Daily Management Review

After Strong Summer Season, Return Of Business Travel Indicated By Hotel Owner IHG


After Strong Summer Season, Return Of Business Travel Indicated By Hotel Owner IHG
There have been positive signals of a rebound in business and international travel, claimed the hotel owner IHG and added that this has been driven by strong corporate bookings in the United States.
This has helped the Holiday Inn owner's room revenue to get closer to its pre-pandemic levels.
One of the critical parameters of financial performance of hotels, hotel room revenue (RevPAR), grew by 66 per cent during the third quarter, said the owner of the Crowne Plaza, Regent, and Hualuxe hotel, and added that that metric was lower by only 7 per cent compared to the same quarter in 2019 following a busy summer season.
"Domestic leisure demand was particularly strong in a number of markets over the summer, where occupancy and rate climbed back to 2019 levels," Chief Executive Officer Keith Barr said.
During September, there were indications of a rise in international trips, group bookings and business travel, which has encouraged it, IHG said.
Currently, a period of recovery is underway for firms in the travel and hospitality industry from the severe hit they had taken because of the Covid-19 pandemic as both domestic and international traveling had virtually stopped. The recent recovery has been driven by higher vaccination rates and an easing in restrictions which has encouraged a growth in business and leisure travel.
However, recurrent lockdowns as a result of a rise in Covid-19 infections highly caused by the highly contagious delta variant of the coronavirus, as well as pre-flight Covid-19 testing and remote work choices, continue to be a substantial restraint for the industry.
During the quarter, there was a 76 per cent year on year rise in the revenue from IHG's America’s area, which accounts for the majority of the company's revenue, but was lower by 10 per cent compared to the same period of 2019.
New restriction-related regulations in China in August resulted in IHG taking ablow in its business there just like other hotel companies such as Marriott International.
"(IHG's) key Crowne Plaza and Holiday Inn brands in particular weak relative to their segments," Ainley added.
IN order to save on expenses and prepare itself for development beyond Covid19, IHG has been assessing about 200 Holiday Inn and Crowne Plaza properties. On Friday, it said that it has either exited or confirmed the withdrawal of 90 hotels.
This year, it hopes to save an extra $25 million in costs.