IHG reported an increase of 10.5% in RevPAR versus 2022 in its third-quarter results. The Americas saw a 4.1% increase, with a 15.9% increase for EMEAA 15.9% and 43.2% increase for Greater China.
Other highlights include:
- Q3 group RevPAR +12.8% vs 2019, with Americas +13.8%, EMEAA +17.5% and Greater China +9.3%
- Average daily rate +4.1% vs 2022, +14.8% vs 2019; occupancy +4.1%pts vs 2022, (1.3)%pts vs 2019
- Gross system size growth +6.2% YOY, +3.1% YTD; opened 7.7k rooms (50 hotels) in Q3, similar to 2022
- Net system size growth +4.7% YOY, +2.0% YTD; excluding Iberostar, +2.9% YOY, +1.6% YTD
- Global system of 930k rooms (6,261 hotels); 67% across midscale segments, 33% across upscale and luxury
- Signed 16.8k rooms (123 hotels) in Q3, +27% vs 2022; global pipeline of 292k rooms (1,978 hotels), +5.1% YOY
- On track to have returned $1B to shareholders in 2023 through share buybacks and dividend payments
“Travel demand remained very healthy during the quarter, and I would like to thank all our teams for supporting another strong trading period,” said Elie Maalouf, CEO, IHG Hotels & Resorts. “Q3 RevPAR increased 10% versus 2022 and 13% versus 2019, representing the fifth quarter of sequential improvement exceeding pre-pandemic highs. Greater China continued its excellent rebound with RevPAR now above 2019, which the Americas achieved in the second quarter of last year and EMEAA in the fourth quarter. Group-wide occupancy was 72%, just one percentage point behind 2019 which further confirms the near-complete return to pre‑Covid levels of demand. Pricing remained very robust. As well as year‑on‑year RevPAR growth in each of our three regions, it was also pleasing to see rooms revenue growth for each of leisure, business and group travel.”
He continued, “We opened nearly 8,000 rooms across 50 hotels in the quarter and added 17,000 rooms to our pipeline across 123 properties. Year-to-date, signings are up by 16%. Reflecting the breadth and attractiveness of our portfolio, ‘quicker to market’ conversions have increased this year to be over one-third of openings and signings. This will soon be further boosted by our new midscale conversion brand, Garner, which became franchise‑ready in September. There was good development progress across all our categories, and our six Luxury & Lifestyle brands continue to represent a growing proportion of IHG with over 800 open and pipeline hotels in that category.
“As IHG powers forward to provide industry-leading advantages for our guests and hotels owners across our brand portfolio, loyalty program and entire enterprise platform, we expect to close-out 2023 with very strong financial performance. Looking further ahead, whilst there are macro-economic uncertainties and some short-term financing challenges holding back new hotel development, I am excited about the future for IHG and the attractive, long-term demand drivers for our markets. As such, we’re confident in the strengths of IHG’s business model, scale and in our strategic priorities to capture sustainable, profitable growth.”
Americas
Q3 RevPAR was up 4.1% vs 2022 (up 13.8% vs 2019), with U.S. RevPAR up 3.1% (up +11.8% vs 2019). Occupancy was 72%, up 0.7% on last year (down 0.6% vs 2019), while rate was up 3.1% (up 14.8% vs 2019). Leisure rooms revenue in Q3 for the total estate was 3% higher than last year, and up 22% on 2019 levels, driven by another strong summer vacation period.
Gross system size growth was 3.9% YOY, with 2,000 rooms (18 hotels) opened in the quarter. Net system size growth was 2.9% YOY. A further 5,100 rooms (55 hotels) were added to the pipeline. Signings included eight avid hotels, 16hotels across the Holiday Inn Brand Family and a further 26 across extended-stay brands.
EMEAA
Q3 RevPAR was up 15.9% vs 2022 (up 17.5% vs 2019). Occupancy was 73%, up 4.7% on last year (and down 4% vs 2019), while rate was up 8.6% (up 23.9% vs 2019). By major geographic markets within the region, Q3 RevPAR vs 2019 ranged from up 31% in Continental Europe, 18% in the U.K., and 16% in Australia, to down just 1% in the Middle East and 4% in Japan.
Gross system size growth was 10.0% YOY, with 2,000 rooms (11 hotels) opened in the quarter. Net system size growth was 8.4% YOY (5.2% excluding Iberostar). There were 4,800 rooms (31 hotels) added to the pipeline, with conversions representing around 40% of these. Luxury & Lifestyle brands performed strongly, also representing 40% of all signings.
Greater China
Q3 RevPAR was up 43.2% vs 2022 (up 9.3% vs 2019). Occupancy was 67%, up +14.1% (and up 2.3% pts vs. 2019), whilst rate was up 13.0% (up 5.6% vs 2019). Tier 1 cities saw RevPAR vs 2019 down 3%, reflecting the more gradual return of international travel; the performance was stronger across Tier 2-4 cities which were up 13%.
Gross system size growth was 8.1% YOY, with 3,600 rooms (21 hotels) opened in the quarter. Net system size growth was 5.5% YOY. A further 6,900 rooms (37 hotels) were added to the pipeline. As development activity continues to improve following the extended period last year of COVID-related restrictions in the region, this was the highest quarterly signings performance since 2021.
