first_imgWhy I’m confident in Intercontinental Hotels shares despite today’s dire results Simply click below to discover how you can take advantage of this. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Andy Ross owns no share mentioned. The Motley Fool UK has recommended InterContinental Hotels Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. 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In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.center_img Enter Your Email Address See all posts by Andy Ross Our 6 ‘Best Buys Now’ Shares Hospitality has been one of the hardest hit sectors as a result of covid-19. This is why Intercontinental Hotels Group (LSE: IHG) shares have slumped. The shares are down 20% so far this year.Intercontinental Hotels shares already recoveringThe group has today revealed results for the first half. In the six months, Intercontinental saw RevPAR slumping 52% to $488m. The UK was particularly hard hit as hotels were closed. The fact net debt fell 12% in these circumstances I think shows the quality of the group. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…On the back of these results, at the time of writing, Intercontinental Hotels shares are up nearly 7%.But it was expectedAt the end of June the company had updated that most hotels were back open. Only 10% of hotels were still closed back then. The best result was in Greater China where only 1% were closed. The group has 5,900 hotels with 883,000 rooms globally.The hotelier at the end of June was indicating it expected to announce a comparable RevPAR decline of 75% for Q2, resulting in a fall of 52% for H1. So the results today are in line with these forecasts. Investors may be happy there were no further downgrades or nasty surprises.The group has been helping its franchisees get through the crisis. This has hit it financially in the short term but should help it recover once the worst of the crisis is over.The group has been cutting costs and has around $2bn of liquidity. It has also been making use of government schemes to support its business. And it has cut the dividend to save money and keep its balance sheet strength.What could the future hold?A further fear investors may have post-crisis is whether more business will be done online rather than face to face at conferences for example. If so, this would have an impact on hotels. However, I expect a lot of business will continue to be done face to face once the immediate concerns fade away.Already occupancy is picking up at InterContinental’s hotels. Occupancy has been rising in recent weeks back up to 45% which, while still low, is a dramatic improvement in a short period of time. If this trend can continue, Intercontinental could make a quicker recovery than many expect.I think business and leisure travel will eventually pick up again and therefore Intercontinental doesn’t, in my opinion, face a structural challenge. As a group that’s primarily a franchisor, it’s an asset-light business model that should be able to produce profits and cash for investors in more normal conditions. It has been able to in the past and I’m not sure the long-term future looks any less bright.This is why, despite today’s results, I may be tempted to buy Intercontinental Hotels shares ahead of a future recovery. Andy Ross | Tuesday, 11th August, 2020 | More on: IHG “This Stock Could Be Like Buying Amazon in 1997”last_img

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