InterContinental Hotels Group (IHG) demonstrates resilience in its latest financial quarter despite leisure stays remaining largely unchanged.
- Driven by a rise in revenue per available room (RevPAR), IHG recorded a 1.5% increase.
- Significant growth was seen in group and business travel, overshadowing the static leisure demand.
- Worldwide capacity expanded with thousands of new rooms and hotels added to IHG’s offerings.
- Despite the end of a significant licensing agreement, IHG’s financial impact remains minimal.
InterContinental Hotels Group (IHG) has shown resilience in its financial performance for the third quarter, even as leisure stays remained largely flat. The company reported a 1.5% increase in revenue per available room (RevPAR), a key performance metric, for the three months ending September 30, 2024.
While leisure demand was steady, significant growth was noted in other areas. Groups demand rose by 6%, and business travel increased by 2% compared to the same period last year. These factors contributed to the overall positive financial outcome for IHG despite the static leisure segment.
IHG expanded its global presence with a 4.1% year-on-year capacity growth, bringing the total number of rooms to 968,000 across 6,505 hotels worldwide. This expansion included the signing of 19,200 new rooms across 129 new hotels, reflecting a 14% increase in signings.
Looking ahead, IHG faces a transition with the upcoming end of a 15-year licensing agreement with The Venetian Resort Las Vegas. This agreement will conclude on January 1, 2025, removing 7,092 rooms from its system. However, the impact on IHG’s revenue is expected to be minor, contributing less than $1 million in 2023 and having a net nil effect on operating profit.
Chief Executive Elie Maalouf expressed satisfaction with IHG’s trading performance and development activities. He highlighted the company’s robust position, noting strong regional performances, especially in the EMEAA region with a 4.9% increase and 1.7% growth in the Americas. However, in Greater China, RevPAR declined by 10.3%, attributed to strong domestic travel comparisons from the previous year.
IHG’s development milestones included opening 17,500 rooms across 98 hotels, more than double the number compared to the same period in the previous year. A noteworthy development is the addition of 6,200 rooms from the Novum Hospitality agreement. The company’s solid signings performance was evidenced by a 14% year-on-year increase, leading to a 12% rise in its development pipeline.
IHG’s steady growth amidst static leisure stays underscores its strategic resilience and operational strength.