InterContinental Hotels scraps divi, sees RevPar sliding 60% in March

InterContinental Hotels warned on Friday that global revenue per available room was set to tumble 60% due to the coronavirus outbreak, as it scrapped its dividend and said demand for hotels was currently at the lowest levels it has ever seen.

The hotel operator said global RevPAR fell 6% across January and February, with a broadly flat performance in the US offset by declines in Greater China, which saw a near-90% plunge in February. For March, it expects global RevPar to slide around 60% given measures being adopted by governments around the world to restrict travel and social contact, with steeper declines in those markets most impacted by restrictions.

"Cancellation activity for April and May, and current booking trends, indicate continued challenging conditions," it said. In Greater China, it now has 60 hotels closed, compared to 178 at the peak, and has begun to see improvements in occupancy, albeit at low levels.

The company said it has cut costs and reduced salaries and incentives, including "substantial decreases" for board and Executive Committee members. These measures will result in a reduction of up to $150m in its fee business costs.

InterContinental also said it was cutting gross capital expenditure by around $100m from 2019 levels, managing working capital and withdrawing its recommendation of a final dividend of 85.9 cents until visibility improves.

Chief executive officer said: "Demand for hotels is currently at the lowest levels we've ever seen. IHG has a robust business model and the measures we are announcing today to reduce costs and preserve cash give us the capacity to manage the business through this unique environment and to support our owners during this incredibly difficult time."