|Master Investor Magazine
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The price of shares in FTSE 100 InterContinental Hotels Group (LON:IHG) has risen by 11.72% to 2,665p (as of 12:00 GMT) as it published a trading update. Management said they anticipate global revenues per available room to drop by 60% during March and it looks as though difficult conditions will continue during April and May. The company is undertaking a range of cost reduction measures including lower marketing spend and cuts to executive and board remuneration.
CEO Keith Barr commented: “At this unprecedented time, our top priority remains the health and wellbeing of our guests, colleagues and partners, and ensuring that in light of such a significant impact on the global economy and, in particular, on the travel industry, we take the right steps to protect the long-term health of our business.
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.
These were not easy choices and we are mindful of the impact these decisions will have on our colleagues and shareholders. However, we believe that these are essential to ensuring that we come out of this as strong as we possibly can and ready to capitalise on what remains an industry with excellent long-term growth potential“.