Is it time for the great big holiday comeback? While the airline industry is dependent on international travel to revive its earnings, hotel operators are in a better place because they should still prosper whether there are restrictions on travel or not.
Airlines would really be in a pickle if there isn’t more freedom to travel soon. In contrast, a continuation of tough travel restrictions would mean domestic travel activity increases this summer and autumn, and hotel operators like InterContinental Hotels are well placed to capitalise on this trend.
“InterContinental has had to stomach lower room rates as occupancy levels have been weak during the pandemic. Given the difficult times, management probably wouldn’t care if rates don’t recover for a while – it’s all about filling the rooms and its prospects for doing so are picking up,” said AJ Bell’s Russ Mould.
“At the same time, it is pressing ahead with expansion plans, meaning it is laying flags for future gains at a time when some of its smaller rivals will be struggling to stay afloat.”