DENHAM, ENGLAND The world’s largest hotel company reports gains in all three key metrics for the third quarter year over year, improving RevPAR by 8.1% on stronger demand.
Total gross revenue from all hotels in IHG’s portfolio grew US$5.1 billion in the quarter, up 13% at constant currency. Occupancy was up 4 percentage points, while ADR rose a modest 1.8%.
The quarter saw a return to rate growth for the first time since early 2009. Global RevPAR was up 8.1%, with Greater China RevPAR increasing 24.4% and Europe, Middle East and Africa RevPAR grew at its fastest pace for two years.
IHG’s global inventory netted an additional 1,293 guestrooms and four hotels in the quarter. The company added 13,690 guestrooms across 88 hotels to its pipeline of signed projects, taking the pipeline to 198,141 guestrooms and 1,293 hotels.
Third quarter operating profit increased 14% and year-to-date operating profit increased 19%.
“While visibility is still limited, business confidence and corporate profitability remain positive and, with supply anticipated to stay below historic levels, industry trends look favorable,” says CEO Andy Cosslett. “With over 1,200 hotels in our development pipeline we expect to create over 160,000 new jobs in the next few years. We are focused on driving share, improving margins while investing behind growth and creating value for shareholders. Our balance sheet is in excellent shape and we continue to generate significant cash flow.”
The relaunch of the Holiday Inn brand is nearing completion, with 2,815 hotels operating under the new standards, 82% of the total estate. The relaunched hotels are outperforming strongly, IHG says; in the United States, third quarter RevPAR for hotels relaunched for more than one year increased 8%, which is 6 percentage points higher than non-relaunched hotels.
The global rollout of the Hotel Indigo brand continues, with six signings in the quarter and 20 year to date, including high-priority markets like Bangkok and Taipei. The first Hotel Indigo in Asia opens in Shanghai later this year. The total Hotel Indigo pipeline is now 59 hotels, 13 outside the Americas.