In a quarterly financial update given Friday, IHG Hotels & Resorts revealed that its third-quarter (Q3) business travel revenue in the Americas region had climbed back to 2019's pre-pandemic levels.
The IHG portfolio consists of 17 hotel and resort brands-including names well-known to American consumers-such as InterContinental, Kimpton, Six Senses, Crowne Plaza, Holiday Inn and Staybridge, as well as IHG One Rewards, one of the world's largest hotel loyalty programs.
For Q3, the company reported a systemwide revenue per available room (RevPar) year-over-year (YOY) increase of 27.4 percent, up to $86.63, with an average daily rate (ADR) gain of 12.6 percent up, rising to $128.49, and occupancy levels up 7.8 percentage points to 67.6 percent.
In comparison to pre-pandemic 2019 levels, systemwide RevPar grew 2.7 percent, while ADR increased 11.3 percent and occupancy declined 5.7 percentage points.
According to Business Travel News, IHG CEO Keith Barr said in a statement, "The ongoing return of business and group travel has been building each quarter through the year," also adding, "business rates were up by 7 percent and group activity also saw rate move into positive territory on 2019 levels."
Regional Performance
IHG noted that its Q3 RevPar performance was highest in the Americas region, rising 16.6 percent over 2021 and up 6.8 percent from 2019. Occupancy levels were at 70.7 percent, 3.4 percentage points below the same period in 2019. ADR in the region was shown to be up 9.6 percent from last year and 11.9 percent from 2019, coming in at $136.98.
The region encompassing Europe, Middle East, Asia and Africa also saw improvement, with RevPar rising back to pre-pandemic levels, and even up 0.1 percent from 2019. Regional occupancy was up to 69.2 percent, but still fell 8.5 percentage points below 2019 levels.
In the Greater China sector, RevPar was still 20 percent less than the 2019 benchmarks, but up 11.7 percent over last year. Occupancy was measured at 55 percent, down 11 percent from 2019. ADR in the region was down four percent, but considering that RevPar was down 42 percent in the second quarter, IHG said it views these numbers as a "significant improvement". Barr said the company is "pleased with overall group momentum".
Immediate Outlook
IHG is experiencing something of a growth spurt, with its gross system size increased 4.3 percent YOY and 8,000 rooms added across 51 new properties in Q3. IHG noted that this was similar "to Q2 and ahead of Q1," and that it currently has 89 more hotels in the pipeline.
Barr disclosed that, amid rising costs and record economic inflation, the company remains focused on strategy and growing its brand portfolio. "In the year to date, our newer brands grew to be 12 percent of signings, while conversions increased to be over 30 percent of openings," he said.
Addressing concerns about staffing conditions amid growing occupancy levels, IHG reported that its global employment levels were "high". Occupancy levels now being eight percentage points above what they were in 2021, IHG is just six percentage points away from reaching pre-pandemic levels.
This degree of recovery suggests that the company may attain 2019 benchmarks by next year, assuming that demand continues to be "robust", as Barr put it. He asserted, "We continue to explore a number of organic opportunities to help deliver on our ambitions for net system size growth."
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