% is as follows. You see the M&F, the portion of hotel service, which is management and franchise fees, which sees a very sharp drop of -35%. I'll detail that in the upcoming slide. You see on the other hand, the service to owner, remainder of hotel services, sorry, which only shows a decrease of 8%. Hence, the average at 17.5%. The reason for that is that STO, service to owner, as you may recall, is made of two buckets. One is sales, marketing, distribution, and loyalty. This one has been behaving just like the RevPAR decline, as you would expect. Then you've got reimbursed cost, which is the people that we have in hotels and that we carry in the hotels that are not our people.
We basically have those costs in the period and get the revenue for the same amounts in euros in the same period. Those people were only furloughed at the end of March. Hence, there was not such a decrease of the reimbursed cost year on year. Hence the fact that STO, on average, was only down 8% when the RevPAR was down 25%. A little bit of technical explanation, but this is quite significant variance to be explained. As for hotel assets, it's much easier. It's essentially the number reflects the geography. As I told you, Australia and Brazil have been enjoying a relatively milder pandemic up to now. Hence, the relative resilience of the number and hotel assets is essentially Australia and Brazil. New business is down 13.8%. Nothing here to report.
The holding and Interco are reflecting the sale of Orbis and the Mövenpick lease portfolio that you surely remember we concluded in Q1 2020. If you move to the next page, which is the drill down in the hotel service business of the management and franchise revenue, two points really to mention on that table. Number one, the RevPAR being 25.4%. Why is it that the revenue is higher to the tune of 34.9%? This is, in fact, coming from incentive fees. As you surely recall, there is a portion of our management and franchise fees which are incentive. As the business is not there, the hotel profit is not there. And hence, the incentive is not at the same level as what you would have last year. As a rule of thumb, it has been dropping at twice the level of RevPAR.
Then the other discrepancy that you may see on the table by regions is essentially the reflection again of how the COVID-19 has been spreading over geography over time. So South America is better and Asia-Pacific is worse. This is essentially the explanation on that table. Now, last but not least, COVID-19. So we provided to you some numbers at the end of February as part of a business update. And we wanted here, on the basis of what we see in our account, to give you an update of the COVID-19 effect versus what you could have expected on a normalized year. We have a gap which is estimated to EUR 170 million year on year coming from the COVID-19.
One very important point in that number, and to understand that number, is we discussed and we sent a press release that was explaining some of the cost measures that Sébastien summarized at the beginning of the pitch. These cost savings were mostly implemented at the end of March. So that number doesn't account for the cost savings that we've been putting in place. And you should see those cost savings popping up in the months of April, May, and June. Another thing that we would like to help clarify, giving you as much as we have on that crisis and the effect of it on our financial, is that if you do a rule of thumb on those numbers, you could infer that one point of RevPAR is about EUR 28 million of EBITDA.
That's a much different number than any of the numbers we may have discussed in history. Granted that we are in a much different situation than any situation we've been discussing in history. Just to refresh everybody's memory, we've used the fact that RevPAR, one point of RevPAR, is equivalent to 7 million of EBITDA when you are on positive RevPAR in a bracket of 0-3%. And then that you are at -12 million when you are on a RevPAR which is negative, again, in a bracket which is 3%-5% of negative RevPAR. So that's about what the rule of thumb that we've been using. They don't really apply anymore when you are in an extreme RevPAR drop environment like the one we faced. Why is that?
Our business model is based on scalability of the activity. We went through that. We explained the virtuous circle back in the Capital Markets Day in 2018. This model is based on the following cost structure. Management and franchise holding costs grow with inflation. Sales, marketing, distribution, and loyalty costs, which are part of service to owner, are expensed to the tune of the fee received from the hotel owner. And then you've got those reimbursed costs that I was alluding to, which are also part of STO and are a pass-through. I get reimbursed for the amount of payroll that I have to pay to the people that work in the hotel on behalf of the hotel owners. And then there is another leg to it, which is the remainder of the group that is still asset heavy. And in our case, it's mostly rental.
So now, how does the RevPAR variation we are facing affect that model? I mean, sales, marketing, distribution, loyalty cannot be flexed in line with revenue. And in fact, our assessment is that there is about 50% of the costs which are variable. And you can easily understand that by thinking that in sales, marketing, distribution, loyalty, you've got IT infrastructure as an example. So whether you are working or not working, I'll take an example that everybody will understand. You still pay your license of Microsoft, and you still have your depreciation for the system that you've been developing. When I turn to M&F and holding costs, so management and franchise holding costs, instead of letting them grow with inflation, we're taking actions. And Sébastien mentioned the EUR 60+ million reduction that we're going to do on those costs.
