Holiday Inn owner IHG’s revenue per available room was positive over the last quarter, despite concerns over its performance.
In a third quarter trading update, Intercontinental Hotels Group reported global RevPAR, a key metric for the hotel industry, of 1.5 per cent.
RevPAR in the UK grew by 2.2 per cent over the quarter, above the global average but far below the 7.1 per cent growth in continental Europe. Meanwhile, the Americas sat at 1.7 per cent, with EMEAA (Europe, the Middle East and Africa) at 4.9 per cent, and Greater China at -10.3 per cent.
China’s sharp drop-off was not a surprise to the hotel owner, which said the figure compared “resurgent domestic travel this time last year” to a depressed environment, as well as the effects of typhoons in September.
IHG’s stock price tanked over the summer, falling more than 12 per cent in a month, but has since recovered to close to its all-time-highs thanks to positive messages from its second quarter results season.
“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,” added Peel Hunt analyst Ivor Jones.
IHG also opened 17,500 rooms across 98 hotels throughout the quarter, well over double the same period last year, thanks in part to a deal with German Novum Hospitality that added 6,200 rooms to its collection.
Meanwhile, a signings performance of 19,200 across 129 properties was 14 per cent more than 2023.
“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,” said IHG chief executive Elie Maalouf.
“We have made great progress this year to further strengthen IHG’s enterprise platform, grow our brands and deliver on our growth algorithm.
“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.”