InterContinental Hotels Group PLC (IHG), for the first quarter ended March 31, reported global RevPAR increased 2.6% compared to the same period last year, with the Americas down 0.3%, Europe, Middle East, Africa and Asia (EMEAA) up 8.9% and Greater China up 2.5%.
“Global RevPAR in the first quarter of 2024 continued to grow, up 2.6%, reflecting the strength of our globally diverse footprint,” said Elie Maalouf, CEO, IHG Hotels & Resorts. “There was an impressive performance in EMEAA, which was up nearly 9%. The Americas, having already recovered very strongly, was broadly flat due to some adverse calendar timing, and Greater China grew by 2.5% and will continue to benefit from returning international inbound travel this year. Global occupancy moved up to 62% and ADR increased by a further 2% as pricing remained robust, reflecting the complete return of leisure, business and group travel.”
Other Q1 highlights:
- Gross system size growth up 5.0% year-over-year (YOY) and up 0.7% year-to-date (YTD); opened 6,300 rooms (46 hotels), an 11.1% increase YOY adjusting for Iberostar
- Net system size grew 3.4% YOY and is flat YTD; adjusting for Iberostar, net system size is up 3.2% YOY and flat YTD
- Global system at the end of the quarter was 946,000 rooms (6,368 hotels); 66% across midscale segments and 34% across upscale and luxury
- Signed 17,700 rooms (129 hotels) in Q1, up 7.1% YOY; the global pipeline at the end of the quarter was 305,000 rooms (2,079 hotels), up 6.6% YOY
- Signed an agreement in Germany with NOVUM Hospitality in April, adding up to 17,700 rooms (119 hotels) to global system growth
- Changes to System Fund arrangements, improving owner economics and growing IHG’s ancillary fee streams
“We opened more than 6,200 rooms across 46 hotels in the quarter, and signed nearly 18,000 rooms across 129 properties to increase our pipeline by 6.6% YOY,” said Maalouf. “Compared to the same quarter last year, room openings rose 11% adjusting for Iberostar, and signings grew 7%. ‘Quicker to market’ conversions generated more than 35% of openings and signings in the quarter, reflecting the attractiveness of our brands and enterprise platform. In April, we were delighted to announce an agreement with NOVUM Hospitality that will double IHG’s presence in Germany through even more conversions and strengthen our position in a priority market for domestic, inbound and outbound travel. The deal adds up to 119 hotels (17,700 rooms) to our global system over the coming years. This further validates the attraction to hotel owners of joining IHG’s enterprise and boosts confidence for our net system growth outlook.”
He added, “In our separate announcement today, changes to our System Fund arrangements will improve economics for our owners and the continued growth in ancillary fee streams will deliver value through our growth algorithm, consistent with our strategic priorities. The combined power of our platform and efficiency of our operating model will continue to drive IHG forward. We are excited about the future and our ability to capitalize further on our strengths, scale and leading positions, and on the attractive, long-term demand drivers for our markets.”
Regional performance
Americas
Q1 RevPAR was down 0.3% YOY, with U.S. RevPAR down 1.9% and up 11.3% in aggregate across Canada, Latin America and the Caribbean. Occupancy was 63.1%, down 1.1 percentage pts, and ADR was up 1.5%. Groups demand was strongest, leisure was also ahead YOY and business revenue was slightly lower. The timing of Easter led to lower demand in late March including for business travel, but was followed by higher demand in April, such that trading over the last eight weeks in aggregate has seen U.S. RevPAR ahead of last year.
Gross system growth was 2.3% YOY and 0.6% YTD, with 3,100 rooms (26 hotels) opened in the quarter. Net system size growth was 1.0% YOY and flat YTD. A further 5,100 rooms (61 hotels) were added to the pipeline, representing a broadly similar signings pace to the same quarter last year. Signings included nine Garner and eight avid hotels, 11 hotels across the Holiday Inn brand family, a further 25 across IHG’s extended-stay brands and five across Luxury & Lifestyle.
EMEAA
Q1 RevPAR was up 8.9% YOY, with occupancy up 2.7 percentage pts to 66.7% and rate up 4.5%. By major geographic markets within the region, RevPAR ranged from up 16.9% in Japan, 10.2% in Australia, 7.4% in the Middle East and 6.2% in Continental Europe, to 2.4% in the U.K., reflecting the differing stages of recovery already achieved by this time last year,.
Gross system growth was 7.2% YOY and 0.4% YTD, with 1,000 rooms (10 hotels) opened in the quarter. Net system size growth was 5.7% YOY (4.8% adjusting for Iberostar) and was down 0.2% YTD. There were 5,400 rooms (28 hotels) added to the pipeline, up from 5,200 in the comparable quarter, with conversions representing around 38% of all signings and which included the first three Garner properties in Japan that quickly followed the brand launch across the EMEAA region.
Greater China
Q1 RevPAR was up 2.5% YOY, with occupancy up 0.7 percentage points to 53.5% and rate up +1.3%. Tier 1 cities saw RevPAR up 7.3%, reflecting the continued return of international travel. The performance in Tier 2-4 cities was down 2.1%, given tougher comparatives from resurgent demand this time last year and expanded outbound travel to Southeast Asia.
Gross system growth was 10.4% YOY and 1.2% YTD, with 2,100 rooms (10 hotels) opened in the quarter. Net system size growth was 7.9% YOY. A further 7,200 rooms (40 hotels) were added to the pipeline. Development activity continues to gain momentum following the extended period of COVID-related restrictions, with signings up 22% YOY.
