InterContinental Hotels Group is delaying renovations across its portfolio as part of a raft of measures as it seeks to cut costs during the Covid-19 pandemic.
The hotelier reported that its global RevPAR decreased by 6% across January and February, due to an almost 90% decline in greater China in February offsetting a broadly flat performance in the US.
Looking ahead, IHG expects global RevPAR declines of around 60%, with steeper declines in countries where travel and social contact has been restricted.
IHG added that cancellations for April and May and current booking trends indicated continuing challenging conditions.
However, it now has only 60 closed hotels across China, down from 178 at the peak of the virus, and reported that it has begun to see improvements in occupancy levels.
IHG is aiming to reduce its gross capital expenditure by $100m from 2019 levels and business fee costs by $150m. Its board is also withdrawing its recommendation of a final dividend, saving circa $150m, and is deferring consideration of further dividends.
Keith Barr, chief executive at IHG, said: “Demand for hotels is currently at the lowest levels we’ve ever seen.
“These were not easy choices and we are mindful of the impact these decisions will have on our colleagues and shareholders. However, we believe that these are essential to ensuring that we come out of this as strong as we possibly can and ready to capitalise on what remains an industry with excellent long-term growth potential.”
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