Accor SA

PAR:AC

Earnings Call Transcript 2020-Q1

[Operator]

[Operator Instructions] I will now hand you over to your host, Sébastien Bazin, Chairman and CEO, to begin today's conference. Thank you.

[Sébastien M. Bazin, Chairman & CEO]

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 #4, where you have the global map of the world, which you obviously see first with the red dot 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, and mini centers owners for insurance and other reasons wants the hotel to be maintained open even though there is no occupancy. If you want to have a precise number, 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 5 big regions for Accor. Europe, we have 2,330 (sic) [ 23,330 ] hotels being closed out of 30,545, which is 77% of the hotels are closed. In Asia Pacific, 311 of hotels are closed out of a network of 1,225. Only 25% of the hotel are closed. Notice is made that 100% of the hotel in China are today back and reopened. South America, 277 hotels are today closed out of a network of 397, which is 48% -- 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 hotel being closed out of a network of 296, i.e., 46% being closed. And North America and Canada, 89 hotel 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 #5. What you have here is, obviously, the 2 column. On the left column is something which all of you know to the risk of being dead drunk 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. And you have -- in addition to what the national government may and might do, you have liquidity being provided by the 2 major central banks. The European central banks, which is today offer EUR 1.1 trillion; and you have the Fed injecting EUR 2.3 trillion as of the last few days. Of course, those numbers varies 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. And you have a lot of reimbursement deferral of booking cancellation. Again, varies quite a bit in different geographies. Indirect support subsidies for the furlough. As you know, Accor has furloughed 210,000 employees under Accor branch. And of course, they've been stipulated over the last few weeks. It's -- not only varies, but it is extraordinary different in between workers in Continental Europe being maintained at 85% plus of the last month salary, and in other jurisdiction being as low as 20% of what you could have been compensated at the week before or the month before. And you have a progressive deconfinement being done in different countries. You know it's been happening in China. It's been happening in the last 4, 5 days in South Korea. 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 on those. What experts do say is the international tourist arrivals in the world likely to be down between 20% and 30% in 2019. I'm assuming that, that 20% to 30% is on an asset of 1.5 billion, which is a number of international travelers that we have experienced in 2019. That number may be low, by the way, because if we don't reopen any frontiers, my assessment would be probably more bearish than what I see from -- I believe it's WTTC. On the next page, which is Page 6, you go on 2 columns as well. Title says -- and we've been saying it quite a bit on -- the asset-light profiles 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 22 without accounting for EUR 1.2 billion of an existing revolver credit line in which we had successfully renegotiated and obtained waivers or, i.e., holidays, on any 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, and we can go back on your Q&A. We -- Jean-Jacques and myself, we, of course, have been trying to adapt as quickly as we could the reduction of the cost, trying to offset the drastic expected fee reduction when it comes to sales, marketing, distribution and loyalty, how could we and 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 1/3 by 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. And 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 the guests 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?

[Jean-Jacques Morin]

