InterContinental Hotels Group’s executive committee and board will see a “substantial” reduction in salaries as part of new measures to cushion the financial impact of the coronavirus pandemic.
IHG will also reduce gross capital expenditure by circa $100 million from 2019 levels, delay renovations and relax brand standards and taking action in owned, leased and managed lease hotels as it looks to free up $150 million.
“Demand for hotels is currently at the lowest levels we’ve ever seen,” said IHG CEO Keith Barr.
“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.
“It’s important 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.”
The hotel group said its global revenue per available room decreased by 6 per cent in January and February, with an almost 90 per cent decline in Greater China in February.
IHG anticipates that this will further decline by approximately 60 per cent this month owing to travel restrictions and warned of the impact of cancellations throughout April and May.
But in one sign of light at the end of the tunnel, IHG reported improvements in occupancy in Greater China with 60 hotels closed currently compared to 178 at the peak of the country’s coronavirus outbreak.