Those costs are essentially the headquarters costs, whether here in Paris or in the regions where you have all the people that are basically managing and helping the franchising of all the hotels in the field. Just on the last point, which is material, we did mention to you back in February a EUR 40 million impact for 10 points of RevPAR when we published the year-end account. So that's about EUR 4 million for one point. And that's also in that sensitivity to be taken into account. So once you take all what I have said into account and you see the impact, you see through the implementation of the appropriate cost savings as we've been developing the plan, our best estimate today is that for one point of RevPAR for the current year, we should be slightly north of EUR 20 million of EBITDA.
Just wanted to give you that read of where we see those numbers being able to be interpreted. And we will diligently work on the cost reduction plan. With that, I'll leave the floor to Sébastien for some closing remarks.
On the page after, there's again three columns. On the first one, which is as a matter of introduction and background, many of you know that, and I did allude to, only 200,000-plus employees being furloughed between the 22nd of March and the 1st of April. Considering that decision, which was not only drastic but extraordinarily quick to be activated because it took us 10 days for those people not to be back at work exactly one week after being noticed, the board decided to have that 25% of the non-paid dividend, i.e., EUR 70 million, dedicated in what you see in orange, the ALL Heartist Fund.
That EUR 70 million, which is column number two, is really there, as I mentioned it, to those employees or individual partners on a case-by-case and in all the geographies of Accor. On top of what has been done on that fund, which is currently being activated in the hands of local CEOs with a very disciplined, compliant, cumbersome reporting because it is, at the end, the money of our investors and looked after by the compliance committee of the board of directors, of which, by the way, we meet with them now every week for the last month and a half as opposed to every five to six weeks. So do we with the executive committee, of course, of this company. All of that by a video conference, of course.
On the last column on the right is, in addition to what we've been doing for the employees, partners, and others, you know that in many, many jurisdictions, actually started in China, in Wuhan, and other places in which Accor has been a caretaker and a provider of our own hotel facilities to the benefit of hospital doctors, nurses, medics, any army who needs basically to be hosted. We're doing it in France. We actually launched a reservation platform called CEDA, which is COVID Emergency Desk Accor, in which we already have 30,000 nights paid for at cost by the French government authorities to welcome all of those who need to be hosted next to the hospital. We're doing the same thing in the U.K. for 60 hotels, doing the same thing in South America, likely doing the same thing in Canada.
So while our hotels are being closed, we actually make use of them voluntarily by each owner of Accor. I have to, of course, agree that those premises will be made available to make sure we can battle the crisis and rebound as early as we can. It's not only solidarity, but it's really trying to cope and trying to get the timing as quick as possible to come out of it. The next slide, it's something which should be of no surprise to you, but we used it for the board of directors and for own assessment on how dependent are we from international market. How dependent are we from the reopening of either national borders or international borders? You see that from the left to the right. No surprise to you, and that's Accor average number for 2019, by the way.
In Canada, 70% of mostly older Fairmont hotels' occupancy last year has been 70% Canadian nationals. Number is extremely high for America, which is 97% of our guest profile in America happen to be Americans. 75% in Brazil. You see a bit less, 66% in the U.K. You see Germany and France kind of actually 53% and 64%. Bear in mind, though, that I guess if you look for intra-continental Europe for both Germany and France, that number is way above 80%. People coming from Netherlands, from Belgium, from Spain for that matter. Huge domestic and huge intra-continent. Notable exception of UAE at 20%. China, 82%. To pause a minute on this. I told you that all the hotels of Accor are today reopened. It's today 97% of the traffic we have, of course, in China is made of Chinese nationals.
And less than this because, as you know, we still have a 5% participation in Huazhu, which is the second largest hotel operator in China in which I'm a board member of. They run, as of last night, at 67% occupancy, and they only reopened two and a half weeks ago. Certainly quicker, better, and faster in the economic affordable segment. We don't see that 67% in the mid-scale, upscale segment. It's gradually getting better, but it's still into the low 20s and not yet into the 50s. We opened 10 days after Huazhu. Indonesia has 71%. Australia, no surprise, no surprise, is an 83% domestic market.
So it's just only to share with you that within the large countries, if we were to reopen, as we will, then we probably, and if national government permits it, certainly for France, and I'll touch upon one minute, as you know, we have 67 million people in France, likely not going anywhere else other than France over the next 60 days. France is such an extraordinary country. There are numbers of opportunities for the French national to discover the French regions and then stay in the Accor network and many other hoteliers in France. That is the case for U.K. and many other countries, by the way. On the last slide, and then we'll get to you on the Q&A. There's three, four words here which means looking at.
One is caring, caring for somebody who sees the nature of what we do, which is why we're doing so much for the frontline mission-critical workers today. And the second word is, of course, reassuring. We're all going to be reopening hotels. It's going to come back, but of course, it's likely to be different. And a lot of our employees and a lot of our clients are going to want to be reassured and want to have proofs of it in terms of health condition, in terms of procedures, and in terms of methodology. For the employees, of course, and you've heard what I said, looking after them and certainly knowing how we can help. Guests, we're reaching out to all of them on a daily and weekly basis. Owners, never been closer than ever to them.
