© Reuters. A general view of the InterContinental Hotel at O2 before the release of the trading statement for InterContinental Hotels Group in the third quarter of 2020, in London, Britain, October 20, 2020. REUTERS / Matthew Childs
By Federico Maccioni and Yadarisa Shabong
(Reuters) – IHG said on Friday it was seeing encouraging signs of recovery in business and international travel, with strong corporate bookings in the United States as Holiday Inn owner room revenues approached pre-pandemic levels.
The owner of the Crowne Plaza, Regent and Huallux hotel chains said revenue in hotel rooms (RevPAR), a key performance indicator, rose 66% in the third quarter, with the US down just 7% from 2019 levels after a busy summer season.
“Local demand for entertainment was particularly strong in a number of markets during the summer, with occupancy and rate rising to 2019 levels,” said CEO Keith Barr.
IHG said it was encouraged by signs of an increase in business travel, group bookings and international flights during September.
Businesses in the travel and hospitality industry around the world are recovering from the pandemic, as higher vaccination rates and the easing of restrictions have led to a significant increase in business and leisure travel.
However, renewed shutdowns due to the spread of the highly contagious delta variant, along with pre-flight COVID-19 testing as well as remote working options, remain a major limitation for the sector.
Revenue in IHG’s Americas region, which accounts for the bulk of the group’s revenue, was up 76% in the first quarter and down 10% compared to 2019.
In China, like other hotel operators such as Marriott International (NASDAQ:), IHG saw success in August from the new restrictions.
IHG shares were down 1.5% by 0725 GMT, which City analyst James Ainley said reflected the company’s poor performance compared to industry data.
“The major brands (IHG) of Crowne Plaza and Holiday Inn are particularly weak for their segments,” Ainley added.
IHG is reviewing nearly 200 Holiday Inn and Crowne Plaza hotels to save cost and position themselves for growth after COVID-19. On Friday, it said it had exited or confirmed 90 hotels had already moved out.
It is targeting an additional $25 million in cost savings this year.
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