For many people 2020 is likely going to be the year of the staycation. You might think that hotel companies would shudder at this prospect.
But not Intercontinental Hotels Group (IHG), which expects its low-budget Holiday Inn brand to do well from the spike in domestic travel both in the coming months and further down the line during any post-pandemic downturn.
Trading for IHG was, predictably, pretty rough during the first six months of this year, with revenues diving by 45 per cent to £960million and the FTSE 100-listed group swinging from a £290million profit to a £210million loss.
Bookings up: Intercontinental Hotels Group expects its low-budget Holiday Inn brand to do well from the spike in domestic travel both in the coming months
But it tentatively said that it is seeing some ‘very early’ signs of demand for its rooms returning as coronavirus-related restrictions have begun to unwind in many countries.
And IHG has also gone a step further by ploughing ahead with plans to open even more sites.
It inked deals for an average of one hotel every day during the first six months – 181 in total.
Between April and June the Crowne Plaza and Regent Hotels-owner outperformed its major rivals on a key metric.
The revenue it made for each of its available rooms fell by 75 per cent in the second quarter – while Marriott logged an 84 per cent fall and Hilton 81 per cent.
Investors cheered the optimism and expansion, and shares rose 4.8 per cent, or 192p, to 4193p.
Traders also piled into online trading platform Plus500, which is in one of the few industries that has thrived during the pandemic.
Its profits jumped to £278million between January and June, up from £49million in the first half of 2019, as amateur traders tried to play the stock market during the roller-coaster turbulence that started in February.
It is hiking its dividend by 249 per cent to £77million, or 73p per share, because of the windfall, and unveiled plans to buy back another £51million of shares from investors. Shares rose 10.7 per cent, or 134p, to 1387p.
Oilfield services group Petrofac managed a similar rally – jumping 9.6 per cent, or 15.9p, to 1818.1p – despite pulling its dividend and swinging into the red because of the oil price crash.
It wasn’t such a good day for gold companies, though, as the price of the yellow metal fell by 4.5 per cent to $1,935 an ounce, below the psychologically important $2,000 mark it passed for the first time last week.
On the FTSE 100 Fresnillo (down 6.7 per cent, or 86.5p, to 1206.5p) and Polymetal (down 4 per cent, or 81.5p, to 1931.5p) tracked the fall.
Meanwhile on the FTSE 250 Centamin fell 7.4 per cent, or 16.2p, to 203.2p, Hochschild Mining dipped 9.7 per cent, or 29p, to 271.2p, and Petropavlovsk was down 8.1 per cent, or 2.7p, to 30.7p.
The wider stock market managed to climb, however, as traders shrugged off dire jobs numbers and crossed their fingers for a US stimulus package.
The FTSE 100 rose 1.71 per cent, or 103.75 points, to 6154.34, while the FTSE 250 climbed 1.54 per cent, or 272.24 points, to 17997.18.
Some of the most dramatic moves yesterday were among the mid-caps.
Funeral provider Dignity increased by 26.6 per cent, or 88p, to 419p, though it hadn’t released any corporate updates.
And Cineworld rocketed by more than 40 per cent at one point as speculation mounted that Hollywood studios could buy some of its cinemas after a US judge last week agreed to terminate a set of rules known as the Paramount decrees.
The company is one of the largest cinema chains in the US, and is struggling with debt.
Shares rose by 29 per cent, or 11.89p, to 52.94p by the close but touched an intra-day high of 59p.
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