Dive Brief:
- IHG Hotels & Resorts reported third-quarter earnings for 2023, noting group RevPAR, up 10% over the same quarter last year, due in no small part to China’s domestic travel recovery.
- The hotel group also detailed strategy for certain promising segments, particularly luxury and lifestyle and extended stay, with CEO Elie Maalouf noting strength in conversation signings as well.
- Though group bookings still remain below pre-pandemic levels, the gap has narrowed to just one percentage point behind 2019, which “confirms the near-complete return to pre-COVID levels of demand,” Maalouf said in an earnings call.
Dive Insight:
IHG first saw group RevPAR exceed 2019 levels in the third quarter of 2022. The same quarter this year was the fifth quarter of sequential improvement since then.
Uncertain economic factors are still affecting some aspects of IHG’s business, however, with Maalouf noting that “challenges to financing across the wider commercial real estate sector” are holding back new development in the short-term.
For future growth, IHG is leaning on its luxury lifestyle and extended stay segments in particular. The company’s six luxury lifestyle brands continue to become a larger proportion of the company’s pipeline, constituting 26% of global signings as of Q3.
In the U.S. specifically, CFO Michael Glover noted that nationwide RevPAR grew 3.1% year on year, with leisure revenue up 3% due to a strong summer vacation period.
IHG completed signings for 26 extended stay properties in the U.S. during the third quarter, as the company attempts to cash in on a boom in extended stay hotels.
In tandem with its earnings report, IHG released a video interview with Jane Mackie, SVP of global marketing, luxury brands, discussing the company’s luxury lifestyle portfolio and strategy.
Mackie noted that IHG has 500 luxury and lifestyle hotels open today and over 300 in the pipeline.
One of IHG’s luxury lifestyle brands, InterContinental, is in the midst of a “brand evolution” that aims to revamp the chain to better meet the changing desires of modern luxury travelers.
IHG announced the creation of its midscale conversion brand Garner in August. Nationwide, the number of hotel conversions has hit a record high recently, given the model is faster to market than ground-up developments.
On the earnings call, Maalouf noted he expects Garner to “further accelerate” IHG’s conversion signings.
