There are signs of recovery for InterContinental Hotels, despite significant RevPAR decline

Following today’s release of InterContinental Hotels Group (IHG) Q3 2020 trading update, Ben Cordwell, Travel & Tourism Analyst at GlobalData, a leading data and analytics company, offers his view on the company’s results:

“A year-on-year (YOY) RevPAR decline of 53.4% and an occupancy rate down 30% on the previous year highlight how tough Q3 has been for IHG. Despite this, there is reason to be positive as the hotel chain has reported that occupancy improved from 25% to 44% in Q3, signalling a light at the end of the tunnel.

“IHG’s recovery is being driven by domestic tourism. According to GlobalData’s COVID-19 Recovery Consumer Survey (16–20 September), 41% of respondents globally would consider booking a domestic trip this year, compared with only 31% considering booking an international trip. This exhibits the greater demand for domestic tourism and gives hope that the domestic market will help hotel companies navigate this difficult period.

“The European market was hit particularly hard during Q3, with RevPAR down 72% YOY, as a second coronavirus wave is starting to take grip across the continent. The Chinese market could be crucial for the company in the comings months as the country is showing the best signs of tourism recovery globally, highlighted by an occupancy rate of 57%.

“The coming months will be incredibly challenging for IHG, however, the signs of a slow recovery are beginning to become apparent.”

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