We have multiple offices in multiple jurisdictions, and it's just one phone call away and no longer a visit, but super close. Partners, it's worth saying. Shareholders, we're taking all the mitigation measures we can, thinking out of the box, stopping projects, cutting costs, furloughing people, a lot of things that, I guess, we may go into further details. But believe me, we've been tackling and basically turning every stone over, trying to make sure when you don't have the revenues, you have to cut the cost. There's no other measures. And then there is this alignment, which is tough on responding to urgency, which has been the last 60 days and likely to remain over the next 45, 60 days. But in the meantime, you have to plan for the future because you need your energy to be still at a high level.
You need to prepare for the rebound. You need to design it. You need to be closer to the government agency, to the health authorities, to make sure they don't impose on you something which is going to be a detriment to your business. And you need to be an actor, not a spectator, and proactively engage and prepare for that recovery as we do. We just simply don't know when that is. But I can tell you, we will be well prepared when that date will come. Let's go now to any of you on the Q&A session. Thank you very much.
To submit for questions on today's conference, please press star one on your telephone keypad, and you will be advised when to ask your question. Again, please press star one on your keypad now to submit for questions.
Our first caller is Jaafar Mestari of Exane BNP Paribas. Jaafar, when you're ready, please go ahead.
Hi. Good afternoon. Thank you for taking my question, and I hope everyone is doing well. My first question really is a very general one on your management philosophy and your approach to this completely unprecedented crisis. Are you trying to build the smartest and the most detailed reopening schedule and budgeting towards that? Maybe May, maybe June, but maybe September, who knows? Or are you doing everything on a worst-case basis? Are you preparing just in case minus 64% lasts for a number of months? So that's my first question. Secondly, on the EBITDA sensitivity, thank you for highlighting that. So EUR 28 million right now without cost savings for each point of RevPAR, but going to, I think you said, slightly north of EUR 20 million going forward. Is that something that actually continues to slightly improve the EUR 60 million OpEx savings that you've announced?
Is this related to my first question? Is this the first batch, or is this something where you're going to be continuing to look at opportunities? And lastly, ALL, I would assume it's not a great period to showcase a loyalty program right now. And I would assume no retail bank is going to want to launch a travel-branded credit card. So are you entirely suspending it? Is that committed marketing costs that you'll definitely not be spending? And I did get a couple of emails suggesting I'll watch videos on the ALL website.
I will leave Jean-Jacques answer the question number two and question number three. In terms of question number three, as I said to you, we want to keep the bond going and relationship with the 63 million Accor Live Limitless members. It doesn't cost a penny to basically send them basically WhatsApp and information. And what we're doing mostly is make sure that when they are at home and safe, we can actually provide them with a lot of initiative when it comes to whether it is gymnastics and other things. So I guess we keep contact in a different fashion. And we need to do it. And it's very important for the people to have news of Accor as the loyalty members. On the first one, Jaafar, you are absolutely correct.
Since we don't know the shape, the time, the nature of the recovery, everything we plan for is for the worst. Every assumption we have made within Accor over the next 12 months is on a very, very gloomy, pessimistic scenario when it comes to EBITDA and when it comes to working capital. And so hopefully, the terms is going to turn to be better than expected, but no management should be preparing for blue sky when you simply don't know how to spell it. I know it's coming, but we're preparing for the worst, of course. EBITDA?
Yeah. Just on the plan, Jaafar. I mean, the EUR 60 million plus is obviously in the plan. And as I said, that's why I say EUR 60 million plus, because EUR 60 million is the basis that we've been working on at the beginning, and we're going to a higher number than that one. And more generally, I think the one thing that we've learned through that crisis, and everybody has been learning that, is that the next week was not exactly the week that you had planned the week before. And so it has been an ongoing process by which we've been looking at the numbers as they were evolving and have been revising our plans as, in fact, the target was also moving.
And so it's a very dynamic way by which we work with our operations on all these saving plans, having several reviews by region or by function in a given month. And so the thing with that is that the more you look and the more you find, the more people have got ideas on how to tackle and deal with situations. So it's going to be something that we're going to further push with time. And then ALL is obviously part of it. ALL is obviously part of it. And so we gave you a number in February. You may recall EUR 60 million as the P&L effect for the year. Into that, there is 20%-30% of it that we will adjust for in the plan. But frankly, it is not the largest number that we've got to work on.
On the credit card, Jaafar, we're going blind. We're going dark, sorry, on all the promotion marketing campaign as we've announced in probably late March. On the credit card, you'll be surprised. Talks are still undergoing with Visa, of course, but with all the RFPs who've been launched in different jurisdictions for Northern Europe, for Malaysia, for Australia. People are still working on it every day on basically preparing for those cards to be launched. There's no money being invested, but none of the guys we've been talking to have stopped considering launching a travel card. It'd be delayed, but count on me, you're still going to have one.
