Holiday Inn owner IHG makes light of tough economy
4:01 am Tuesday, August 08th, 2023
By Yadarisa Shabong
(Reuters) -Holiday Inn owner IHG expects room revenue growth to remain positive across its regions in the second half of 2023 “irrespective of any” macroeconomic pressures, with leisure travel showing no sign of cooling.
IHG’s global revenue per available room, a key performance indicator for the hotel industry, rose 17% in the second quarter, helped by higher room rates and a rebound in China.
Leisure travel has been booming since pandemic restrictions ended, with people willing to spend heavily on vacations despite rising living costs.
IHG’s U.S. peers Marriott and Hilton have both raised full-year results guidance.
Others in the travel sector, such as airlines, have also benefited, but some have warned of a potential slowdown as consumer finances become more strained in the face of high inflation and borrowing costs.
IHG’s finance chief Michael Glover said the group was “not seeing demand slowing at all” in the United States, its largest market.
There has been no broad resistance to high prices, though some U.S. resorts have seen lodging rates ease, IHG said, adding that the average daily rate was up 7% in the first half.
Shares in the group rose 1.2% in morning trade.
The owner of Crowne Plaza, Regent and Hualuxe hotel chains raised its dividend by 10% to 48.3 cents after reporting 27% jump in operating profit from reportable segments in the six months to June 30. It did not specify second-quarter profit numbers for the quarter.
“In the Americas and EMEAA (Europe, Middle East, Asia and Africa) regions, leisure demand has remained buoyant and business and group travel continued to strengthen,” said IHG’s newly appointed CEO and former Americas head Elie Maalouf, who replaced Keith Barr in July.
(Reporting by Yadarisa Shabong in BengaluruEditing by Milla Nissi and David Goodman)
