InterContinental Hotels (IHG), the British hotel group, said on Tuesday that occupancy at its properties increased in the first half of this year, as economies around the world recovered.
According to a statement, IHG, which owns the InterContinental, Holiday Inn and Crowne Plaza brands, posted a net profit of $48 million in the first half of the year compared with a loss of $210 million.
In recent months, the group has benefited from the reopening of almost all its hotels, less than 1% of them were still closed at the end of June, and from the catching up of demand after a long period of health restrictions.
“Business has improved significantly in the first half of 2021, with a rebound in demand for travel driven by the rollout of vaccines, easing of restrictions and a rebound in savings,” said Keith Barr, IHG’s CEO.
Revenue per available room (RevPAR), a key indicator for the hotel industry, has increased by 20% year-over-year, but is still down by 43% from 2018, indicating a long road ahead to return to pre-pandemic levels.
IHG notes that business is recovering faster in the U.S. and China than in Europe, the Middle East, Africa, and Asia (excluding China), although in those last regions business has been improving.
The group, which has 884,000 rooms in 5994 hotels, says it is well-positioned to return to sales and profitability levels higher than before the health crisis.
Barr warns, however, that the recovery might not be linear and that business travel, group bookings, and international travel may take time to recover fully.
By the end of June, the group had $2.2 billion in cash, after repaying a 600 million pound loan granted by the UK government last year at the height of the health crisis.
In a sign of its cautious mindset, the group did not pay dividends despite an improvement in results and will do so again “in due course”.