IHG: Americas Corp. Third Quarter Travel Revenue Returns to Pre-COVID-19 Levels

IHG Hotels & Resorts’ third-quarter business travel revenue in the Americas region returned to 2019 levels, the company announced Friday in a quarterly financial update.

The company reported a 27.4% year-over-year gain in revenue per available room systemwide at $86.63, with the average daily rate increasing 12.6% to $128.49 and 7.8 occupancy. percentage points to 67.6%.

From pre-pandemic levels in 2019, system-wide RevPar increased 2.7%, while ADR increased 11.3% and occupancy decreased 5.7 percentage points.

“The continued return of business and group travel has been accumulating every quarter throughout the year,” IHG CEO Keith Barr said in a statement, adding that “commercial fares were up 7 percent and group activity also saw rates move into positive territory at 2019 levels.”

Regional Highlights

IHG noted that its third-quarter RevPar performance was strongest in the Americas region: up 16.6% from 2021 and “way ahead,” up 6.8% from 2019. Occupancy was 70, 7%, down 3.4 percentage points from 2019. According to the report, ADRs increased 9.6 percent year over year and 11.9 percent from 2019 to $136.98.

Improvements were also seen in the Europe, Middle East, Asia and Africa region, which is now back to pre-pandemic RevPar levels, up 0.1% from 2019. Occupancy in this region increased to 69 .2%, but still 8.5 percentage points below 2019 levels

For the Greater China sector, RevPar was down 20% from 2019 benchmarks but up 11.7% from 2021. Occupancy was 55%, down 11% from 2019. The rate is down 4% in 2022, but since RevPar is down 42% in Q2, IHG sees these numbers as a “significant improvement.” According to Barr, IHG is “pleased with the group’s overall momentum.”

Recovery and growth, and moving on

In terms of growth, IHG is seeing a bit of a boost, with a 4.3% year-over-year increase in gross system size and an additional 8,000 rooms across 51 new hotels in the third quarter, which IHG said was similar “to the second quarter and onwards”. first quarter,” with 89 more in the pipeline, according to Barr.

Amid an inflationary environment and rising costs, IHG remains focused on strategy and expanding its brand portfolio, according to Barr.

“Year-to-date, our newest brands have grown to account for 12% of transfers, while conversions have risen to over 30% of opens,” according to Barr.

As for staff conditions and meeting the needs of rising occupancy levels, IHG reported that employment levels are “high” globally.

With occupancy levels 8 percentage points higher than in 2021, IHG is 6 percentage points below pre-pandemic levels, according to the report. This kind of recovery suggests IHG may return to 2019 benchmarks by next year if demand remains “robust,” according to Barr.

“We continue to explore a number of organic opportunities to help meet our net system size growth ambitions,” according to Barr.

CFO to leave

IHG’s Friday update also announced the resignation of chief financial officer Paul Edgecliffe-Johnson, who will leave that role in six months, and his seat on the board of directors, after 18 years, eight of which were as chief financial officer, with the company. . Edgecliffe-Johnson will join gaming and booking company Flutter Entertainment as CFO and CEO.

IHG has begun the process of naming a successor, according to the company.

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