Despite concerns over its performance, Intercontinental Hotels Group (IHG), the owner of Holiday Inn, reported a positive revenue per available room (RevPAR) in the last quarter. In its third-quarter trading update, IHG revealed a global RevPAR, a crucial measure for the hotel industry, of 1.5 per cent.
The º£½ÇÊÓƵ's RevPAR grew by 2.2 per cent over the quarter, surpassing the global average but significantly below the 7.1 per cent growth in continental Europe. Meanwhile, the Americas stood at 1.7 per cent, EMEAA (Europe, the Middle East and Africa) at 4.9 per cent, and Greater China at -10.3 per cent, as reported by .
The sharp decline in China was anticipated by the hotel owner, attributing it to the comparison of "resurgent domestic travel this time last year" with a depressed environment and the impact of September typhoons. Despite a more than 12 per cent drop in IHG's stock price over the summer, it has since rebounded close to its all-time highs due to positive messages from its second-quarter results season.
Peel Hunt analyst Ivor Jones added that "Hotel industry sentiment has been affected by the escalating conflict in the Middle East and hotel share prices have recently and collectively retreated as a result," During the quarter, IHG also opened 17,500 rooms across 98 hotels, more than double the same period last year, partly due to a deal with German Novum Hospitality that added 6,200 rooms to its portfolio.
In a recent update, IHG reported a 14 per cent increase in signings performance across 129 properties, totalling 19,200, compared to the previous year.
Elie Maalouf, IHG's chief executive, expressed satisfaction with the company's latest trading performance and development activity, stating: "We are pleased with the latest trading performance and another strong period of development activity, and we are on track to finish 2024 in line with market expectations,".
He further highlighted the company's progress throughout the year, saying: "We have made great progress this year to further strengthen IHG's enterprise platform, grow our brands and deliver on our growth algorithm."
Maalouf also explained the benefits of their growth strategy, noting: "The power of this algorithm comes from the compounding nature of growing fee revenues through the combination of RevPAR, system expansion and ancillary fee streams, which in turn helps to increase margins and, with our strong cash generation, allows us to reinvest in our business and return surplus capital to shareholders."