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. But let's start on Page 8 with the Q1 2020 takeaways. On the RevPAR, the business update, so in terms of business update, RevPAR was down 25.4% over the quarter. And we've a point in March, which was 62.7% negative. 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 room in Q1, which means that our pipeline was stable at 2,000 or 8,000 room -- 208,000, sorry, room. These numbers, this business, translates into the following financial at revenue level. We have a group revenue at EUR 768 million, i.e., a 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 EUR 150 million. I'll detail that later on. If 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 opened 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 Jan. And then in the U.S., we launched 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 remain 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 of -- some owner may cite difficulty to finance new projects. Some building works are being delayed as we see it. So that will affect the room growth. And so probably, we should see -- we would see a number for the full year 2020 which is going to be below the 5% guidance that we have 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. So moving to the next page, you have here the overview of the RevPAR for the key geographies. So Europe and Asia Pacific account for close to 75% of the business than the rest of the world and the -- than the total group. And you see very well on those curves the dynamic of the pandemic, which started in Asia Pacific, hence the number in Asia Pacific at minus 34% is the worst. Then it came to Europe, where you are at minus 23.2% for the Q1 '20 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 minus 68%. The RevPAR, in fact, in March was still very negative at minus 53%, but we see a little bit of improvement in the occupancy level, which is the sign of what you can read in the press, in the news, i.e., that there is some turnaround there. And so the occupation 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 element in Asia Pacific, you've got Australia, which posted 18% RevPAR in Q1. And again, here, it reflects the fact that the pandemia 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 1 month later at the end of Feb for most countries. And you see France posting a minus 22% RevPAR, Germany posting a minus 25% RevPAR, the U.K. posting a minus 22% RevPAR. So everybody is in the same ballpark. And in each of those countries, lockdown were put in place at about the same time, somewhere between the 17th of March for France. And for the U.K., it's 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 province or between Paris and the province. 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%, and again because of the lag in pandemic spreading at this juncture. And there is nothing quotable on the mix by segment. This is across segment. This is across 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 minus 15.8% like-for-like growth. The reported growth is at 17%, and there is a 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 the like-for-like basis. I mentioned a 25.4% RevPAR, so 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 is a very sharp drop of minus 35%. I'll detail that in the upcoming slide. And you see, on the other hand, the service to owner remainder of hotel asset -- hotel services, sorry, which only shows a decrease of 8%, hence the average at 17.5%. And the reason for that is that STO, service to owner, as you may recall, is done of 2 buckets. One is sales, marketing, distribution and loyalty, and this one has been behaving just like the RevPAR decline, as you would expect; and then you've got reimbursed cost, which is the people that we have in hotels and that are, in fact, that we carry in the hotels that are not our people. And so we basically have those costs in the period and get the revenue for the same amount to the euro in the same period. And so those people were only furloughed at the end of March, and hence, there was not such a decrease of the reimbursed cost year-on-year. Hence the fact that STO in average was only down 8% when the RevPAR was down 25%. A little bit of technical explanation, but this is quite significant variances to be explained. As for hotel assets, it's much easier. It's essentially -- the numbers reflect the geography. As I told you, Australia and Brazil have been enjoying a relatively milder pandemia up to now, hence the relative resilience of the number in hotel asset, essentially Australia and Brazil. New business is down 13.8%. Nothing here to report. And 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 franchisee 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 region 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 the 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 accounts give you an update of the COVID-19 effect and 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 measure that Sébastien summarized at the beginning of the page. 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 topping up in the months of April, May and June. Another thing that we would like to help clarify in 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 1 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 -- 1 point of RevPAR is equivalent to EUR 7 million of EBITDA when you are on positive RevPAR in a bracket of 0% to 3%. And then that you are at minus EUR 12 million when you are on a RevPAR which is negative, again, in a bracket which is 3% to 4% to 5% of negative RevPAR. So that's about the rule of thumb that we've been using. They don't really apply anymore when you are in extreme RevPAR drop environment like the one we face. 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 Market Day in 2018. This model is based on the following cost structure. Management and franchise holding costs grew with inflation. Sales, marketing, distribution and loyalty costs, which are part of service to owner, our expense 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 our true pass-through. I get reimbursed for the amount of payroll that I have to pay to the people that were 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 Mantra. So now how does the RevPAR variation we are facing affecting 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 the regular licenses of Microsoft and you still have your depreciation for the system that you've been developing. When I turn to M&F on holding costs, so management and franchise holding costs, instead of letting them grow with inflation, we are taking actions. And Sébastien mentioned the EUR 60-plus million reduction that we're going to do on those costs, and those costs are essentially the headquarter 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. And just on the last point, which is Mantra. We did mention to you back in February a EUR 40 million impact for 10 points of RevPAR when we published the year-end accounts, so that's about EUR 4 million for 1 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 implement -- you see through the implementation of the appropriate cost savings as we've been developing the plan, our best estimate today is that for 1 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 are being able to be interpreted, and we will diligently work on the cost reduction plan. With that, I leave the floor to Sébastien for some closing remarks.

