InterContinental Hotels Group is seeing the lowest demand it has ever experienced, due to the effects of Covid-19, the company reported in a Friday statement. Given the travel and social restrictions imposed by governments around the world, the company anticipates March global revenue per available room to decrease around 60 percent year over year, with steeper drops in those markets most impacted by the restrictions.
IHG's global revenue per available room decreased 6 percent year over year across January and February with a broadly flat performance in the United States offset by declines in Greater China, which reported an almost 90 percent decline in February.
In Greater China, the company currently has about 60 hotels closed, compared with 178 at the peak of the outbreak. In recent days, IHG has begun to see occupancy improvements, albeit at low levels, according to the company.
To counter these effects, IHG is taking several measures to reduce costs and conserve cash. It has challenged all discretionary costs and reduced salaries and incentives, including decreases for board and executive committee members. "These reductions will result in up to $150 million in our fee business costs," according to IHG.
To support its hotel owners, the company said it has launched a package of measures including delaying renovations and relaxing brand standards. Marriott International announced similar measures earlier this week.
The company indicated it would provide further business details at its first-quarter earnings call on May 7.