InterContinental Hotels reports a 76% decline in average room revenue in May

InterContinental Hotels Group (LON: IHG) said on Tuesday that the ongoing Coronavirus pandemic that has so far infected more than 300,000 people in the United Kingdom and caused over 43,500 deaths resulted in a 76% decline in average room revenue last month. The slump, however, was a slight improvement as compared to IHG’s data for April. Jefferies recently downgraded IHG’s rating to “hold”.

The Holiday Inn-owner said that it reopened a few of its properties in May that resulted in the said improvement. Shares of the company were reported 1% down in premarket trading on Tuesday and slid another 1% on market open. At £36.22 per share, IHG is roughly 30% down year to date in the stock market after recovering from a low of £23.85 per share in March. Learn more about why prices rise and fall in the stock market.

IHG estimates a 75% decline in RevPAR in Q2

In terms of comparable RevPAR (revenue per available room), the Denham-headquartered company estimated a 75% decline in the second quarter. For April alone, IHG had recorded an 80% decline in this key gauge that is widely used in the hotel industry as a performance indicator.

The Crowne Plaza operator, however, expressed confidence in the pace at which it is reopening its properties in the second quarter. As of Tuesday, IHG said, 90% of its global estate has been reopened to the public. According to the British multinational hospitality company:

“The small but steady improvements in RevPAR through the second quarter are mostly attributed to the Americas franchised estate and the Greater China region.”

It also boasted occupancy levels to have recovered to more than 40% in the U.S.

Whitbread raises £1.0 billion via a share sale

IHG valued its available liquidity at £1.63 billion as of 26^th June. In May, its competitor, Whitbread that owns Premier Inn raised £1.0 billion in fresh cash via a share sale to cushion the economic blow from the novel flu-like virus.

As COVID-19 brought the hotel sector to its knees, IHG recently said that the industry has never faced a bigger challenge in history.

InterContinental Hotels Group performed fairly upbeat in the stock market last year with an annual gain of roughly 20%. At the time of writing, the Denham-based hospitality company has a market cap of £6.60 billion and a price to earnings ratio of 21.26.