Thank you very much for all of this. And maybe just a quick follow-up on what you say about the worst case. If I do very quick math, EUR 150 million for the next nine months, there's a worst case where you have EUR 1.4 billion revenue hit, effectively deeply into negative profits, much higher debt. What is the plan for that if that is the worst case?
What we're doing is obviously we've done all those mathematics. It tells you that, I guess, we can go much further than nine months with the cash we have, which is also why we renegotiated the covenant with a holiday on any ratios with the commercial banks on a EUR 1.2 billion debt. So we have fast, efficient time to basically cope with what could be nine months, 12 months. And then we'll have better clarity after summer on where we are with the shape and the strength of that epidemic. I'm not talking vaccine here. Anybody knows that vaccine is at least 18 months to two years away. But one has to think that some medicine will be made available where people will no longer die from that virus and could cope with it.
But we're just looking at how much cash we have and how dependent or independent are we from other sources? I can tell you for a fact, we are not depending from any other sources than the cash we have on the balance sheet and no need for it until further notice.
All right.
Just, Jaafar, I know it's obvious, but I'll say it nevertheless. I mean, the savings are going to kick in as soon as April. The 1 50 won't be 1 50.
Thank you.
All right. Our next question comes from the line of Jamie Rollo of Morgan Stanley. Jamie, when you're ready, please go ahead.
Thanks. Good afternoon, everyone. Three questions, please. First, just on cash, could you please give us the end of March or even current cash number so we can calculate what was spent in Q1 or better still? Can you give us what your loss rate is, your monthly cash burn under the current sort of revenue situation? Secondly, I'm just thinking about the services to owners and the comment you made on the fixed costs there. The €20 million EBITDA sensitivity to 1% of RevPAR, I think if my math is right, about half that is in management franchise. So how much of the remaining sort of €10 million is in STO versus hotel assets? And what is the exposure to owners being unable to reimburse you for what you're spending on the system and on management contracts? And then finally, just a quick one.
I guess there's not much going on, but in terms of the pipeline to your pipeline, I'm assuming things are slowing dramatically. What would your best guess be for unit growth, perhaps, for next year? Thank you.
Yeah. Jean-Jacques, I will do the first two, and I'll do the third one.
Just on cash, Jamie, on the presentation we just did, we gave you, in fact, the cash at the end of March. It's EUR 2.5 billion. So we also wanted to provide you actuals. As much as it is difficult to make forecasts, at least for the actual, we just wanted to make sure we provide you the information that we have to be giving you the best possible information. So that's on this one. I mean, on the cash burn, I think if you were to say that in the month of March, under 50 is a number, you wouldn't be too far off. And again, this is something that will fluctuate over time on the basis of what is the cost saving, but also on what is the extent in which things happen.
If the crisis was to go for much longer, obviously the action that you take and the way the number shape are not the same as if suddenly in June, you get your hotel to be filled back in given geographies and suddenly things flow back again. So there is a lot of, I would say, parameters around what the numbers may be. But anyway, to give you a sense, I think the EUR 200 million is a good number. Under EUR 50-200 million is a good number. Under 50 for the months and 200 for the quarter. In terms of the bridge or the EUR 20-plus million, I think you're right in what you say on the portion that relates to hotel service. I gave you what is.
Management franchise. We keep saying hotel service.
You're right, Sébastien, management franchise. Then I gave you what is the hotel asset, and so the remainder is STO, i.e., sales, marketing, distribution, loyalty. And on the last, which is the pipeline, I'll give you two numbers because one is coming from the 125 developers who've been telling us that, I guess, we should be looking at a 3% plus or minus net supply growth for the year. That number has been revised downward over the last three months, of course, but it's still pretty optimistic on the 3%. The number that I want to give you as a management team here because the developers are commercially minded, of course, otherwise it'd be poor developers. But I guess the number should be north of 2, but in between 2 to 3%. But I won't bet on the 3% plus.
One additional element to this, which is worth noting, by the way, is part of the 3% plus amount that the developers are talking about. Half a percent of that is what they call instant noodles, which is kind of a funny name. Instant noodles for them is different hotels unbranded or branded with somebody else who've been knocking on the door, as they did actually in the last quarter of 2019, where you had quite a few of them, on people maybe changing horse and talking to Accor on having Accor putting our brands very quickly for them to be able to weather the storms differently and probably have access to third-party financing that they couldn't have had if Accor was not there. So we may be lucky and surprised in those instant noodles popping in, they want me to believe.
But granted, it happened in the last quarter last year.
Thank you for that. So I could just come back on the earlier answers? I think the release said at least EUR 2.5 billion. So the cash was actually EUR 2.5 billion, was it?
2.5.