[Sébastien M. Bazin, Chairman & CEO]

On the page after, again 3 columns. On the first one, which is, as a matter of introduction and background, many of you know that -- and I did allude to on the 200,000-plus employees being furlough between the 22nd of March and the 1st of April. Considering that decision, which was not only drastic but extraordinary quick to be activated because it took us 10 days for those people not to be back at work exactly 1 week after being noticed, the Board decided to have that 25% of the nonpaid dividend, i.e., EUR 70 million, dedicated in, what you see in orange, the ALL Heartist Fund. That EUR 70 million, which is column #2, 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 compliance, 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 1.5 months as opposed to every 5 to 6 weeks. So do we with the Executive Committee, of course, of this company. All of that by a visual 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 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 owners of Accor, 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. So 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. So in Canada, 70% or mostly all the Fairmont Hotels occupation last year has been 70% Canadian nationals. Number is extremely high for America, which is 97% of our guest profile in America happened to be Americans. 75% in Brazil. You see a bit less 66% in the U.K. And you see Germany and France kind of actually 53% and 64%. Be minded, 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 or from Belgium, from Spain, for that matter. So huge domestic and huge intra-continent. A 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 reopen. It's -- today, 97% of the traffic we have, of course, in China is made of Chinese nationals. And lesson there is because, as you know, we still have a 5% participation in Huazhu, which is our 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 we opened 2.5 weeks ago. So certainly, quicker, better and faster in the economic affordable segment. And 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, but we opened 10 days after Huazhu. And Indonesia, 71%. And Australia, of 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 it 1 minute, as you know, we have 67 million people in France, likely not going anywhere else other than France over the last -- over the next 60 days. France is such an extraordinary country. There is a number of opportunity 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 3 forwards here which is -- means looking at. One is caring, caring for somebody. This is 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 are 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 proof 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, weekly -- 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 -- goes without saying, shareholders, is we 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 the 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 determent to your business, and you need to be an actor and 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.

[Operator]

[Operator Instructions] Our first caller is Jaafar Mestari of Exane BNP Paribas.

[Jaafar Mestari, Analyst]

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? That's my first question.And 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? And is that committed marketing costs that you'll definitely not be spending? I did get a couple of e-mails suggesting I watch videos on the ALL websites.

[Sébastien M. Bazin, Chairman & CEO]

I'll let -- I will leave Jean-Jacques answer the question #2 and question #3. And just on question #3, as I said to you, we want to keep the phone going and relationship with the 63 million Accor Live Limitless members. It doesn't cost a penny to basically send them basically a 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 gymnastic and other things. So as I guess, we keep contact in a different fashion. So on the -- and we need to do it. 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 our core 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. So -- and so hopefully, the turns -- it's 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 that's the -- but we're prepaying for the worst, of course. EBITDA?

[Jean-Jacques Morin]

Yes. On -- 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 are 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 review 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 situation. So it's going to be something that we're going to further push with time.And then on ALL, 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 credit card, Jaafar, we're going blind. We're going dark, sorry, on all the promotion and marketing campaign as we have announced in probably late March. Is -- on the credit card, you'll be surprised, talks are still undergoing with Visa, of course. But with ALL, the RFPs were being 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 no -- 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.

[Jaafar Mestari, Analyst]

And maybe just a quick follow-up on your -- what you say about the worst case. If I do very quick math, EUR 150 million for the next 9 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?

[Sébastien M. Bazin, Chairman & CEO]

Well, the -- what we're doing is, obviously, we've done all those mathematics. It tells you that, I guess, we can go much further than 9 months with the cash we have, which is also why we renegotiated the covenant with the holiday on any ratios with the commercial banks on a EUR 1.2 billion debt. So we have far sufficient time to basically cope with what could be 9 months, 12 months. And then we'll see -- 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 know that vaccine is at least 18 months to 2 years away.

[Jean-Jacques Morin]

Yes.

[Sébastien M. Bazin, Chairman & CEO]

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 this. So -- 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.

[Jean-Jacques Morin]

And 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. So it'll be EUR 151 million, be EUR 150 million.

[Operator]

Our next question comes from the line of Jamie Rollo of Morgan Stanley.

[Jamie David William Rollo, Managing Director]

Three questions, please. First, just on cash. Could you please give us the March -- end of March or even current cash number so we can calculate what we 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 EUR 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 EUR 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?

