Holiday Inn owner IHG hit by ongoing US weakness

By Raechel Thankam Job

(Reuters) -InterContinental Hotels Group flagged persistent weakness in the U.S. market on Thursday, sending shares in the Holiday Inn owner 1.4% lower, despite a marginal third quarter rise in a key revenue metric.

IHG said global revenue per available room (RevPAR) rose 0.1% in the quarter ended September 30, compared with analysts' forecasts of a 0.1% fall in a company-compiled consensus.

The hotel operator said growth in its international markets made up for weak performance in the U.S., its largest market, and it expects to finish 2025 in line with consensus profit and earnings expectations.

IHG, known for its budget-friendly Holiday Inn and Avid Hotel brands, is banking on domestic demand to support growth as international travel to the U.S. cools amid tariff-driven disruptions and heightened border scrutiny.

"If domestic travel is to offset weakness in inbound, we are not seeing it yet, and leisure is the key segment to focus on", said Citi analyst Leo Carrington.

IHG CEO Elie Maalouf said the United States continued to experience softer trading conditions, with its RevPAR 1.6% lower in the quarter, compared with growth of 1.2% in the prior year.

"We think the headwinds to the development market in the U.S. are slowly subsiding," Maalouf said in a call with analysts while noting that the lower international inbound travel to the U.S. had taken a toll on the leisure market.

IHG's outlook aligns with Hilton Worldwide, which on Wednesday cut its 2025 room revenue forecast, citing the impact of the ongoing U.S. government shutdown on travel demand. 

    The U.S. shutdown, now into its fourth week, has sparked widespread concerns in the corporate sector over potential disruptions to consumer spending, business travel and financial developments, including public share listings.    IHG reported 2.8% third quarter growth in room revenue across Europe, the Middle East, Africa and Asia, while in Greater China it fell 1.8% as domestic demand remains subdued.

(Reporting by Raechel Thankam Job in Bengaluru; Editing by Mrigank Dhaniwala, Jacqueline Wong and Alexander Smith)