InterContinental Hotels sees demand slowly returning

At the height of the pandemic, occupancy fell to 25pc, IHG says

Holiday Inn owner InterContinental Hotels (IHG) swung to a loss in the first half of the year but said it was seeing some early signs of recovery in demand.

The FTSE 100 company posted a $275m (£210m) pre-tax loss for the six months to the end of June after revenue per available room – a key industry metric – slumped 52pc to $488m.

In the UK, revenue per available room fell 59pc in the first half and by as much as 90pc in the second quarter as the Government forced hotels to shut during lockdown

Its global hotel estate was just a quarter full in the second quarter.

However, the company, which also owns the Crown Plaza chain, said it was seeing some "very early" signs of recovery in demand in key markets as travel restrictions are eased, with July room revenue expected to decline at a slower pace than June.

But IHG acknowledged that the short-term outlook for the industry remained uncertain, with a rise in virus cases in Europe threatening to disrupt holiday plans and prolong any recovery.

Chief executive Keith Barr said: "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."

"Whilst the near-term outlook remains uncertain and the time period for market recovery is unknown, we are well positioned with preferred brands in the largest markets and segments."

The company scrapped its interim dividend and said payouts to shareholders would be deferred "until visibility of the pace and scale of market recovery has improved".

The move is part of a cost-cutting drive that will see the hotel group make savings of around $150m this year. 

IHG said domestic travel was expected to be more resilient during the crisis, while its Chinese market was performing well with much of the economy reopen.

Shares rose 3pc to £41.22. The stock was trading above £51 before the crisis hit.