IHG Hotels & Resorts is set to launch a new brand targeted at midscale conversions, the company said during its first-half earnings call. After establishing the company’s presence in the upper-midscale space with Holiday Inn and Holiday Inn Express, IHG said the new brand would be a leading choice for travelers in the midscale space, accelerating the company’s growth in a segment that is already valued at $14 billion in the U.S. market alone.
Though the company did not reveal the brand’s name, more than 100 hotels and their owners are said to have shown interest in the new brand, said IHG’s CEO Elie Maalouf, who assumed the top spot in July.
“Conversions represent a major growth opportunity for us, generating around 40% of first half openings and signings globally, and we see an increasing desire from owners to quickly realize the benefits of IHG’s scale and strong enterprise,” Maalouf said.
The U.K.-based hospitality company reported a strong trading performance in H1 2023, with RevPAR up +24% YOY. This reflected further sequential improvement compared to pre-pandemic levels, with Q1 +6.8% and Q2 +9.9%.
While leisure demand was consistent and business and group travel continued to improve in the Americas and EMEAA regions, demand quickly rebounded in Greater China. H1 RevPAR in the Americas jumped +11% YOY, +42% in EMEAA and +94% in Greater China, reflecting the different levels of travel norms in place till H1 2022.
ADR in H1 2023 was up +7% compared to the same period in 2022 and +11% compared to 2019. Occupancy was up +9 percentage points compared to 2022 and just 1.3 percentage points lower than in 2019.
The company reported a trailing 12-month adjusted EBITDA of $996 million, which was +23% compared to H1 2022, with net debt adjusted EBITDA ratio of 2.3x.
Total revenue increased +24% to $2,226 million, compared to $1,794 million in 2022.
The company opened 108 hotels totaling nearly 21,000 rooms till June, which was +40% more than H1 2022. The company now has 6,2227 hotels totaling 925,000 rooms in its global portfolio.
IHG signed 239 rooms (34,200 rooms) till June, which was +11% more than H1 2022. The company’s global pipeline now stands at 1,931 hotels with a total of 286,000 rooms, up +2.9% YOY.
More than a quarter of all the signings were across IHG’s six Luxury & Lifestyle brands as the company continues to expand in the higher fee income segment, Maalouf said.
“The investments we’re making in our powerful enterprise platform are delivering results for guests and owners – be it the breadth of attractive brands we now have in place, the excellent impact of our new mobile app, or the strength of our IHG One Rewards program, which has seen enrollments jump by +60% since launch a year ago.”