[Sébastien M. Bazin, Chairman & CEO]

JJ will do the first 2, and I'll do the third one.

[Jean-Jacques Morin]

Just on cash, Jamie, you -- 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 forecast, 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 are to say that in the month of March, EUR 150 million 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 are shaped 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. EUR 150 million to EUR 200 million is a good number. EUR 150 for the month and EUR 200 million for the quarter.In terms of the bridge of 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...

[Sébastien M. Bazin, Chairman & CEO]

Management and franchise. You keep saying it on service. Management and franchise.

[Jean-Jacques Morin]

You're right, Sébastien, Management and franchise. Then I gave you what is the hotel assets, and so the remainder is STO, i.e., sales, marketing, distribution, loyalty.

[Sébastien M. Bazin, Chairman & CEO]

And on the last, which is the pipeline, I'll give you 2 numbers because one is coming from the 125 developers, who being -- telling us that, I guess, we still -- we should be looking at a 3%, plus or minus, net supply growth for the year. That number is being revised downward over the last 3 months, of course, but it's still pretty optimistic on the 3%. The numbers 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 or minus that the developers are talking about, 0.5% of that is what they call instant noodles, which is kind of a funny name. The 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, we had quite a few of them, on the people may be 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 you may be -- 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.

[Jamie David William Rollo, Managing Director]

So can I 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?

[Jean-Jacques Morin]

EUR 2.5 billion.

[Jamie David William Rollo, Managing Director]

Okay. And did you say EUR 150 million burn for March alone and EUR 200 million for the quarter? And if so, does that EUR 150 million include all other costs, not just OpEx?

[Jean-Jacques Morin]

Yes. I mean the EUR 150 million is the operating burn, i.e., if you were to do an acquisition, it's not into that, but there was no acquisition. So it's -- the operating free cash flow is -- we burn. If I were to buy a company, this is not in that number.

[Jamie David William Rollo, Managing Director]

Sure. But interest and CapEx makes that a little bit higher.

[Jean-Jacques Morin]

Yes. It is into it. It is into it. Yes. Yes. Your recurring CapEx is into that number.

[Jamie David William Rollo, Managing Director]

Okay. And my question on the STO. Actually, it was slightly different actually, but it was also, what's the exposure to owners being unable to pay? I mean that might come through as a working capital number. But what's your concern there, please?

[Jean-Jacques Morin]

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. It's something to be obviously monitored over time.

[Operator]

Our next question comes from the line of Richard Clarke of Bernstein.

[Richard J. Clarke, Research Analyst]

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% to 1.5% of 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?And then just in terms of keeping those hotels open, I know that the Heartist Fund has got some amount 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'll be willing to take stakes in the underlying hotels to support them staying open?

[Sébastien M. Bazin, Chairman & CEO]

Okay. So we'll go -- I'll go and then Jean-Jacques would 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, is communicated shared at the AccorInvest label, which is evident since we represent 99% of the brands of AccorInvest. They also have their own set of negotiations on thinking holidays from covenants with their own syndicate on the revolver line, which they have the benefit of. They've just restructured their debt when they put all this 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 3 weeks with AccorInvest. But as of now, they have obtained sufficient outside financing with no need from the existing shareholder base.On other words, you're correct, Richard, on the -- [ Qi Ji ], Jenny and others are talking about the 1,000 to 1,500 hotels. But you could also say, on the other hand, they've also confirmed they're going to be opening 1,700 to 1,800 hotels in the same year. For us, the churn is not greater than we had last year.

[Jean-Jacques Morin]

No.

[Sébastien M. Bazin, Chairman & CEO]

Probably below that.

[Jean-Jacques Morin]

Less than 2%.

[Sébastien M. Bazin, Chairman & CEO]

Less than 2%.

[Jean-Jacques Morin]

So a good number.

[Sébastien M. Bazin, Chairman & CEO]

Again, I -- what we can't foresee is how many of those owners might not reopen because they might not have sufficient needs. 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 be open. We are asset-light now, and we do go back asset heavy.

