IGH half year results reflects vaccine rollout progress & travel restrictions

Global hotel group, IHG has posted its half year results ending 30 June 2021, showing significant improvement in demand over the course of this period.

RevPAR grew by 43% comparing to the same period in 2019 and was up by 20% comparing to 2020, standing at £408m.

Total revenue came to £850m, down from £900m in the same period in 2020, and losses came to £99m, down from £168m for the same period in 2020.

Recovery was most advanced in Greater China with Q2 RevPAR (16)% vs 2019, with continued improvement in the Americas to (26)%; and Europe, the Middle East and Africa (EMEAA) was still the most challenged at (65)%. Regional performance reflects variations in both vaccine rollout progress and travel restrictions.

Group Q2 RevPAR rose by 36% vs 2019 to £136m, reflecting occupancy 19% lower and rate sustained at 87% of 2019 levels.

Q2 occupancy of 53% improved through the quarter; with June up by 69% in the US; 54% Greater China; and 40% EMEAA.

CEO Keith Barr (pictured) said, “Trading improved significantly during the first half of 2021, with travel demand returning strongly as vaccines roll out, restrictions ease, and economic activity rebuilds. It has been great to see our teams welcome more and more guests back into our hotels, with domestic leisure bookings leading the way, particularly in the US and China.

'Essential business travel was a key element of our resilience throughout the pandemic, and we are now seeing more group activity and corporate bookings start to come back.

'These trends and the momentum in the business have continued in recent weeks, including in EMEAA where a lifting of travel restrictions in some markets is also now driving improvements in demand. With occupancy and rate continuing to improve, nearly 50% of our hotels achieved RevPAR above 2019 levels in July.'

Barr went on, 'As more development activity returns to the industry, the strength of IHG’s brand portfolio and the power of our scale, systems and platforms for owners is being clearly recognised.

'We opened 132 hotels in the half and signed 203, both sizeable increases on last year. Our focus on the quality of our estate remains extremely high, and we’re making rapid progress with the review of our Holiday Inn and Crowne Plaza portfolios to ensure the consistency of these leading brands and that they are well positioned for future growth.

'With the actions we are taking, and a pipeline that represents more than 30% of our current system size, we expect to return quickly to an industry-leading level of net rooms growth.'

Barr continued, 'We’re also excited to announce that we’ll soon be launching a new Luxury & Lifestyle collection brand to provide further choice for guests and owners. Over the last four years we’ve added five new brands to create a portfolio of 16, each targeting a specific segment and enhancing our market reach.

'The addition of a collection brand will provide high quality independent hotels access to the many benefits of IHG’s system, whilst retaining a property’s distinctive identity. There are currently around 1.5 million independently run rooms in the market segments we are targeting, and we expect the collection to attract more than 100 hotels within 10 years.'

Barr finsihed,'The actions we have taken during the last 18 months position us well to exceed our pre-pandemic level of growth and profitability. While there is a risk of trading volatility in the balance of the year, and discretionary business trips, group bookings and international travel will take time to fully recover, we are confident in the strength of IHG’s future prospects.”