4 days ago
Holiday Inn owner sees profits rise despite pressure from global uncertainty
Holiday Inn owner InterContinental Hotels Group has revealed a slowdown in global room revenue as economic uncertainty due to tariffs and geopolitical tensions takes its toll.
The London-listed group reported that revenue per available room (revpar) – a key measure for the hotel industry – pulled back sharply to 0.3% in the second quarter from 3.3% in the previous three months.
The US, which is its largest market, slipped into reverse, with revpar down 0.9% in the second quarter, reflecting the impact on 'business and leisure travel in light of macroeconomic developments', according to the group.
In the UK, where InterContinental Hotels Group (IHG) has around 355 UK hotels, revpar fell 0.8% over the first half as a whole.
But the overall half-year out-turn for global room revenue was better than expected, at 1.8%, helping shares rise nearly 7% in morning trading on Thursday.
IHG – which also owns chains such as Crowne Plaza and Regent – reported a 13% rise in operating profits to 604 million US dollars (£452 million) for the six months to June 30.
Pre-tax profits jumped to 633 million dollars (£474 million) from 472 million dollars (£353 million) a year ago.
Elie Maalouf, chief executive of IHG Hotels & Resorts, said: 'While some shorter term macroeconomic uncertainties remain, many are subsiding, and we are confident in the ongoing successful delivery of our growth.'
The group cheered passing the milestone for one million rooms, having opened a record number of hotels in the first half, and said it continues to expand, with a pipeline of more than 2,200 hotels.
'Whilst in some countries geopolitical risk and the economic outlook present shorter-term challenges and uncertainties, overall conditions for the global industry remain positive for continued long-term growth, supported by stable employment markets and robust levels of business activity and economic growth,' the group said.
Julie Palmer, a partner at Begbies Traynor, said: 'InterContinental Hotels has published another steady set of results that suggest the business remains on track, even as signs of softening demand emerge in more mature markets like the US.
'The slight dip in US revpar reflects broader economic uncertainty, heightened geopolitical tensions and more cautious consumer spending, but growth across other regions has helped soften the blow and maintain overall momentum.'
