The owner of the Crowne Plaza and Holiday Inn hotel chains has said US business travel revenue was now back at pre-pandemic levels, in a hopeful sign for the industry that remote working will not permanently cut demand.
InterContinental Hotels Group reported revenue per available room, a key industry metric, for the US hotels that make up more than half of its estate was up 6.8 per cent in the three months to September 30, compared with 2019. Group revpar was up 2.6 per cent compared with 2019.
Demand for business travel in the US was equal with pre-pandemic levels, while revenue from leisure travellers was up 13 per cent compared with the same period in 2019 “boosted by a strong summer vacation period and Labor Day”, the company said.
But IHG’s London-listed stock was down around 4.2 per cent in mid-morning trading to £43.72 after it fell short on its expansion targets. The company said it had increased its number of rooms by 2.6 per cent year on year, well below its 4 per cent target.
Chief executive Keith Barr said the group had proved its ability “to respond and adapt to opportunities and to macroeconomic uncertainties”.
He added that “against a backdrop of inflationary pressure in most economies around the world, the strength of IHG’s brands is clear”, with room rates up 11 per cent compared with 2019.
Analysts at Peel Hunt said business travel and energy costs would prove to be key to IHG’s performance for the rest of the year. “The outturn for the year depends on the strength of business demand in the final quarter, as leisure declines in relative importance, and on energy costs, which may become more material for the group,” they said in a note.
Separately, IHG announced that its chief financial officer Paul Edgecliffe-Johnson, who has been at the company for nearly two decades, would leave in six months to join Flutter, the world’s biggest online betting group.
Edgecliffe-Johnson helped steer IHG’s share buyback programme, which was launched over the summer. IHG said the programme was 59 per cent complete.