[Richard J. Clarke, Research Analyst]

Okay. What about the question on deferring fees? I mean obviously, there's some -- you're expecting some loss in the...

[Sébastien M. Bazin, Chairman & CEO]

Yes. It's an ongoing discussion with Pierre Boisselier, Deputy CFO Treasurer, is working quite a bit with the heads of different regions. And of course, there is some cases in which some owners are asking for some postponement of existing fees. You're talking suddenly less than the EUR 100 million, EUR 150 million. It depends so much on a case-by-case basis.

[Jean-Jacques Morin]

Yes.

[Sébastien M. Bazin, Chairman & CEO]

And it depends so much whether that person is an individual -- institution, sorry, or whether it is an individual. So it's -- Jean-Jacques could pop in. It's only starting.

[Jean-Jacques Morin]

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 2 years, there is no hotel opened, 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 2 partners. And so -- 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.

[Operator]

Our next question comes from Monique Pollard of Citi.

[Monique Pollard, Vice President]

Can you hear me?

[Sébastien M. Bazin, Chairman & CEO]

Yes, we can.

[Monique Pollard, Vice President]

Just 3 for me, please. First one, a quick one. Of the 5.2% room openings that we had in 1Q year-on-year, could you tell me what proportion of that room's growth was Huazhu room? So what was the ex Huazhu room's growth that would be useful?Secondly, could you give an update on your joint venture with -- 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, a 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, does -- the hotels that were more focused on international, are they able to still attract domestic traffic as well?

[Sébastien M. Bazin, Chairman & CEO]

Great question. So let's go first, Jean-Jacques on the first question on the Huazhu and...

[Jean-Jacques Morin]

The Huazhu, the number, it's about 30%.

[Monique Pollard, Vice President]

Got it.

[Sébastien M. Bazin, Chairman & CEO]

Okay. That's easy. On sbe, we told you for the last 4 months, I guess, all those nonconsolidated joint ventures are 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's 2 discussions undergoing. There's one discussion on basically Mercure. I guess we expect all the debt covenants of sbe and all negotiation 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 the context of closing and signing. And then there is the ongoing discussions on taking full ownership or partial ownership of majority ownership from Sam Nazarian. But it's not done yet. And then on domestic versus international. You -- Monique, you're absolutely correct. It is -- the greater -- if you go up the ladder, when you go from economy 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 will 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 close.

[Operator]

Our next question comes from Vicki Stern of Barclays.

[Victoria Jane Lee Stern, MD & Equity Analyst]

I've got 3 questions. Just circling back on the fees 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, so not just deferrals, but potentially sort of like sharing some of the pain through a lower, actually, contractual fee agreement?Secondly, just back on the balance sheet. Obviously, you noted your comments earlier. Just around the rating agencies there, I think they had in mind something like a 2.5 to 3.0x 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 level scale of occupancy. Just how are you thinking about how owners would likely reopen the hotel? 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?

[Sébastien M. Bazin, Chairman & CEO]

It's -- you know what on -- as much as we've been having some discussion, as I've 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 in different countries in which if they owe us any money and they are incapable of paying it from the last quarter of last year or the month 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, the cash has to be not only bullet proof, 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 be 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 -- 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 home market, and they decided to open.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 if -- 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 nonbranded independent mom-and-pops, which is a vast majority of our competitive set in many 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?

[Jean-Jacques Morin]

Just on rating, I mean as you've certainly seen, I mean, the rating agency are very active lately. They have been looking at our industry, but they've 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 our 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 I'm sure you've seen that, to 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 talk to them, share, make sure that they have the best information, and then they do what they have to do.

[Sébastien M. Bazin, Chairman & CEO]

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 or 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 is no excess negative news on what's being discussed tonight, and no surprises for them at all.

[Jean-Jacques Morin]

Yes. I mean the difficulty, as you know, is not so much the current year, it's how fast will it rebound and how it will rebound because again the assessment which is done is not a sparse assessment. I mean the rating agency, much smarter than that, and they look at the global perspective, obviously. And so perhaps the difficulty that we all have, i.e., how is this situation going to improve, how fast is it going to improve and recover.

