07 May 2020
First Quarter Trading Update to 31 March 2020
- Group Q1 comparable RevPAR1 down 24.9%; March down 55%; April expected to be down around 80%
- ~15% (~1,000 hotels) of the estate closed as at the end of April; ~10% (~440 hotels) in the Americas, ~50% (~560 hotels) in EMEAA and ~2% (10 hotels) in Greater China
- Occupancy levels in comparable open hotels in the low-to-mid 20% range
- 4.6% YoY net system size growth to 882k rooms
- 6k rooms opened, including 1k in March
- Signed 14k rooms (104 hotels) in the quarter, including 4k in March, taking the pipeline to 288k rooms
- Delivering on our cost reduction and cash conservation actions across the System Fund and Fee Business; on track to reduce Fee Business costs by up to $150m and capex by ~$100m; further cost measures to be implemented to manage the business through the evolving trading environment
- ~$2bn of liquidity available; extension secured on $1.275bn syndicated RCF until September 2023 in addition to covenant waivers already in place; £600m (~$740m) of CCFF funding issued
Keith Barr, Chief Executive Officer, InterContinental Hotels Group PLC, said: “Covid-19 represents the most significant challenge both IHG and our industry have ever faced. We are responding on every front and taking decisive action to the benefit of all our stakeholders. Our top priority remains to support our guests, colleagues and hotel owners through this crisis, whilst protecting for the long term and positioning the business for recovery. I would like to sincerely thank everyone at IHG and our owners for the way they have responded to this challenge. This includes protecting the health and safety of guests and colleagues; flexing booking and cancellation options for guests and protecting their loyalty membership status; and repurposing hotels to provide essential activities including accommodation to frontline workers, military personnel and vulnerable members of society. We have been working closely with our owners to help keep hotels open, including advising on adjusting operations, providing fee relief and payment flexibility, and collaborating to secure broader government support for the industry.
Following a solid performance in the first two months of 2020, occupancy levels dropped to historic lows in March and April, as social distancing measures and travel restrictions came into effect around the world. Global RevPAR in the first quarter declined by 25%, including a 55% decline in March, and we anticipate April to be down by around 80%. In the US, our biggest market, our franchise portfolio of 3,750 mainstream hotels has seen lower levels of RevPAR decline than the industry, and as at the end of April we had ~90% of our estate open. Our business is also weighted towards non-urban markets that are less reliant on international inbound travel and large group meetings and events, which provides a level of resilience during this difficult period.
Building on our conservative balance sheet approach, we are delivering on our plans to reduce costs, preserve cash and strengthen our liquidity. We remain focused on managing the business appropriately through this unique period while also positioning IHG to emerge strongly when our markets recover. We anticipate continued disruption to travel in the months ahead, and forward visibility on the timing and shape of improvements in demand remains very limited. We are though still seeing hotel openings including the Regent Shanghai Pudong later this month, and great signings such as the InterContinental in Rome. Progress also continues around the world to build upon the launches of our avid, voco and Atwell Suites brands.
IHG’s response to Covid-19 is centred on remaining true to our purpose and values, and we are taking all necessary actions to manage through the uncertainties and challenges facing our industry. Our strategy is unchanged, and we will look to continue building on the resilience of our business model relative to the industry.”
1 RevPAR growth is on a comparable hotels basis and at constant exchange rates (CER) unless otherwise stated
IHG® (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation with a broad portfolio of hotel brands, including Six Senses Hotels Resorts Spas, Regent Hotels & Resorts, InterContinental® Hotels & Resorts, Kimpton® Hotels & Restaurants, Hotel Indigo®, EVEN Hotels®, HUALUXE® Hotels and Resorts, Crowne Plaza® Hotels & Resorts, voco™, Holiday Inn® Hotels & Resorts, Holiday Inn Express®, Holiday Inn Club Vacations®, avid™ hotels, Staybridge Suites®, Atwell Suites™ and Candlewood Suites®.
IHG franchises, leases, manages or owns approximately 5,900 hotels and nearly 882,000 guest rooms in more than 100 countries, with over 2,000 hotels in its development pipeline. IHG also manages IHG® Rewards Club, our global loyalty programme, which has more than 100 million enrolled members.
InterContinental Hotels Group PLC is the Group’s holding company and is incorporated in Great Britain and registered in England and Wales. More than 400,000 people work across IHG's hotels and corporate offices globally.
Visit www.ihg.com for hotel information and reservations and www.ihgrewardsclub.com for more on IHG Rewards Club. For our latest news, visit: https://www.ihgplc.com/en/news-and-media and follow us on social media at: www.twitter.com/ihgcorporate, www.facebook.com/ihgcorporate and www.linkedin.com/company/intercontinental-hotels-group
For further information, please contact:
Stuart Ford; Matthew Kay; Rakesh Patel:
+44 (0)1895 512 176
+44 (0)7527 419 431
Yasmin Diamond; Mark Debenham:
+44 (0)1895 512 097
+44 (0)7527 424 046
Presentation for Analysts and Shareholders
A conference call with Keith Barr, Chief Executive Officer and Paul Edgecliffe-Johnson, Chief Financial Officer and Group Head of Strategy will commence at 9:00am London time on 7th May and can be accessed at https://www.ihgplc.com/en/investors/results-and-presentations.
There will be an opportunity to ask questions:
UK: +44 (0) 203 936 2999
US: +1 646 664 1960
All other locations: +44 (0) 203 936 2999
Participant Access Code: 703 051
A recording of the conference call will be available for 7 days from 11.30am London time; details are below:
UK: +44 (0) 203 936 3001
US: +1 845 709 8569
All other locations: +44 (0)203 936 3001
Participant Access Code: 795 493