Okay. Thank you. And did you say EUR 150 million burn for March alone and EUR 200 million for the quarter? And if so, does that 150 include all other costs, not just OpEx?
Yeah. I mean, the under 50 is the operating burn. If you were to do an acquisition, it's done into that, but there was no acquisition. So it's the operating free cash flow, if you will, burn. If I were to buy a company, this is not in that number.
Sure. But interest and CapEx makes that a little bit harder.
Yes. It is into it. The recurring CapEx is into that number.
Okay, and my question on the STO, actually, it was slightly different, actually. It was also what's the exposure to owners being unable to pay? I mean, that might come through the working capital number, but what's your concern there, please?
We don't see that. We don't see that happening. I mean, granted that, in fact, the people don't have a lot to pay either because this revenue has dropped significantly with the RevPAR being down. So that you know. But we don't see today people not paying us. Something to be obviously monitored over time.
Thank you very much. Thank you.
Sure.
Our next question comes from the line of Richard Clarke of Bernstein. Richard, when you're ready, please go ahead.
Good afternoon. Thanks very much for taking my questions. Three if I may. Just first one, whether you could just update us on AccorInvest. Obviously, that's quite a leveraged asset-heavy entity that wasn't generating a lot of earnings last year. And what is the sort of financial situation there? Is there any situation where Accor would have to put any additional money into AccorInvest, or does it have its own resources? Second question, you mentioned sort of Huazhu and its responses in China. They've guided to 1%-1.5% permanent closures. Any thoughts on what the level of permanent closures might be in the Accor portfolio globally or just in China, if that's possible?
Then, just in terms of keeping those hotels open, I know that the Heartist Fund has got some amounts that can go to owners, but what else would you be willing to do to sort of support the owners? Are you going to defer fees, defer CapEx requirements? Is there any situation where you'd be willing to take stakes in the underlying hotels to support them staying open?
Okay, so I'll go, and then Jean-Jacques could pop in. And if Jean-Jacques goes, I'll pop in. On the AccorInvest, as you know, it's a privately owned company in which we have a 30% stake and with some very large institutional shareholders. They obviously also prepared themselves for the worst. We do share all our estimates. Numbers, projections are communicated, shared at the AccorInvest level, which is evident since we represent 99% of the brands of AccorInvest. They also have their own set of negotiations on seeking holidays from covenants with their own syndicate on the revolver line, which they have the benefit of. They just restructured their debt when they bought Orbis at the end of February. And they have access to government funding, either at the European Central Bank or at the different nations.
So they have sufficient means to basically weather the storm until the end of the year on some very pessimistic scenario. And we just have our own dialogue with the set of investors on if it was to get worse, then we have a board every three weeks with AccorInvest. But as of now, they have obtained sufficient outside financing with no need from the existing shareholder base. On that of Huazhu, you're correct, Richard, on Qi Ji, Jenny, and others talking about the 1,000-1,500 hotels. But you could also say, on the other hand, they've also confirmed they're going to be opening 1,700-1,800 hotels in the same year. For us, the churn is not greater than we had last year, probably below.
Less than 2%.
Less than 2%.
A good number.
Again, what we can't foresee is how many of those owners might not reopen because they might not have sufficient means. That I can't tell you because we're not there yet. But we probably have to expect that hopefully a tiny part of them may not have the means or the will to reopen. But in absolutely no circumstances would we basically inject equity in those different owners, permitting them to reopen. We are asset-light, no intention to go back asset-heavy.
Okay. Thanks very much. And what about the question on deferring fees? I mean, obviously, there's some. You're expecting some loss in the.
Yeah. It's an ongoing discussion with Pierre Boisselier. Deputy CFO Treasury is working quite a bit with the heads of different regions. And of course, there are some cases in which some owners are asking for some postponement of existing fees. You're talking suddenly less than EUR 100-150 million. It depends so much on a case-by-case basis. And it depends so much whether that person is an individual institution, sorry, or whether it is an individual. So Jean-Jacques could pop in. It's only starting with me.
Again, here, I think the answer is unfortunately always the same. We are trying to answer on the basis of what we have in our hands, right? And so on the basis of what we have in our hands today, we don't see a lot of that happening. Now, if you were to take a crazy scenario into which for two years there is no hotel open, you are in a totally different other discussion. And then this will come and ramp up for sure because it's an easy way using working capital to get funding between two partners. And by the way, we could do the same Accor towards our own vendors. And so I think today we don't see it. And then it's a situation that we will closely monitor.
Okay. Thank you very much indeed.
Sure.
You're welcome, Richard.
All right. Our next question comes from Monique Pollard of Citi. Monique, when you're ready, please go ahead.
Hi. Can you hear me?
Yes, we can.
