Research Update: IHG (Intercontinental) Outlook Revised To Negative On COVID-19 Impact; 'BBB' Rating Affirmed

The global travel industry is facing an unprecedented free fall in revenue per available room (RevPar) because of the rapid spread of COVID-19 globally, with our economists pointing to a global economic recession in 2020. Our base case assumes a RevPar decline of 20%-30% for 2020 with full recovery achieved only in 2022-2023 for hotels in Europe. We expect this to have a material impact on InterContinental Hotels Group PLC's (IHG's) financial position for 2020, with decline in revenue, earnings, and cash flow in the near to medium term. We believe that IHG has solid liquidity, which will provide it with a cushion, given the company's asset-light model. We are therefore revising our outlook on IHG to negative and affirming

...- The global travel industry is facing an unprecedented free fall in revenue per available room (RevPar) because of the rapid spread of COVID-19 globally, with our economists pointing to a global economic recession in 2020. - Our base case assumes a RevPar decline of 20%-30% for 2020 with full recovery achieved only in 2022-2023 for hotels in Europe. We expect this to have a material impact on InterContinental Hotels Group PLC's (IHG's) financial position for 2020, with decline in revenue, earnings, and cash flow in the near to medium term. - We believe that IHG has solid liquidity, which will provide it with a cushion, given the company's asset-light model. - We are therefore revising our outlook on IHG to negative and affirming our '###' long-term rating on the company....

Research Update