- Despite lesser business travelers, London hotels are reviving quickly, as per IHG.
- Sales at London hotels continue to be 10% less than pre-Covid levels, while rural places were ahead.
- IHG’s profits went up by over 100% in the first half of the year.
The hospitality sector has been among the hard-hit sectors during the pandemic phase, and even though the sector has been recovering, it has still not bounced back to normalcy. The hotel sector has been reviving in London, but it has still not reached the level of demand that existed before the pandemic struck. According to InterContinental’s owner IHG, there is a lack of business travelers in London, but London hotels are still recovering quickly.
In the first half of 2022, revenue per room in London hotels lags by 10% as compared to the 2019 pre-Covid levels, as reported by IHG. However, the revenues from other regions surpassed the pre-Covid levels by 1%. Even though rural places were ahead, IHG’s CFO Paul Edgecliffe-Johnson has claimed that this trend of quicker recovery outside urban markets exists across the globe, and London is reviving fast.
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In its half-year report released on Tuesday, IHG has reported revenues of £1.5 billion, which represents a surge of 52% as compared to the first half of last year. The profits made by the company increased by over 100% in the first half. Having said that, when compared to the pre-Covid levels, the profits have shrunk by 8%. Over the six months, IHG has opened 14,900 rooms (96 hotels) and signed 30,700 rooms (210 hotels). Revenues from the more premium brands of the group, like Crown Plaza, climbed up slower as compared to the revenues of its budget hotel chains, like Holiday Inn.
As the hospitality sector gradually comes back to pre-pandemic levels, UK investors can keep an eye on the stocks of hotels, restaurants, and pubs. In addition to the share price performance of IHG, let’s look at 2 more hospitality stocks suggested by Kalkine Media® which are doing well currently.
InterContinental Hotels Group plc (LON: IHG)
The shares of InterContinental Hotels Group plc were experiencing gains of 1.55% at 1:48 PM (GMT+1) on Wednesday and were trading at GBX 5,056.00. IHG holds a market cap of £9,140.09 million and has given its investors returns of 7.13% and 5.92% on one-year and YTD basis. IHG has been attractive active interest as its RSI (Relative Strength Index) value stood at 69.38 during intraday trading.
Compass Group plc (LON: CPG)
UK-based food and support firm Compass Group plc was seen enjoying a market cap of £33,973.99 million and was up by 0.96% at 1:54 PM (GMT+1) on Wednesday. The FTSE 100 CPG on 10 August was trading at GBX 1,939.50 and has offered positive one-year and YTD returns of 28.40% and 17.63%, respectively. At present, the Compass Group offered a dividend yield of 1.2% a year and it had an EPS of 0.20.
Trainline (LON: TRN)
The shares of the UK-based travel business, Trainline, were experiencing gains of 1.59% at 2:03 PM (GMT+1) on Wednesday and were trading at GBX 377.20. Trainline enjoyed a market cap of £1,784.77 million. At present, the company has a negative EPS of -0.19.