Holiday Inn owner, Intercontinental Hotel Group (IHG), has reported a boost in revenues per room despite facing a substantial downturn in China. The company’s shares experienced a dip in early trading subsequent to the disclosure.
Elie Maalouf, the chief executive of IHG hotels and resorts, expressed his satisfaction with the recent trading performance, highlighting that it signifies the business is progressing as per market expectations.
IHG, renowned for owning brands like Crowne Plaza and Hotel Indigo, disclosed that global revenues per available room surged by 1.5% throughout the third quarter of 2024. The growth was primarily attributed to robust business demand.
The company witnessed remarkable revenue growth in Europe and Asia, with revenue per available room escalating by 4.9%. Notably, both occupancy rates and room prices displayed a year-on-year increase. Conversely, IHG’s Americas segment observed a 1.7% growth, including a 1.2% rise in the US market.
However, IHG faced a 10.3% decline in revenues per available room in Greater China due to severe impacts from typhoons and the scheduling of public holidays.
Mr. Maalouf asserted, “We have made great progress this year to further strengthen IHG’s enterprise platform, grow our brands and deliver on our growth algorithm. We remain confident in our abilities to capitalise further on our scale, leading positions and the attractive, long-term demand drivers for our markets.”
The company’s expansion strategy also proved beneficial, with 98 new hotels opened during the latest quarter. Analyst Mark Crouch from investment platform EToro noted, “Despite economic weakness in China and subdued demand in the US, it was strong summer demand in Europe that has driven the latest outperformance for IHG, reporting nearly 5% growth in the region.”
While IHG encountered a slight setback in share prices by 1.4% during early trading, the company maintains its optimism for future prospects, particularly in the Far East as concerns regarding China’s economic status alleviate.