Holiday Inn-owner InterContinental Hotels said on Thursday it was seeing signs of recovery in some markets as it tightened up on safety and cleaning procedures following an 80% plunge in average room revenue in April.
Chief Executive Keith Barr said the coronavirus crisis was the biggest challenge the hotel industry has ever faced and the company said it was cleaning all public areas rigorously every 1-2 hours in a bid to reclaim customer confidence.
The Crowne Plaza, Regent and Hualuxe operator is hopeful of a recovery in China, Australia and New Zealand, where the virus is well-contained, as around 95% of its demand is domestically driven.
IHG said occupancy levels in Greater China were running in the mid-20% range, up from around 5% in mid-February. It now has 10 hotels open in China, compared to a peak of 178 closures earlier.
It expects its domestic business to bounce back first, particularly in the United States, where only around 10% of its estate is closed.
"We are less exposed to large group meetings and events, which tends to be the first to fall away and the last to recover in a recessionary environment," Chief Financial Officer Paul Edgecliffe-Johnson told analysts on a conference call.
IHG shares, which have fallen around 34% this year, were up 3.3% at 3545 pence by 1106 GMT.
Travel and leisure businesses have been among the worst hit by the pandemic, with billions of dollars in business trips and holidays cancelled as countries impose sweeping restrictions.
IHG said around 15% of its estate was closed by April-end, with half its hotels in Europe, Middle East, Asia and Africa shut. It expects to open hotels as lockdown measures are eased in different countries.
"The group is suffering and until the lockdowns are eased, the pain is likely to continue. It has access to $2 billion in liquidity, so from that point of view it is in good shape," CMC Markets analyst David Madden said.
IHG, which also secured an extension on a $1.28 billion facility until 2023, estimates the $2 billion to provide at least 18 months of headroom.
It has waived cancellation fees and created book now pay later options for the rest of 2020.
IHG said the occupancy levels dropped to historic lows in March and April, with first-quarter global RevPAR slumping 25%.
Earlier this year, it raised 600 million pounds from Bank of England loans under the government's coronavirus aid scheme and announced $150 million in cost cuts.
(Reporting by Tanishaa Nadkar in Bengaluru, additional reporting by Aby Jose Koilparambil in Bengaluru, Editing by Sherry Jacob-Phillips and David Evans) ((firstname.lastname@example.org; +919730172534; Twitter - @TanishaaNadkar;))