IHG Hotels & Resorts said RevPAR rose 3.2% globally in the second quarter versus the same time a year ago, but noted deteriorating fundamentals in China, a recurring theme echoed by fellow global hotel companies.
RevPAR in the Americas increased by 2.5% in the second quarter, while China saw its RevPAR fall 7%.
Total revenue jumped 4% to $2.32 million.
In the second quarter, IHG opened 80 hotels (totaling 11,700 rooms), representing sequential improvement on 6,300 in Q1.
IHG signed 255 hotels in the quarter (39,400 rooms), up from 17,700 rooms in the first quarter. New signings in the second quarter rocketed 123% YOY in total, or up 23% adjusting for Iberostar and NOVUM.
The first half of the year saw the company opening 126 new hotels, totaling 18,000 rooms, and signing a record 384 properties (57,100 rooms), which equals to more than two hotels a day. These included the first six openings and 118 signings from the agreement with NOVUM Hospitality, which helps double IHG’s presence across Germany and keeps the company on track for net system size growth expectations, Maalouf said.
CONVERSIONS
New brands constitute more than a quarter of the 384 new signings. The company’s new midscale brand, Garner, contributed to the high number of new signings this year, Maalouf said. IHG signed over 80 properties under Garner since the brand was launched in 2023. Garner opened its inaugural hotel in the U.S. in December 2023, less than three months since the brand was launched, and has since expanded globally to IHG’s EMEAA region.
In the first half of the year, conversion projects accounted for more than half of all sales, Maalouf said.
“Conversions continue to rise in importance, globally, and present an increasing share of system growth. Both the progress we are making with Garner and the agreement with NOVUM are testament to this,” Maalouf said during the call, adding that conversion signings increased from 17% of hotels signed in 2017 to 36% in 2023.
Although new-build signings are yet to reach the pre-pandemic levels, owner confidence has been improving, with 8% more new builds signed in H1 YOY, Maalouf said.
HOLIDAY INN SUCCESS
Holiday Inn, IHG’s massively popular brand, has been instrumental in driving the company’s overall growth. IHG signed 200 Holiday Inn properties in the past 30 months and opened nearly 90. There are now more Holiday Inn hotels and rooms than there were at the end of 2021.
“The Holiday Inn brand never stands still. Our owners continue to invest in the brand too. Some 17% of the Holiday Inn estate in the Americas will be new or recently refurbished, with 80 new renovations actively in progress. Today, the brand has over 1,200 hotels in more than 80 countries, with another over 300 hotels in the pipeline,” Maalouf said.
IHG’s total global estate now stands at 6,430 hotels totaling 955,000 rooms.