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Holiday Inn owner points to recovery after first half slump
INTERCONTINENTAL Hotels said on Tuesday it was seeing some "very early" signs of improvement in demand after the Holiday Inn-owner's revenue more than halved and profit slumped 82 per cent in the first half of 2020.
IHG, whose other brands include the Crowne Plaza, Regent and Hualuxe hotel chains, also underlined that it had limited visibility on when the travel market would recover after six months that have seen billions in business travel and holidays cancelled due to the pandemic.
"The impact of this crisis on our industry cannot be underestimated, but we are seeing some very early signs of improvement as restrictions ease and traveller confidence returns," chief executive officer Keith Barr said.
In line with other major hotel operators, IHG's revenues in the six months to June 30 dropped 52 per cent to US$488 million and adjusted operating profit was US$74 million, down from US$410 million a year earlier, as the group strove to cut costs and get hotels up and running again.
However, it said there were "small but steady" improvements in hotel room revenues (RevPAR) - a key gauge of performance for the hotel industry - with July RevPAR seen down 58 per cent after a near 75 per cent slump in the second quarter.
Shares in the company, which have fallen around 20 per cent this year, were up as much as 4 per cent by 0722 GMT.
Some major hotel operators around the world, such as Europe's biggest hotel group Accor, Premier-inn owner Whitbread and Hyatt Hotels, have resorted to staff cuts to stem a rise in costs as they battle one of the worst downturns in the hotel industry.
IHG said it was on track to reduce costs in its fee business by about US$150 million this year.
The company did not propose an interim dividend and said it has total available liquidity of US$2 billion. REUTERS