IHG warns of plunge in revenue

Demand for hotel rooms was at record lows, the company behind InterContinental and Holiday Inn hotels said yesterday, as it announced $150 million of cost cuts to help cope with travel restrictions and lockdowns caused by the coronavirus pandemic.

Travel and leisure businesses have been among the worst hit by the virus outbreak, with hundred of billions of dollars in business trips and holidays cancelled as countries impose draconian restrictions to try to curb its spread.

InterContinental Hotels Group Plc (IHG) said it expected the revenue it gets globally from hotel rooms (RevPAR) to plunge by around 60% in March, with steeper declines in markets that have gone into lockdown.

It said cancellations for April and May and current booking trends pointed to continued challenging conditions, but added it had begun to reopen hotels in China, where the virus emerged.

IHG operates more than 5,900 hotels worldwide, with nearly 900,000 rooms across 100 countries. Half of its hotels are in the Americas and 35% in Europe, Middle East, Asia and Africa, while 6% are in China.

The Crowne Plaza, Regent and Hualuxe operator joined hundreds of other listed companies in withdrawing its final dividend and deferring any further decisions on payouts for now.

IHG said it had taken steps including reducing salaries, incentives and “substantial” cuts for board and executive committee members that would save $150 million in costs.