Intercontinental Hotels Group PLC (LON:IHG) said it expects its global revenue per available room (RevPAR) to plunge by 60% as demand is “at the lowest levels we've ever seen” as the coronavius pandemic takes a grip, and it plans to axe its recently declared dividend.
In a business update, the FTSE 100-listed firm said that while coronavirus was mostly spread in China at the beginning of the year, global RevPAR dropped 6% in January and February, with a 90% crash in China.
READ: InterContinental Hotels upgraded by UBS as coronavirus "in the price"
However, as the Asian country has now eased lockdown measures, only 60 hotels are currently closed compared to 178 at the peak, with a “low” improvement in occupancy, it added.
The Holiday Inn and Crowne Plaza owner said it has been cutting costs, including “substantial” decreases in salaries to executive staff, saving US$150mln in fee business cost.
In noted that capital expenditure will be US$100mln lower than in 2019 and has dropped the dividend payment announced last month to save another US$150mln.
The company said it has long-term funding provided by a staggered bond, with the first £400mln not due for repayment until 2022, plus access to a US$1.4bn revolving credit facility which still has US$1.2bn available to be drawn.
Shares jumped 15% to 2,745.63p on Friday morning.
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