Holiday Inn owner IHG says bookings subdued amid tighter restrictions
Holiday Inn owner Intercontinental Hotels Group (IHG) said bookings remained subdued in the third quarter, as tighter restrictions introduced in September dampened the sector’s tentative recovery.
Group revenue per available room was down 53.2 per cent reflecting a 30 percentage point drop in occupancy year on year.
However, occupancy improved to 44 per cent in the third quarter compared to 25 per cent between April and June, with 199 hotels still closed as of the end of last month.
IHG said revenue per available room in Europe was down 72 per cent in the three months to the end of September as the continent faced a second wave of coronavirus infections, which weakened the improvement seen in July and August.
Occupancy in Europe, Middle East, Asia and Africa (EMEAA) was at 31 per cent for the quarter, while revenue declined 70.4 per cent.
Revenue per available room had begun to improve in July and August as lockdown restrictions lifted before weakening again in September.
IHG chief executive Keith Barr said: “A full industry recovery will take time and uncertainty remains regarding the potential for further improvement in the short term, but we take confidence from the steps taken to protect and support our owners and drive demand back to our hotels as guests feel safe to travel.”
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said that “lockdowns hit hoteliers hard and the pain is not going away any time soon for Holiday Inn owner IHG”.
She said “However, as IHG only owns a handful of its portfolio of nearly 6,000 hotels, it’s fared better than many. While it’s offered support to its franchisees through the crisis, not being on the hook for hotel running costs has certainly helped the bottom line.“
“Still, with more than half of beds not filled, it will be a struggle to keep up momentum, given fresh coronavirus restrictions in some key markets,” Streeter added.
“However the company is still forging ahead with new hotels, opening another 11 thousand rooms in the third quarter. So as expansion continues apace, but the coronavirus lingers, the real test for IHG and its franchisees may still be yet to come.”