IHG Hotels & Resorts posted strong performance in the first quarter 2024, with global RevPAR rising 2.6% year-over-year. The performance was primarily led by robust performance in the EMEAA market, where RevPAR climbed almost 9% YOY.
Despite a strong recovery, Americas’ RevPAR remained flat due to adverse calendar timing, as pointed out by IHG CEO Elie Maalouf, adding that Greater China’s RevPAR increased 2.5% and will continue to benefit as international inbound travel returns this year.
RevPAR in the Americas fell to -0.3% YOY, with U.S. RevPAR slipping to -1.9%. Occupancy stood at 63.1%, down -1.1% pts. The timing of Easter led to lower demand in late March, including for business travel, but was followed by higher demand in April.
With steady leisure and a continued resurgence in business and group travel, IHG’s global occupancy jumped 62%, while ADR increased 2% as pricing stayed strong.
In EMEAA, RevPAR rose 8.9% YOY, as occupancy increased by 2.7% pts to 66.7%. RevPAR in Greater China increased 2.5% YOY, with occupancy up 0.7%pts to 53.5%. The performance in Tier 2-4 cities declined by -2.1%, as a result of tougher comparatives from resurgent demand this time last year and expanded outbound travel to South East Asia.
Globally, IHG opened 46 rooms totaling more than 6,200 room through the quarter and signed roughly 18,000 rooms in 129 hotels, which saw pipeline increasing by 6.6% YOY. Room openings was up 11% from the same time last year, adjusting for Iberostar, while signings increased 7%.
“Quicker to market conversions” generated more than 35% of openings and signings in the quarter, Maalouf said.
EXPANSION IN GERMANY
The hotel giant has high hopes on its long-term agreement with NOVUM Hospitality, which will double IHG’s hotel presence in Germany. Announced on April 15, the agreement will add 108 open hotels (totaling 15,334 rooms) and 11 properties (2,369 rooms) under development into IHG’s system by 2028. The open hotels will be converted in phases this year, with the majority to transform in the next 24 months.
Besides growing its estate in Germany, one of the largest hotel markets in Europe, the agreement will also increase IHG’s global system size by up to 1.9% in the coming years. As part of the agreement, 52 hotels will join through a collaboration between Holiday inn and the niu, NOVUM’s flagship, upper midscale brand. Fifty-six hotels will convert to Garner, while 11 will transform into Candlewood Suites, marking the brands’ debuts in Europe.
NOVUM will adopt IHG’s brands and systems across its entire portfolio and will become the group’s biggest global franchisees. The agreement also includes an exclusive arrangement for upcoming NOVUM hotels to join IHG’s brands and enterprise system.