InterContinental Hotels Group said that it was seeing steady improvement in trading in China.
The comments came as the group reported having bolstered its available liquidity, to around $2bn, with its next three covenant tests waived
IHG was due to announce its first-quarter trading update on 7 May, with global revpar having fallen by approximately 25%, including a 55% decline in March. In Greater China only 12 out of 470 hotels were now closed. In the US, around 10% of the group’s hotels were currently closed, demonstrating, the company said: “the resilience of our mainstream, franchised business”, and, in EMEAA, around 50% of hotels are currently closed.
The group said that occupancy levels in comparable open hotels were currently in the low to mid 20% range across the business.
IHG has secured new financing arrangements, including the Bank of England confirming IHG as an eligible issuer for the UK government's CCFF, with the company issuing £600m in commercial paper under this facility.
IHG now has access to $1.35bn of cash on deposit and existing bank facilities are currently $660m undrawn, taking total available liquidity to around $2bn.
Ralph Hollister, analyst, travel & tourism, GlobalData, said: "Although these figures are startling, IHG can take some degree of comfort knowing that its main competitors also find themselves in a very similar position. Occupancy levels in its open hotels are currently in the low to mid 20% range across the business. These figures illustrate that the company is still a long way from any kind of formal recovery. Infection rates in the US and Europe need to drop significantly so that restrictions on movement can be lifted and confidence within IHG’s target markets can be restored.
“Until occupancy rates regain normality and international tourism flows are resumed, IHG finds itself in a positive position to deal with the economic impact COVID-19 is creating.
“Hotel giants such as IHG that emerge unscathed may be able to benefit from consolidation. Failing companies due to COVID-19 could provide ripe pickings for IHG, especially ones that align with its brand strategy.”