RevPAR was up 28% for Intercontinental Hotels Group (IHG) for the third quarter compared to 2021.
Other Q3 highlights:
- Q3 group RevPAR +2.7% vs. 2019, with Americas +6.8%, EMEAA (0.1)% and Greater China (20.0)%
- ADR +13% vs 2021, +11% vs. 2019; occupancy +8% pts vs 2021, -6% pts vs. 2019
- Gross system size growth +4.3% YOY; opened 8,000 rooms (51 hotels) in Q3, similar to Q2 and ahead of Q1
- Underlying removal rate -1.7% YOY; removals YTD equate to an annualized underlying rate of -1.3%
- Net system size growth +2.6% YOY on an adjusted basis
- Global system of 888,000 rooms (6,061 hotels); 67% across midscale segments, 33% across upscale and luxury
- Signed 13,200 rooms (89 hotels) in Q3, similar to Q2 and last year; global pipeline of 278,000 rooms, +2.9% YOY
Q3 RevPAR was up 6.8% vs 2019 (up 17% vs 2021). U.S. RevPAR was up 6.2% vs 2019. Across the region, occupancy was 71%, down 3% pts vs. 2019, while rate was up 12%. Demand was boosted by a strong summer vacation period and Labor Day in the U.S., with leisure rooms revenue 13% higher than 2019 for the quarter overall. Sequential improvement in business travel also resulted in revenue from this category returning to 2019 levels. By brand for the region, Holiday Inn Express saw Q3 RevPAR exceed 2019 by10%, with similarly strong performances at our Staybridge Suites and Candlewood Suites extended-stay brands, and also Hotel Indigo.
Gross system size growth was +2.2% YOY, with 2,800 rooms (22 hotels) opened in the quarter. Net system size growth was +0.8% YOY on an adjusted basis. 5,300 rooms (50 hotels) were added to the pipeline, around 40% more than the prior quarter. Signings year-to-date of 16,900 (158 hotels) are more than 40% ahead of each of the last two years.
Q3 RevPAR was down just 0.1% vs 2019 (up 76% vs. 2021). Occupancy was 70%, down 9% pts vs. 2019, while rate was up 12%. The prior lifting of COVID-related travel restrictions drove strong sequential improvement, with the region having previously seen RevPAR down 10% in Q2 and down 33% in Q1 on 2019 levels. Leisure-driven revenue was 8% ahead of 2019 for the quarter. By major geographic markets within the region, the breadth of RevPAR performance generally reflected the amount of return of international travel, together with the level of seasonal leisure demand. Q3 RevPAR vs 2019 levels therefore ranged from up 11% in Continental Europe, up 7% in the U.K. and up 3% in Australia, to down 12% in the Middle East, down 19% in South East Asia & Korea and down 35% in Japan.
Gross system size growth was +5.9% YOY, with 1,400 rooms (9 hotels) opened in the quarter. Net system size growth was +3.6% YOY on an adjusted basis. There were 2,500 rooms (13 hotels) added to the pipeline.
Q3 RevPAR was down 20.0% vs. 2019 (up 12% vs. 2021). Occupancy was 55%, down 11% pts vs. 2019, while rate was down 4%. Having experienced RevPAR down 42% vs 2019 in Q1 and down 49% in Q2, there was significant improvement in the latest quarter as Covid-related travel restrictions eased. However, an increasing number of restrictions were reintroduced again towards the end of the quarter, with these continuing into October.
Gross system size growth was +8.7% YOY, with 3,800 rooms (20 hotels) opened in the quarter. COVID-related restrictions continued to impact the ability for new hotels to open, though the pace picked up from only five openings in Q1 and 14 in Q2. Net system size growth was +6.9% YOY on an adjusted basis. Signings also picked up from the prior quarter, with 5,400 rooms (26 hotels) added to the pipeline.
In a statement, Keith Barr, CEO, IHG Hotels & Resorts, said, “Strong trading in the third quarter helped our group-wide RevPAR exceed pre-pandemic levels. Leisure stays saw rooms revenue increase 12% on 2019, while the ongoing return of business and group travel has been building each quarter through the year. RevPAR performance in the Americas was well ahead compared to three years ago and the EMEAA region was back to broadly flat on 2019 levels. Improvements in Greater China reflected the lifting of some of the COVID-related travel restrictions and, while the potential for further lockdowns there continues, we are pleased with overall group momentum.
“Against a backdrop of inflationary pressure in most economies around the world, the strength of IHG’s brands is clear with rate up 11% on 2019. As well as leisure rates being up around 15% in the quarter, business rates were up by 7% and group activity also saw rate move into positive territory on 2019 levels. Employment levels globally remain high, which supports occupancy levels that are 8% pts up on last year and now just 6%pts below 2019. Demand has therefore remained robust, and more is still to return in a number of segments and countries.
“The industry is experiencing lower levels of new hotel opening activity, and with a particular impact from the restrictions in China. Despite this, in this latest quarter, we opened 51 hotels and signed 89 more into our pipeline. In the year to date our newer brands grew to be 12% of signings, while conversions increased to be over 30% of openings. We are also achieving the expected lowering of the removal rate to around 1.5%, with this driven by the success of the review activity undertaken last year that further improved the quality and consistency of our estate.
“We remain focused on our strategy to develop IHG’s portfolio of brands, invest in leading technology and transform our loyalty program. These appeal very strongly to hotel owners to join our enterprise platform, and we continue to explore a number of organic opportunities to help deliver on our ambitions for net system size growth. We have also proven the resiliency of our business model and the ability for IHG to respond and adapt to opportunities and to macroeconomic uncertainties. These reinforce the confidence we have in our ability to drive attractive levels of long-term, sustainable growth.”