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Holiday Inn owner says business is worst ever
[LONDON] Holiday Inn owner IHG said on Friday demand for hotels was currently at the lowest levels it had ever seen, announcing a series of measures to cut costs and ride out the worldwide shutdowns and travel restrictions caused by the coronavirus.
The hotel group, named after its Intercontinental chain, said it was withdrawing its final dividend and deferring any further decisions on payouts for now, while also cutting capital spending by around US$100 million compared to 2019.
It has US$1.2 billion in undrawn cash available under a revolving credit facility if need be, it added, as companies look to their financial reserves to ride out a crisis that threatens to continue into the summer.
IHG said it had taken decisive action across the business, including reducing salaries, incentives and "substantial" cuts for board and executive committee members, that would save US$150 million in costs.
"Cancellation activity for April and May, and current booking trends, indicate continued challenging conditions," the company said.
"In Greater China we now have 60 hotels closed compared to 178 at the peak, and in recent days have begun to see improvements in occupancy, albeit at low levels."
Tourism and leisure businesses have been among the worst hit by the spread of the coronavirus as governments across the world restrict movement of people to contain the spread of the highly contagious respiratory illness.