InterContinental Hotels Group (IHG) is expected to recover from a disastrous first half of 2020 during which it suffered a 52% decline in revenue and an 82% decline in profits.
IHG, the owner of hotel brands including Regent Hotels, InterContinental, Holiday Inn, and Crowne Plaza, noted that in recent times, demand for stays at its hotels has been picking up after a lean period caused by the Covid-19 pandemic.
Commenting on the company’s recent upturn in financial fortunes, CEO Keith Barr said, “(We) are seeing some very early signs of improvement as restrictions ease and traveller confidence returns.”
However, Barr also tempered his remarks by noting that the pandemic caused much damage to the industry and that there was no way to foresee how the coming period would unfold for the hotel industry.
Most of the financial losses suffered by hotels during the pandemic occurred as a result of mass cancellations by those who had been planning a stay prior to the enforcement of international lockdown measures.
IHG benefited from a recent improvement in its hotel room revenue figures. Although IHG’s hotel room revenues declined in July 2020, the decline was by 58%, a number well below the decline of almost 75% which it had posted over the course of the second quarter of the year.
Shares in IHG also saw a recent rise in value. This was a welcome turn of events for the company because the value of its shares had been reduced by almost 20% since the start of the year.
Much like other hotel operators, IHG lost a sizable amount of revenue during the pandemic. Its revenue in the six-month period ending on June 30 was US$488 million, which represented a fall of 52%. IHG’s adjusted operating profit over the same period was US$74 million. The same period just a year prior had seen it earn US$410 million.
As a result, IHG has been actively taking steps to reduce costs and revive the fortunes of its hotels. IHG has stated that it expects to reduce its fee business costs by around US$150 million over the course of the year.
IHG currently has a total available liquidity valued at US$2 billion.
12th August 2020 16:33
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