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Holiday Inn owner IHG’s Q1 revenue up 2.6%, leisure travel demand remains strong

Published by Wanda Rich

Posted on May 3, 2024

Featured image for article about Top Stories

By Chandini Monnappa

(Reuters) -Holiday Inn owner Intercontinental Hotels Group (IHG) posted a 2.6% rise in first-quarter room revenue on Friday and said it continues to expect demand for leisure travel to remain strong.

Hotel chain owners, including IHG, have benefited from a tourism boom over the past year, although some US hoteliers expect a slowdown this year.

“Travel still remains key to what people want to do,” CEO Elie Maalouf said in a media call.

“There was an impressive performance in EMEAA (Europe, Middle East, Asia and Africa), which was up nearly 9%,” Maalouf said in a statement.

Japan saw a strong performance due to several factors including a weaker yen, increased travel around the Chinese New Year holidays and easing of travel restrictions in the region when compared to previous years, Maalouf added in the call.

Room revenue was up 16.9% in Japan and while there was growth in the Middle East, Continental Europe and UK, room revenue growth was down 0.3% in U.S.

Maalouf in February laid out his strategy of targeting high single-digit growth in fee revenue by increasing revenue per room and the number of hotels annually on average over the medium to long term.

Last month, IHG announced a long-term agreement with NOVUM Hospitality that would see IHG double its presence in Germany to more than 100 hotels.

However, shares of the London-listed company, which operates more than 6,000 hotels globally, was down 1.27% at 7,788 pence as of 0742 GMT.

The Q1 result was a small miss versus our estimates and consensus, analysts at Jefferies said in a note. IHG’s first quarter revenue growth was up 2.6%, lower than Jefferies estimate of growth of 3.4%.

For first quarter 2024, the owner of the Regent and Crowne Plaza hotel chains said its occupancy was up 2 basis points and the gross system size growth was up 5%.

(Reporting by Chandini Monnappa and Yadarisa Shabong in Bengaluru; Editing by Subhranshu Sahu and Michael Perry)