23 October 2020
Third Quarter Trading Update to 30 September 2020
- 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.
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.”
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 nearly 6,000 hotels and 890,000 guest rooms in more than 100 countries, with approximately 1,900 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. Approximately 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
Conference call for analysts and shareholders
A conference call with Paul Edgecliffe-Johnson, Chief Financial Officer and Group Head of Strategy, will commence at 9:00am (London time) on 23 October 2020 and can be accessed at www.ihgplc.com/en/investors/results-and-presentations.
For analysts and shareholders wishing to ask questions, please use the dial-in details below which will have a Q&A facility:
There will be an opportunity to ask questions:
UK local: +44 (0) 203 936 2999
UK: +44 (0) 800 640 6441
US: +1 855 979 6654
All other locations: +44 (0) 203 936 2999
Participant Access Code: 19 66 11
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: 85 10 72
For further information, please contact:
Stuart Ford; Rakesh Patel; Kavita Tatla:
+44 (0)1895 512 176
+44 (0)7527 419 431
Yasmin Diamond; Mark Debenham:
+44 (0)1895 512 097
+44 (0)7527 424 046