InterContinental cuts staff by 10%

InterContinental Hotels will reduce staff by 10% at the corporate level, its CEO said on Tuesday, after the Holiday Inn owner’s revenue more than halved and profit slumped 82% in the first half of 2020.

InterContinental Hotels (IHG) will reduce staff by 10% at the corporate level, its CEO says, after the Holiday Inn owner’s revenue more than halved and profit slumped 82% in the first half of 2020.

IHG, whose other brands include the Crowne Plaza, Regent and Hualuxe hotel chains, also underlined that it has limited visibility on when the travel market would recover after six months that have seen billions in business travel and holidays cancelled due to the pandemic.

The job cuts, announced internally in July, follow similar moves by major hotel operators, including Europe’s biggest hotel group Accor, Premier Inn owner Whitbread, and Hyatt Hotels as they battle one of the worst downturns in the hotel industry.

“The impact of this crisis on our industry cannot be underestimated, but we are seeing some early signs of improvement as restrictions ease and traveller confidence returns,”

CEO Keith Barr said.

In line with other major hotel operators, IHG’s revenues dropped 52% to $488m and adjusted operating profit was $74m, down from $410m a year earlier, as the group strived to cut costs and get hotels up and running again.

However, it said there were “small but steady” improvements in hotel room revenues — a key performance indicator for the industry — with July down 58% after a near 75% slump in the second quarter.

Shares in the company, which have fallen about 20% so far this year, were up 4% by 11.33am GMT.

IHG, which employs about 400,000 people globally, said it is on track to reduce costs in its fee business by about $150m this year.

Barr said in a call with analysts: “As ever is the delicate balancing act and, as with many companies, this necessary reduction in cost has sadly had to involve looking at headcount across the business.”