[Operator]

Our next caller is Dan Wasiolek of Morningstar.

[Dan Wasiolek, Senior Equity Analyst]

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 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?

[Sébastien M. Bazin, Chairman & CEO]

It's -- I'll answer, it's easier, on the group booking. It's one of the area where you have the largest uncertainty. It's not really on when country is 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 limitation. On groups, we don't know what is the number, and the number will vary in between jurisdictions. But it could be as low as 50, and it could be, obviously, a couple of hundred or 300, which means -- and that could be for a period that we don't know of, what could be another 6 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 ones 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. I -- you have to rethink, you have to reassess your business model, your client's population by age, by nature, whether it's corporate travel, whether it's leisure, whether it's domestic, whether 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 limit the necessity to travel, which, obviously, has an impact on corporate travel. I -- anybody has been telling me they get -- people get accustomed to video conference, and everything is 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 play has been served to me so many times. It might be more impactful this time, but not on this one. I don't buy. Anybody you can talk to are telling you that the level of concentration on video, on 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 conference call. So I'll be more bullish on this one. But I can't tell you. I give us the benefit of the 12 months passing to get a better granularity on this.

[Operator]

Our next question comes from Jarrod Castle of UBS.

[Jarrod Castle, MD, Head of the Travel & Leisure Sector and Co]

Three as well. 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... [Technical Difficulty]

[Sébastien M. Bazin, Chairman & CEO]

You're being cut off, Jarrod

[Jarrod Castle, MD, Head of the Travel & Leisure Sector and Co]

Medium term. I mean[Technical Difficulty] Is that a bit better?

[Sébastien M. Bazin, Chairman & CEO]

It is better. Can take -- start again. Medium term?

[Jarrod Castle, MD, Head of the Travel & Leisure Sector and Co]

Yes. 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?

[Sébastien M. Bazin, Chairman & CEO]

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 in France. So sorry to do that on you. On the -- Jarrod, the -- on medium-term 2022, we simply don't know. Going back to Jaafar question, I -- we are preparing for the worst. It's going to be longer than 6 months. It could be 18 months. It could be 3 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 optimist. 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.

[Jean-Jacques Morin]

Yes. And in terms of the exceptional item that you may have here, I mean one of the good thing in that crisis and that 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 of 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. And 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.

[Operator]

And our final caller is [ Luigi ] of Wells Fargo.

[Unknown Analyst]

My first question would be on the way hotels are operating in China, and it would be interesting to hear if there are like new procedures or higher level of deep cleaning, some sort of new things you need to do or cost you need to have to operate hotels, and that you could -- 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.

[Jean-Jacques Morin]

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 we've been working on developing a certification with other hotelier in France on what is required in the new world in order to make sure that you've got safety level which are increased. So it means the masking, 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, and you should see things coming up on that subject in the coming weeks. I mean we are working on developing those procedure. But 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 that you've signed -- that you've seen for 100 years in the kitchen and that were never really fully applied by everybody in the world. And I'm not talking our industry. I'm talking in generic term, my kids and so on. So that's where we are. Anyway -- go, sorry, sir.

[Unknown Analyst]

No, sorry. 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?

[Jean-Jacques Morin]

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 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 hotel than 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 forgo.

[Unknown Analyst]

Understood, understood. And maybe very, very quick one, last one for me.

[Jean-Jacques Morin]

Sure.

[Unknown Analyst]

And in your talks with the -- with your 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 you see with the owners?

[Jean-Jacques Morin]

That's a very wide question. What I would say is that in the owner, you've got various categories of people. You've got several in France, and they don't really have problems. And then you've got -- or much less. And then you've got France, 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 franchise. So the people who are struggling today are the people who have the smallest, I would say, financial surface, people who own 1 hotel or 2 hotels and not necessarily the best-performing hotels in the world. So these are the people that struggle the most.

[Operator]

This concludes today's question and answer. I will turn the call over to your host.

[Jean-Jacques Morin]

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 meeting you and talking to you -- meeting you, I don't know, but talking to you for sure for H1, and I would love that I will be able to meet you all. Bye-bye.

[Operator]

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