Holiday Inn owner to pay dividend as travellers start returning

InterContinental Hotels said revenues jumped 40% last year compared with 2020 when Covid forced people to stay at home and the industry took a hit.

The InterContinental Hotels Group saw sales improve as Covid restrictions eased (Ian West/PA) (PA Archive)

The hotel group behind Holiday Inn and Crowne Plaza has decided to pay a dividend to shareholders after bosses saw a recovery in traveller numbers.

The InterContinental Hotels Group said revenues rose 40% to 1.39 billion US dollars (£1 billion) in 2021 compared with a year earlier, with strong growth in the final three months of the year.

Revenues per available room – a key measure in the sector – were 70% of pre-pandemic levels, including 83% between October and the end of December.

The company also swung back to profit, recording a pre-tax profit of 361 million dollars (£266 million) compared with a 280 million dollar (£206 million) loss a year earlier.

Bosses highlighted a particularly strong recovery in the US, although there was a weaker performance in Europe, where Covid-19 restrictions remained in place.

In the UK, revenues per available room were down 41% on 2019 levels, although these improved in the final three months of the year to being down just 16%.

Empty rooms in the country did become more pronounced in December, however, as the Omicron variant swept through, with revenues per available room down 21%.

London took the biggest hit compared with pre-pandemic levels – down 39% – as tourists stayed away in the run-up to Christmas.

But domestic customers helped prop up regional performance outside the capital, where revenues per available room were down just 2% on during the final three months of the year.

By comparison, continental Europe revenues were down 40% in the final quarter and down by more than 50% in Australia, Japan and South East Asia in the period.

Holiday Inn owner InterContinental Hotels took a hit from the pandemic (Jonathan Brady/PA) (PA Archive)

Chief executive Keith Barr said: “Trading improved significantly in 2021, with revenues per available room getting closer to pre-pandemic levels as the year went on, profitability and cash flow rebounding strongly, and signings accelerating in (the fourth quarter).”

He went on: “As vaccination rates rise and restrictions are lifted around the world, we are seeing the demand for travel increase.

“While there may be unexpected challenges ahead, we are confident in our ability to respond and adapt to what consumers and owners need as we position IHG for strong future growth.

“Development activity was well ahead of 2020, with 437 hotel signings contributing to a global pipeline that represents more than 30% of today’s system size.”

He added that the improvement and a reduction in debts by 26% to 1.9 billion dollars (£1.4 billion) means a dividend of 85.9 cents (63.1p) per share will be paid out.