Diverging from Peers, IHG Meetings Recovery Lags

First-half results for InterContinental Hotels Group showed business travel revenues making month-on-month gains, with June showing just a 1 percent deficit compared to 2019. Rising room rates lifted those results, as business travel volumes themselves remained approximately 10 percent behind pre-pandemic levels, with lingering weakness in the group sector, in particular, “but rates are still up.” Confidence reigned among executives for business travel including meetings and events, however, with IHG CEO Keith Barr seeing “no indicators that the recovery trajectory is abating.”

Overall performance metrics for IHG improved in the first half of 2022, compared to the same period in 2021. Increased demand in most markets lifted occupancy 10 percentage points higher than 2021. Increased pricing power improved average daily rate by 24 percent and resulted in group revenue per available room up by 51 percent for the half.

Regionally for the second quarter, which showed significant sequential gains over the first, ADR hit $134.10 in the Americas, up 20 percent year over year, with occupancy rising 8.5 percentage points to 69.6 percent. For Europe, Middle East, Africa and Asia (not including China) ADR reached $127.35, up 35 percent year over year with occupancy rising nearly 29 percentage points to 64 percent. Greater China, which continued its cautious border strategy, remained far behind other market in recovery for Q2. ADR fell nearly 9 percent YOY to $65.75, with occupancy tumbling nearly 20 percentage points to 39 percent.

First Half Earnings & Pipeline

IHG’s adjusted year-on-year net system size grew 3 percent, despite exits in Russia. The company opened 15,000 rooms across nearly 100 hotels. IHG added 31,000 rooms to its pipeline across 210 hotels.

Revenue in the first half of 2022 was $840 million, an increase of 49 percent over 2021 but still down 17 percent compared to the same period in 2019.

Elizabeth West  www.businesstravelnews.com