Hi. Good afternoon. Thanks for taking my questions. Just three from me, please. First one, a quick one. Of the 5.2% room openings that we had in Q1 year on year, could you tell me what proportion of that rooms growth was Huazhu rooms? So what was the ex-Huazhu rooms growth? That would be useful. Secondly, could you give an update on your joint venture on sbe? I know you were supposed to be refinancing the debt there, and that was going to materially improve the net income this year. I mean, I don't know if that's already been done because if not, I imagine that would be challenging to look at right now. And then finally, really helpful slide 16, where you give the proportion of the guests that are domestic versus international.
What I was trying to understand is in markets like China, where you're starting to see things open up and obviously without any international travel, do the hotels that were more focused on international, are they able to still attract domestic traffic as well?
Great question. So let's go first, Jean-Jacques, on the first question on Huazhu.
The Huazhu, the number is about 30%.
Got it.
Okay. That's easy.
On SBE, we told you for the last four months that, I guess, all those non-consolidated joint ventures deemed to be consolidated and strategic. And we started with, of course, with Mama Shelter with 25hours. And SBE is part of all the discussions. There are two discussions undergoing. There's one discussion on basically making sure, I guess, we respect all the debt covenants of SBE and all negotiations with existing junior debt preferred debt lenders of SBE that we know of. It's not no surprise here that, I guess, we are currently in a context of closing and signing. And then there are the ongoing discussions on taking full ownership or partial ownership, but majority ownership from Sam Nazarian. But it's not done yet. And on domestic versus international, Monique, you're absolutely correct.
It is the greater if you go up the ladder when you go from economic to luxury. In many cases, luxury hotels have higher than 50% international clientele. And if you were to take the Raffles of the world, that could be like a 70% international dependency. So it is true that, I guess, you'll have better results, better occupancy on the Ibis, Novotel, Mercure, and likely Pullman of the world that, I guess, you would have on the Fairmont, Sofitel of the world. So as expected, and that was part of the question that Jaafar was asking, we're not accounting for any international clientele in the coming months since we're expecting the borders to remain closed.
Great. Thank you.
You're welcome.
Okay. Our next question comes from Vicki Stern of Barclays. Vicki, when you're ready, please go ahead.
Hiya. Hi. I've got three questions. Just circling back on the fees that you mentioned, I know it's obviously very early days, but some discussions around possibly deferring fees. Just curious, I mean, has it come up at all from any of the owners about actually reducing fees and not just deferrals, but potentially sort of sharing some of the pain through a lower actually contractual fee agreement? Secondly, just back on the balance sheet, obviously noted your comments earlier. Just around the rating agencies though, I think I had in mind something like a two and a half to three times level that they have in mind for the investment-grade rating. Just can you comment on any discussions you might be having there, how we should think about that?
And just then, sort of back on the reopening, I guess, hotels have reopened pretty quickly in China just despite quite low levels still of occupancy. Just how are you thinking about how owners would likely reopen the hotels? Obviously, there's a level of occupancy below which it just doesn't make any sense. Just I suppose, do you think it would look the same in other regions as we've seen in China in the sense of sort of phasing of reopening? Thanks.
You know what? As much as we've been having some discussion, as I said, and Jean-Jacques confirmed that we don't have the magnitude of it yet, where owners and again, it's so different in between different cases and different countries in which they owe us any money and they are incapable of paying it from the last quarter of last year or the months of January and February in which they had occupancy. We're obviously sitting down with them and trying to find a solution, but as we said, tight cash is king, so whatever we do with the cash has to be not only bulletproof, but I guess we want and we will keep as much as we have because we need it. In terms of reduction, no, it's not the case. It's absolutely not the case.
I can tell you for a fact that, I guess, and it has to do with the ALL Heartist, with what we do with the medics, how we make Accor available for those who need the most. It's never been a greater, better time for Accor in terms of brand positioning, in terms of values, in terms of engagement, in terms of local community connection, in terms of national health authorities. A lot of people don't want to leave the Accor family. They are extraordinarily proud of what Accor displays locally in the times where Accor is weak. So no, there's no discussions on reduction of fees from any sizable owners. On investment, I'll go back on the reopening, and then Jean-Jacques will go on balance sheet and investment grade. On the Vicki, you're correct. And Chinese owners in America and Chinese owners in China, sorry.
Yes, the 95%, actually, 100% of them have decided to reopen their hotel independent from hoping for 40% occupancy. They know exactly what they're doing. They are pretty expert on their whole market, and they decided to reopen. You would see different behaviors for sure when it comes to North America, when it comes to certainly France for that matter, in which you will see probably some of the owners, if it's likely to be below 20%, I think they will not reopen, and that's okay because that means lesser supply and better benefit for those who actually are daring more, but you'll see that in a much greater magnitude, Vicki, for a lot of non-branded independent mom and pops, which is a vast majority of our competitive set in virtually all jurisdictions.
Many of them will not reopen either because they don't have the capacity or because they can't face having cash losses when we open. So we might be better off in that scenario. On rating?
