The latest quarter showcased growth in business and group travel demand for IHG, despite a stagnant leisure sector, reflecting a nuanced recovery in the hospitality industry.
- Revenue per available room (RevPAR) increased by 1.5% during the summer months, driven by diverse global demand.
- Group travel demand surged by 6%, significantly bolstering performance in the quarter.
- Business travel experienced a moderate growth of 2%, supporting overall trading metrics.
- Leisure stays remained largely unchanged, highlighting varied sector responses across different travel categories.
The performance of the InterContinental Hotels Group (IHG) in the latest quarter underscores a complex dynamic in the hospitality sector, where business and group travel demand significantly contributed to overall growth. With a modest 1.5% increase in revenue per available room, these sectors counteracted a largely stagnant leisure travel market. The increase in group travel demand by 6% played a crucial role, pushing trading figures upward despite challenges faced in other segments.
The relatively stable state of business travel, reflected in a 2% growth, emphasises the role of business resilience and demand in driving the summer’s trading success. This sector’s performance is mirrored across various regions, with IHG highlighting particularly favorable outcomes in the Americas and EMEAA (Europe, Middle East, Asia, and Africa), where RevPAR rose by 1.7% and 4.9% respectively. Yet, this positive trajectory wasn’t universal; the Greater China region faced a decline of 10.3% in RevPAR, challenged by last year’s strong domestic travel figures.
Year-on-year capacity growth stood at 4.1%, expanding global room availability to 968,000 across 6,505 hotels. The signing of 19,200 new rooms across 129 hotels further exemplifies IHG’s robust development pace and its strategic market positioning. The anticipated conclusion of a long-term partnership with The Venetian Resort adds a nuanced twist to these developments, although it minimally impacts IHG’s financial outlook due to the unique fee structures involved.
Chief Executive Elie Maalouf expressed satisfaction with the period’s accomplishments, noting effective development activity during the quarter. The successful absorption of additional rooms from agreements, such as the Novum Hospitality, contributed significantly to the increased pipeline, which saw 327,000 rooms planned across 2,218 hotels. This illustrates IHG’s forward-thinking approach in expanding its portfolio and underscores the group’s confidence in meeting market expectations for the remainder of 2024.
IHG’s performance demonstrates a strategic balance of robust development in business and group travel, amidst steadying leisure trends.
