How Hotel Companies Are Surviving the Coronavirus

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Heard on the Street: Local hotel chains are faring better than global ones, as international business travel is hit by Covid-19

By Stephen Wilmot Close Stephen Wilmot Updated Aug. 13, 2020 7:36 am ET The kind of hotels you would most like to stay in aren’t necessarily those you are best off investing in during a pandemic.

The second quarter wasn’t easy for anyone, but London-listed IHG fared less badly than most. This week the company reported an aggregate quarterly decline in revenue per available room or RevPAR—the key metric for a hotel’s top-line performance, combining room rates with occupancy—of 74.7% across its chain. Marriott, Hilton and Accor recorded declines north of 80%.

Earning management or franchising fees on hotels means the big-brand hotel companies are less exposed to the economics of a travel crisis than might be imagined. The owners or lessees are the ones that have to bear the costs of the real estate amid a collapse in revenue. Shares of Park Hotels and Resorts, the real-estate company spun out of Hilton Worldwide in 2017, have fallen more than 60% this year, compared with just 21% for Hilton itself.

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