IHG said on Friday, October 22, it was seeing encouraging signs of recovery in business and international travel, with strong corporate bookings in the United States as the Holiday Inn owner’s room revenue inches closer to pre-pandemic levels.
The owner of the Crowne Plaza, Regent, and Hualuxe hotel chains said hotel room revenue (RevPAR), a key performance indicator, rose 66% in the third quarter, with the United States down just 7% from 2019 levels after a busy summer season.
“Domestic leisure demand was particularly strong in a number of markets over the summer, where occupancy and rate climbed back to 2019 levels,” chief executive officer Keith Barr said.
IHG said it was encouraged by signs of an uplift in business travel, group bookings, and international trips during September.
Companies in the travel and hospitality industry around the world are recovering from the pandemic, as higher vaccination rates and an easing in restrictions spur an uptick in business and leisure travel.
However, renewed lockdowns due to the spread of the highly contagious Delta variant, together with pre-flight COVID-19 tests as well as remote work options, still pose a significant constraint for the sector.
Revenue in IHG’s Americas region, which account for the bulk of the group’s revenue, rose 76% in the quarter and was down 10% compared to 2019.
In China, like other hotel operators such as Marriott International, IHG saw a hit in August from new restrictions.
IHG shares were down 1.5% by 0725 GMT, with Citi analyst James Ainley saying it reflected the company’s underperformance as compared to industry data.
“[IHG’s] key Crowne Plaza and Holiday Inn brands in particular are weak relative to their segments,” Ainley added.
IHG has been reviewing around 200 Holiday Inn and Crowne Plaza hotels to save cost and position itself for growth post COVID-19. It has exited or confirmed the exit of 90 hotels already, it said on Friday.
It is targeting an additional $25 million in cost savings this year. – Rappler.com