Global hotel giant IHG Hotels & Resorts has issued an upbeat outlook for the remainder of the year, saying it continues to feel confident about profit targets despite economic uncertainties.
IHG owns many of the world’s most iconic hotel brands, including Holiday Inn, InterContinental and Crowne Plaza.
The group’s first quarter trading update shows that it saw a 3.3% year-on-year jump in RevPAR (revenue per available room), which is a key growth metric for hotels, in the first three months of the year. It opened 86 new hotels during the quarter, equating to 14,600 new rooms and has a global pipeline of 334,000 new rooms and 2,265 new hotels.
Elie Maalouf, Chief Executive, IHG Hotels & Resorts, said: “We celebrated the opening of 14.6k rooms across 86 hotels in the quarter, well over double the same period last year. A strong signings performance of 25.8k rooms across 158 properties was also well ahead of 2024, leading to a +9.4% year-on-year increase in our pipeline. This included 5.7k rooms across 30 hotels from our acquisition in February of premium urban lifestyle brand, Ruby. Since acquiring the brand, a further two Ruby signings have already been added. Demand for quick-to-market conversions to IHG’s brands and enterprise platform continues to be high, representing around 60% of openings and 40% of organic signings in the quarter.
“Looking ahead, while noting that some forward economic indicators have softened, our comparable on-the-books global revenue for Q2 continues to show growth on the same position a year ago. Our ability to capture demand across geographies and chain scales, as well as being heavily weighted to domestic stay occasions, are resilient strengths of our business. As a result, while still early, we remain on track to meet full year consensus profit expectations.
“The outlook of attractive long-term structural growth drivers for both demand and supply remain unaltered for the travel industry and for IHG in particular. The power of our growth algorithm comes from the compounding nature of increasing fee revenues through the combination of RevPAR, system expansion and ancillary fee streams, which in turn helps to grow margins and, with our strong cash generation, allows us to reinvest in our business and return surplus capital to shareholders. Notwithstanding shorter term macro-economic uncertainties, we remain confident in the strength and resilience of IHG’s enterprise platform and our ability to capitalise further on our scale, leading positions and the fundamental growth drivers for our markets.”
