IHG revealed today that hotel bookings have plummeted to their lowest ever levels due to the Covid-19 pandemic.
The group published a business update, outlining that its global revenue per available room decreased by 6 per cent in January and February, with an almost 90 per cent decline in Greater China in February.
IHG anticipates that this will further decline by approximately 60 per cent this month owing to travel restrictions.
The group also warns of the impact of cancellations throughout April and May.
To respond to the crisis, IHG announced that it would cut costs by US$150 million through measures such as delaying renovations and reducing salaries, including at the board and executive level.
The group will also cancel the US$150 million dividend which it announced in February.
IHG also aims to cut capital expenditure by US$100 million this year.
Keith Barr, CEO of IHG, commented:
“Demand for hotels is currently at the lowest levels we’ve ever seen. IHG has a robust business model and the measures we are announcing today to reduce costs and preserve cash give us the capacity to manage the business through this unique environment and to support our owners during this incredibly difficult time.”
In a bid to spread hope, the group last night lit up empty hotel rooms across properties in locations such as Davos, Amsterdam and Berlin to create a heart display.
The Crowne Plaza Hotel Belgrade started the initiative a few nights ago (see above), and has since inspired other European hotels to follow suit.
The group also revealed some improvements in occupancy in Greater China. There are currently 60 hotels closed compared to 178 at the peak.
IHG has extended its cancellation fee waivers to existing and new bookings at all hotels globally for stays between March 9, 2020 and April 30, 2020.