Just on rating, I mean, as you've certainly seen, I mean, the rating agencies are very active lately. They have been looking at our industry, but they have been looking at many industries quite closely, and so we're talking to them. We'll talk to them about those results in the next 24 hours, giving them, answering everything and making sure that they have all the information that is in their hand in order to make their best assessment. The only thing also that I can say on this one is that they revised the outlook. S&P did revise the outlook, and again, it's public data.
So, sure, you've seen that, too, negative for Accor in the last 30 days. And again, it's probably part of a more general process than everybody is going through lately. And I'm sure you've seen that many of our peers have been downgraded quite significantly. So we do and talk to them, share, make sure that they have the best information, and then they do what they have to do.
Just to add, and I guess with the risk of being contradicted by Jean-Jacques, which is on my left here, is 90% plus of the facts being given to our rating agencies last 30 days when they've issued their opinion are still absolutely valid, correct, of no surprise. So 90% plus of all what we announced tonight, they knew all of it, including forecast for the rest of the year.
So there's no excess negative news on what's being discussed tonight and no surprises for them at all. Yeah. I mean, the difficulty, as you know, is not so much the current year. It's how fast does it rebound and how does it rebound? Because again, the assessment which is done is not a sparse assessment. I mean, the rating agency is much smarter than that, and they look at the global perspective, obviously. And so that's the difficulty that we all have, i.e., how is this situation going to improve? How fast is it going to improve and recover?
Very clear. Thanks very much.
You're welcome.
All right. We have two more questions in our queue. Take them at this time.
Yeah.
All right. Our next caller is Dan Wasiolek of Morningstar. Dan, when you're ready, please go ahead.
Hi, guys. Thank you for taking the question. Kind of more of a maybe longer-term structural question here, but I don't know if you've been having conversations maybe with executives in kind of assessing if there might be any long-term change to corporate travel demand just given the shelter-in-place ends globally and maybe people getting more accustomed to using video conferencing. Just maybe any thoughts that you guys are having around corporate travel long-term and then any numbers maybe around group booking cancellations and rebook trends for maybe later this year or in 2021. Thank you.
An answer is easy on the group booking. It's one of the areas where you have the largest uncertainty. It's not really on when countries are going to be deconfining, which is likely to be between May and end of June in many, many of our countries that we know of. But we also know that in many of the same countries reopening for business, they will still have draconian limitations on groups. We don't know what is the number, and that number will vary in between jurisdictions. But it could be as low as 50, and it could be hopefully a couple of hundred or 300, which means that could be for a period that we don't know of, which could be another six months, could be until year-end.
So any what we call MICE business in large corporate banqueting venues and facilities is the one in which you have the largest unknown and in which you have to prepare for the worst because it's obviously the one that's going to be the most impacted. That's not a big niche of Accor, but you have to be mindful of this. The second question, which is why the first, that one is much more difficult. You have to rethink. You have to reassess your business model, your clients' population by age, by nature, whether it's corporate travel, whether it's leisure, whether it's domestic, whether it's international, because things will change. No question. The one thing I'm not buying is you may see people traveling less because they get accustomed to be far more efficient working from home and probably limited necessity to travel, which obviously has impact on corporate travel.
Anybody who's been telling me that people get accustomed to video conference and everything's going to do by video. I heard that for the last 12 years I've been in business. God knows 10 times with the same nature, people being vocal after September 11, after terrorist attack, after SARS, after Ebola. That plate being served to me so many times. It might be more impactful this time, but on this one, I don't buy anybody you can talk to. I'm telling you that the level of concentration on a video or a conference call is twice greater, and you're missing all the body language, and when it comes to negotiations, it's mostly impossible to negotiate any large transaction negotiation by video or conference call, so I'll be more bullish on this one, but I can't tell you.
Give us the benefit of 12 months passing to get a better granularity on this.
Okay. That's very helpful insight. Thank you.
Thank you.
All right. Our next question comes from Jarrod Castle of UBS. Jared, when you're ready, please go ahead.
Thank you. Good evening, gentlemen.
Good evening.
Three as well. Hi. Maybe one for you, Jean-Jacques. You're obviously putting in place a lot of measures. Will some of that go through an exceptional line? Are you thinking in terms of putting through an exceptional item? Secondly, you're obviously in crisis mode, but any thoughts in terms of.
You're being cut out, Jared.
Medium term. I mean.
Is that a bit better?
It is better. Sorry, again, medium term. Yeah.
Yeah. So your medium-term target for 2022, I take it that will be revised, but any kind of thinking in terms of opportunities and kind of medium-term strategy? And I guess slightly linked to that, I mean, would Accor be open to opportunities in terms of M&A that might or might not arise? Thanks.
