Intercontinental Hotels PLC (LON:IHG) swung to a loss in its latest half-year to end June, 2020, though the FTSE 100-listed hotels group said occupancy is improving again after coronavirus (COVID-19) disruption.
The Holiday Inn and Crowne Plaza owner posted interim losses of US$275mln against a profit of US$375mln a year ago with revenues tumbling 45% to US$1.25bn.
In the results statement, Keith Barr, IHG's chief executive, said the COVID-19 impact had been ‘substantial’ with revenue per room (RevPAR) down by 52% over the half-year and by 75% in the second quarter.
Occupancy fell to 25% at the height of the pandemic restrictions, Barr noted. But July saw a slight pick-up, he added, with an expected RevPAR decline of 58%, and occupancy rising to around 45%.
Barr said the group’s managed hotels posted an operating profit of US$74mln despite the challenges but the results were affected by US$255mln of one-off charges and impairments including US$41mln of bad debts.
IHG still expanded during the period and opened 90 hotels despite the pandemic with the estate size now 883,000 rooms over 5,900 hotels and a pipeline currently of 288,000 rooms.
“Together with other measures we've taken to preserve cash, we have maintained substantial liquidity of around US$2bn," Barr added.
“Our ongoing actions to reduce costs include plans to make around half of the US$150mln of savings we will achieve this year sustainable into 2021 alongside continued investment in our growth initiatives.
"As has been the case in previous downturns, domestic mainstream travel is proving to be the most resilient. Our weighting in this segment, led by our industry-leading Holiday Inn Brand Family, positions us well as demand returns in our key markets. In the US, our mainstream estate of almost 3,500 hotels is seeing lower levels of RevPAR decline than the industry, and is operating at occupancy levels of over 50%,” the chief executive concluded.
There is no interim dividend and there won’t be any payment until visibility on trading improves, IHG said.