InterContinental Hotels (LON: IHG) (IHG.L) has released share price news today in the form of a first quarter trading update. It shows that the company continues to experience tough operating conditions caused by lockdown measures resulting from the Covid-19 pandemic.
Despite experiencing an improvement in demand during the period, which was led by the Americas and China, the firm recorded a large decline in revenue per available room (RevPAR). It was down 50.6% versus the same period of 2019, while it was 33.7% lower than in the first quarter of 2020.
This reflects a 23 percentage point reduction in occupancy, with the rate sustained at approximately 80% of 2019 levels. The firm’s occupancy of 40% improved during the quarter, while 4% of its estate was closed as at the end of March.
In terms of regional performance, IHG’s RevPAR was down 43% in the Americas versus 2019 levels. In Europe, RevPAR declined by 71.4% versus 2019 levels, while in Greater China it was 37.7% below 2019 levels.
IHG opened 7.3k rooms in the quarter. It also removed 9.5k rooms during the period. This changed its mix away from Holiday Inn and Crowne Plaza in the Americas and EMEAA towards its Essentials and Suites brands, as well as additional Premium, Luxury and Lifestyle rooms. Its global estate currently stands at 884k rooms, with its net system size being broadly flat during the first quarter.
The firm signed 14.5k rooms ahead of the first quarter last year. Its pipeline of new rooms now stands at 274k rooms. During the quarter, it also repaid the £600 million UK government CCFF at maturity. It had total available liquidity of $2.1 billion as at 31 March 2021.
Commenting on the outlook for IHG, the company’s CEO Keith Barr stated the following in today’s trading update: “As the rollout of vaccines becomes more established, travel restrictions lift, and economic activity rebuilds, traveller demand will continue to grow and generate further momentum in an industry recovery over the course of the year. Coupled with our resilience as a business and the important work we’re doing to support our owners, develop our brands and expand our pipeline, we’re confident that IHG is well positioned for sustained growth”.
In the past year, the IHG share price has gained 40%, while it is 74% higher than its level from five years ago. Over the same time periods the FTSE 100 index (INDEXFTSE: UKX) has gained 20% and 15%, respectively. IHG’s shares currently trade at 5044p at the time of writing.