Third Quarter Trading Update to 30 September 2020

Highlights

  • Group Q3 RevPAR down 53.4%; continued outperformance in key markets; YTD down 52.3%
  • RevPAR reflects a 30%pts reduction in occupancy YoY, with rate holding at ~80% of prior year levels
  • Occupancy improved to 44% from 25% in Q2; 199 hotels (3% of estate) remained closed at 30 September
  • Net system size growth of 2.9% YoY; global estate now 890k rooms (5,977 hotels)
  • 11k rooms opened (82 hotels), 23k YTD; 6.7k added across mainstream brands, 4.2k in upscale and luxury
  • Signed a further 14k rooms (82 hotels), 40k YTD; total pipeline now 286k rooms (1,899 hotels)
  • Fee Business costs on track to reduce by ~$150m in 2020; targeting half this level to be sustainable into 2021
  • Positive cash flow in Q3, leading to total available liquidity at end of September increasing to $2.1bn
  • After issuance of new bonds and partial repayment of 2022 bonds in early October, on a pro forma basis, liquidity increased further to $2.9bn

Keith Barr, Chief Executive Officer, InterContinental Hotels Group PLC, said: “Trading improved in the third quarter, although progress continues to vary by region. RevPAR declined 53%, compared to a 75% decline in the prior quarter, while occupancy was 44%, up from 25% in Q2. Domestic mainstream travel remains the most resilient, and our industry-leading Holiday Inn Brand Family positions us well to meet that demand as it slowly returns. I want to thank all our incredible colleagues and hotel owners for their dedication to creating a clean, safe stay experience that every one of our guests can count on in these uncertain times.

Despite the challenges we’ve faced, we have continued to open new hotels and sign more into our pipeline. This is recognition of consumer preference for our brands and strong owner relationships, and also the long-term attractiveness of the markets we operate in and the relative resilience of our business model. We signed 82 hotels in the quarter, taking us to 263 year-to-date, more than a quarter of which are conversions. As we continue to invest in growth initiatives, we do so with a strict focus on cost reduction and an unwavering commitment to act responsibly for our people, guests, owners and local communities.

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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. Our actions have resulted in ongoing industry outperformance in our key markets, and we remain focused on leveraging the strength of our brands, scale and market positioning to recover strongly and drive future growth.”

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