I'll answer quickly, and I have to apologize if there's any further questions for me because I need to jump on a different conference call with the health authorities here in France. So sorry to do that on you. On medium-term 2022, we simply don't know. Going back to Jaafar's question, we are preparing for the worst. It's going to be longer than six months. It could be 18 months. It could be three years. But I am a half-full optimist guy. Market will recover. The tourism industry is absolutely not dead. It's probably going to be working differently. But coming, hopefully for me, end of 2022, we will be back at a reasonable level of 2019. It could be 10% or 20% below, but I'm a bit more optimistic. But it's going to take that much time to go back to where we are.
And again, with the risk of being wrong, but I guess I'm going to be planning for greater market penetration. The reason why I say that is if you believe Accor is impacted, wait until you see all our not our peers, but wait until you see the industry at large in terms of ability to the tens of thousands of existing supply hoteliers not being able to respond and not being able to survive. So the cards are entirely reshuffled in the entire industry of travel and tourism. That's true for car rental airlines, hoteliers, bar, café, restaurant, museum. You know it, and I know it. So too soon, but of course, you'd better watch what's happening around you. And Accor has the size, the skill, the talent to navigate in those troubled waters. When it comes to M&A, no, we're not open. We're digging with discipline, prudence, cautiousness.
That time may come, but it's certainly not now.
Yeah. And in terms of the exceptional item that you may have here, I mean, one of the good things in that crisis and that the slide that Sébastien showed on all the governmental actions which have been taken, and that's really helpful because basically it helps us being subsidized on keeping the employee on our payroll, which is the best, I would say, recipe to be able to rebound. So there is no major restructuring plan that we need to account for or something like that at this stage. I think that's one element. And then the other element that could be going your way is do I need to do any kind of write-off or significant revision? I'm not at that stage. I think we need to go and let a little bit more of the year flow through.
When we're going to be in the second part of the year, we'll have much more visibility on what is the future and then readapt all the business plan of all the things that are on the balance sheet. Today, there is nothing that I can foresee.
Okay. Thanks very much.
Sure.
All right. And our final caller is Luigi Algisi of Wells Fargo. Luigi, when you're ready, please go ahead.
Hi. Thanks for taking my questions. My first question would be on the way hotels are operating in China, and if I would be interested to hear if there are new procedures or higher level of deep cleaning, some sort of new things you need to do or costs you need to have to operate hotels, and that we could see here in Europe as well when the hotels reopen. And the second question is if you would consider not paying the coupons on the hybrid bonds to save additional cash.
I mean, the second answer is no. So that's clear. I have the balance sheet that we described, and the last thing I want is to go those kind of routes. So no. And then as far as the measures, yes, you mean. You may have seen that we want, and we've been working on developing a certification with other hoteliers in France on what is required in the new world in order to make sure that you've got safety levels which are increased. So it means the mask thing, the gloves, getting some cleanup of all the surfaces with an increased rhythm. It also means limiting the physical contact and much more using your phone in order to do things. It means being able to capture the temperature of the people entering and going out. So all of that is ongoing.
You should see things coming up on that subject in the coming weeks. I mean, we are working on developing those procedures. You're absolutely right. There will be at least that change coming from that crisis going forward in our businesses because people are much more conscious today of the washing your hands signage that you've seen for 100 years in the kitchen and that were never really fully applied by everybody in the world. I'm not talking our industry. I'm talking in generic terms, my kids and so on.
That's where we are. Anyway. Sorry, sir.
No, sorry. Thanks very much. Maybe just a very quick follow-up, and is there any service you may not be able to provide within hotels, like room service or food?
The portion which is the most difficult is the one where you've got physical contact, obviously. So food is the one where you need to probably rethink how you dispose of the tables, how you do the service and things. Sébastien was alluding to that before, but it's part also of the pleasure of people going to hotels and to be able to have a good dinner, and so we'll have to figure out a different way of doing things, but I personally don't foresee that this is something that people are going to forego.
Understood. Understood. And maybe a very, very quick one last one for me.
Sure.
In your talks with the owners around the world, what sort of I mean, how is the leverage situation of all those owners? I appreciate that obviously a lot of different situations, but what sort of leverage levels do you see with the owners?
That's a very wide question. What I would say is that in the industry, you've got various categories of people. You've got sovereign funds, and they don't really have problems. And then you've got, or much less, then you've got funds, VCs or private equity and these kind of things, which again have a much different situation than the one who are struggling the most, which are the very small franchises. So the people who are struggling today are the people who have the smallest, I would say, financial resources, people who own one hotel or two hotels and not necessarily the best-performing hotels in the world. So these are the people that struggle the most.
Okay. Thank you.
Sure.
This concludes today's question and answer.
Excellent.
I will turn the call over to your hosts.
Thank you. So I think we're done. So thank you very much again for your time, for your questions, and hopefully we've helped you understand better our business, and we look forward to meeting you and talking to you. Meeting you, I don't know, but talking to you for sure for each one, and I would love that I would be able to meet you all. Bye-bye.
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