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Highlights
- The UK hospitality industry has asked for urgent financial aid following a drastic decline in new bookings ahead of the important festival season.
- The recent rise in coronavirus cases has resulted in pseudo-lockdown like situation, adversely impacting the earnings of restaurants and bars.
The UK hospitality industry has asked for urgent financial aid following a drastic decline in new bookings ahead of the important festival season after the recent rise in Omicron variant cases in the country. Moreover, the UK PM Boris Johnson has asked people to be cautious, cut back on Christmas parties and think carefully before socialising during the festive season after the UK reported a record 77,741 daily coronavirus cases.
The UK government has not yet imposed stricter public health restrictions. However, the recent rise in cases has resulted in a pseudo-lockdown situation, adversely impacting the restaurant and bars earnings. Many hotels have also witnessed booking cancellations in the last two weeks. According to UKHospitality, a trade body for the hospitality industry, the recent rise in omicron variant cases might result in a 40% fall in revenue across the industry in December 2021.
Let us deep-dive into 3 FTSE listed hospitality stocks that may be impacted:
Mitchells & Butlers Plc (LON: MAB)
The FTSE250 listed company operates pubs, bars, and restaurants under various brand names like Premium Country Pubs Harvester, etc. Its restaurants are located in the UK and Germany.
The company’s business returned to profitability after the lockdown restrictions were lifted. As a result, it reported total revenue of £1,065 million, while its operating profit was £81 million for the 52 weeks ended 25 September 2021. The current pseudo-lockdown situation might discourage people from visiting pubs and bars, impacting the company’s business.
Mitchells & Butlers Plc’s last close was at GBX 215 on 15 December 2021, with a market cap of £1,341 million.
Marston’s Plc (LON: MARS)
The pubs and bars operator has its business operation in the UK and other countries. The company also has a brewing business selling cask and packaged beers under various brand names.
The company reported total revenue of £424 million, 48% lower than last year for the 52 weeks ended 2 October 2021. The sales were impacted due to the disruption caused by the pandemic.
Marston’s Plc’s last close was at GBX 65.65 on 15 December 2021, with a market cap of £416.3 million.
Intercontinental Hotels Group Plc (LON: IHG)
The company gives the franchisee of its brand name and manages the hotel space on behalf of hotel owners. It operates close to 5,977 hotels under various brand names across different countries.
The business reported a significant improvement in trading in the third quarter, reporting a 60% occupancy rate. The gross system growth was at 5.2% year-on-year. Ease in travel restrictions after the pandemic was the main driver for business recovery. However, the recent spread of the omicron variant globally might negatively impact business growth.
Intercontinental Hotels Group Plc’s last close was at GBX 4,399 on 15 December 2021, with a market cap of £8,059 million.
