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 percent year-over-year gain in systemwide revenue per available room to $86.63, with average daily rate up 12.6 percent to $128.49 and occupancy up 7.8 percentage points to 67.6 percent.
From pre-pandemic 2019 levels, systemwide RevPar increased 2.7 percent while ADR increased 11.3 percent and occupancy declined 5.7 percentage points.
“The ongoing return of business and group travel has been building each quarter through the year,” IHG CEO Keith Barr said in a statement, adding that “business rates were up by 7 percent and group activity also saw rate move into positive territory on 2019 levels.”
IHG noted its third-quarter RevPar performance was strongest in the Americas region—up 16.6 percent from 2021 and “well ahead”—up 6.8 percent—from 2019. Occupancy was 70.7 percent, down 3.4 percentage points from 2019. According to the report, ADR was up 9.6 percent year over year and 11.9 percent from 2019 to $136.98.
Improvements also were seen in the Europe, Middle East, Asia and Africa region, which is now back to pre-pandemic RevPar levels, up 0.1 percent from 2019. Occupancy in this region was up to 69.2 percent, but still 8.5 percentage points below 2019 levels.
As for the Greater China sector, RevPar was down 20 percent from 2019 benchmarks, but up 11.7 percent from 2021. Occupancy was 55 percent—down 11 percent from 2019. Rate was down 4 percent in 2022, but given RevPar was down 42 percent in Q2, IHG sees these numbers as “significant improvement.” According to Barr, IHG is “pleased with overall group momentum.”
Recovery and Growth, and Moving Forward
In terms of growth, IHG is having a bit of spurt, with a 4.3 percent year-over-year increase in gross system size, and an additional 8,000 rooms across 51 new hotels in Q3, which IHG noted was similar “to Q2 and ahead of Q1,” with 89 more in the pipeline, according to Barr.
Amid an inflationary environment and rising costs, IHG remains focused on strategy and furthering its portfolio of brands, according to Barr.
“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,” according to Barr.
In terms of staffing conditions and meeting the needs of growing occupancy levels, IHG reported employment levels are “high,” globally.
With occupancy levels 8 percentage points higher than 2021, IHG is 6 percentage points below pre-pandemic levels, according to the report. This kind of recovery suggests IHG may be back to 2019 benchmarks by next year if demand remains “robust” according to Barr.
“We continue to explore a number of organic opportunities to help deliver on our ambitions for net system size growth,” according to Barr.
CFO to Depart
IHG’s Friday update also announced the resignation of CFO Paul Edgecliffe-Johnson, who in six months will step down from that role and his seat on the board of directors, after 18 years—eight of which were as CFO—with the company. Edgecliffe-Johnson will join booking and gaming company Flutter Entertainment as CFO and executive director.
IHG has initiated the process of appointing a successor, according to the company.
Source by www.businesstravelnews.com