InterContinental reports strong RevPar increases as North American confidence returns
InterContinental Hotels Group has reported financial performance for the three months to the end of September, revealing comparable RevPAR growth of seven per cent during the period.
The hotel giant also welcomed 8,000 rooms to its inventory, leading to a net system increase of 2.7 per cent year on year to 697,000 rooms.
Richard Solomons, chief executive of InterContinental Hotels Group, said: “We delivered our best quarterly RevPAR performance in over two years with growth in each of our four regions.
“Performance in the US was particularly strong where RevPAR was up 8.7 per cent, demonstrating the excellent momentum in the business and the success of our winning strategy.”
IHG looked to the future, signing 16,000 rooms over the three month period, with 90 per cent of the group’s year to date signings located in priority markets.
This gives the hotel chain a pipeline of 190,000 rooms at quarter end, with over 45 per cent of those under construction.
Solomons added: “Our preferred brands reached several important milestones in the quarter.
“Staybridge Suites became the fastest growing brand in its segment to reach 200 open hotels, and Hotel Indigo opened its 60th hotel.
“InterContinental Hotels & Resorts reinforced its position as the largest global luxury hotel brand with record quarterly signings.
“While some of our markets face heightened uncertainty and risks, we continue to see strong momentum in the business and remain encouraged by current trading and positive booking trends.”
We continue to focus on enhancing our scale position and developing our high quality pipeline, opening 8k rooms in the period, signing 16k rooms into the system, and delivering solid net system size growth of 2.7%.
RevPAR was up 8.4 per cent in the third quarter and 7.5 per cent in the first nine months.
In the US, RevPAR was up 8.7 per cent in the third quarter and 7.5 per cent in the first nine months, the strongest quarterly US RevPAR growth in eight years.
Quarter three RevPAR growth in the US continued to be driven by record levels of demand, with comparable occupancy rates 1.7 per cent points above the previous third quarter peak, and 4.5 per cent growth in average daily rate.
Trading in the quarter was led by higher leisure demand and increased groups business, particularly at our Holiday Inn and Crowne Plaza hotels, where IHG outperformed the industry on a total RevPAR basis.
RevPAR was up 6.1 per cent in the third quarter and 5.3 per cent in the first nine months.
There were particularly strong performances from the UK and Germany, two priority markets.
The UK delivered double digit RevPAR growth reflecting strong performance in both London and the regions; and Germany drove high single digit RevPAR growth due to a favourable trade fair calendar.
InterContinental Paris - Le Grand reported quarter three RevPAR up 7.3 per cent following the completion in the second quarter of the renovation of the Salon Opera ballroom.
Asia, Middle East & Africa
RevPAR was up 4.4 per cent in the third quarter and 4.1 per cent in the first nine months.
IHG priority markets of Middle East, Indonesia and India performed strongly, with the latter benefiting from improved business confidence following the recent election. Japan and Australia performed solidly both delivering low single digit RevPAR growth.
Trading in Thailand has shown signs of returning to relative stability.
RevPAR was up 0.8 per cent in the third quarter and three per cent in the first nine months.
Trading was strongest in tier one cities, especially Shanghai, Guangzhou and Shenzhen with good levels of transient and corporate business.
Performance in certain tier two and three cities was impacted by new supply as these markets develop, and trading in Northern China remains challenging where there is higher contribution from government business.
RevPAR at InterContinental Hong Kong was up 5.4 per cent in the quarter with increased group business and corporate events, despite the disruption from the on-going redevelopment adjacent to this hotel.
IHG said it had seen “minimal impact” so far from recent protests in Hong Kong.
Net rooms at IHG were up 2.7 per cent year on year to 697,000 rooms, in some 4,760 hotels.
A total of 8,000 rooms in 59 hotels opened in the quarter, over 90 per cent of which were in priority markets where IHG is building on a established scale presence.
A further 4,000 rooms, in 31 hotels were removed from the system, mainly in the Americas, reflecting our continued focus on driving high quality growth.
InterContinental Hotels & Resorts – considered the World’s Leading Hotel Brand by the World Travel Awards - enhanced its position as the largest global luxury hotel brand with the signing of landmark hotels in Jakarta, Singapore and Los Angeles, where a 900-room new build InterContinental hotel will be the largest for the brand in the US.
In September, InterContinental New York Barclay closed for a major refurbishment, which will substantially reposition it as a flagship hotel when it reopens in approximately 18 months.
Hotel Indigo Paris Opera opened in the quarter, the first for the brand in France and 60th worldwide.
This took the brand to 119 hotels in the system and pipeline combined, with five hotels opened and 14 hotels signed so far in this its tenth anniversary year.
Staybridge Suites celebrated its 200th open hotel in the quarter; a milestone met faster than any other brand in its segment, with the opening of Staybridge Suites Denver.