- The group’s RevPAR increased 10.5% in the third quarter compared to last year
Intercontinental Hotels Group expects to close 2023 with “very strong” financial results, despite “financial challenges” hampering its ability to launch new hotels.
The FTSE 100-listed Holiday Inn owner’s revenue per available room (RevPAR), a key performance indicator for the hospitality industry, rose 10.5 per cent in the third quarter compared to last year.
China led the way with a mammoth 43.2 percent jump in RevRAR, while the Americas rose 4.1 percent and EMEA 15.9 percent.
The FTSE 100’s overall revenue per available room (RevPAR), a key performance indicator for the hospitality industry, rose 10.5 per cent in the third quarter compared to last year.
IHG also reported that it was on track to return $1 billion (£825m) to shareholders this year, through share buybacks and dividend payments.
The hospitality industry has benefited from a boom in demand for leisure travel after the pandemic, as people splash out their savings on holidays despite the rising cost of living.
Elie Maalouf, CEO of IHG, said: “I am excited about the future of IHG and the attractive long-term demand drivers for our markets.”
However, Maalouf warned that “macroeconomic uncertainties and some short-term financial challenges [are] stopping the development of new hotels.
This took the shine off an upbeat trading update, with IHG stock down more than 3 per cent to around £59.60.
In August, the company boasted “very healthy” demand in the first half after revenue was boosted by the reopening of the Chinese economy.
The Crowne Plaza owner’s global RevPAR rose 24 per cent year-on-year in the six months to the end of June, taking the group’s total sales to more than $2.2bn (£1.7bn).
Philip Baker, hospitality group director at Gowling WLG, said: “The travel sector continues to demonstrate its resilience and benefit from increased consumer demand despite the cost of living crisis.”
‘[IHG] continues to demonstrate its ability to continue generating cash flow in times of uncertainty thanks to its continued investments in Europe, the Middle East and Asia. Subsequently, its growth ambitions look increasingly positive as more consumers take advantage of the possibility of traveling freely again.
‘No doubt competitors’ efforts to recover from a difficult period and similarly prosper will be in the spotlight, particularly with the cost of living crisis and inflationary pressures impacting consumer spending.
“Shareholders will want this success to continue and profits to increase post-pandemic as the hospitality sector recovers.”
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