IHG's revenue almost halves during pandemic

23 February 2021 by
IHG's revenue almost halves during pandemic

IHG Hotels & Resorts saw its revenue almost halve last year, having reported total revenue of $2.39b (£1.7b) for 2020, down from $4.63b (£3.28b) in 2019.

The hotel group also posted a $280m (£199m) pre-tax loss in 2020 against a $542m (£385m) profit in 2019 and a drop in revenue per available room (revpar) of 52.5% – the UK saw revpar decline 65% last year, and a further 74% decline in the fourth quarter.

However, IHG's global estate now encompasses 886,000 rooms across 5,964 hotels, having opened 39,000 rooms across 285 hotels in 2020. It also signed 56,000 rooms (360 hotels) with its Holiday Inn brands making up half of all signings and conversions approximately 25%, with a global pipeline of 272,000 rooms across 1,815 hotels.

In the group's 2020 financial report it said it expects to gain further market share, partly driven by the potential for increased conversion activity, and although new-build development in the sector has been temporarily impacted by Covid-19, it expects it to return to robust levels of growth in supply over the longer term.

IHG also announced its new 2030 Responsible Business Plan setting out its environmental targets and commitments to championing diversity, inclusion and equality. This included committing to driving gender balance and a doubling of under-represented groups across its leadership; while its environmental targets included reducing its absolute carbon emissions from owned, leased and managed hotels by 15% by 2030, and to reduce carbon emissions per square metre from franchised hotels by 46% by 2030.

Keith Barr, chief executive of IHG Hotels & Resorts, said: "2020 was clearly the most challenging year in our history, with Covid-19 heavily impacting demand across our industry. 2021 has begun with many of these challenges still in place, with more meaningful progress towards recovery for the industry unlikely until later in the year and dependent on global vaccine rollouts, lifting of restrictions and an acceleration in economic activity.

"The shape of recovery remains varied globally, but we've continued to outperform the industry in key markets thanks to the strength of our teams, business model and segments in which we compete. This includes our industry-leading position in upper midscale, where demand remains stronger. To succeed in this environment, we've evolved our purpose as well as our strategic priorities, ensuring a focus on continued investment in our brands and digital capabilities to maximise revenue for our hotels and create more seamless guest experiences; keeping guests and owners at the heart of everything we do; and strengthening how we care for our people, communities and planet. These elements form the pillars of our corporate strategy, which together with our new 2030 Responsible Business Plan, will ensure we continue to successfully and sustainably grow our brands and business."

IHG Hotels & Resorts also this morning announced the appointments of Daniela Barone Soares and Richard Anderson to its board as independent non-executive directors from 1 March, as well as the retirement of non-executive director Anne Busquet.

Photo: Shutterstock

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