Written by: Nicholas Hyett | Hargreaves Lansdown
InterContinental (IHG) reported a 66% increase in third quarter revenue per available room (RevPAR) compared to 2020. However, this remains 21% behind 2019 levels. The decline versus pre-pandemic levels reflects occupancy of 60%, with pricing in line with 2019.
Recovery in RevPAR has been driven by domestic leisure demand, which drove occupancy back towards 2019 levels in certain markets. Discretionary business and international trips are showing signs of recovery.
IHG shares were broadly flat in early trading.
Domestic holidays, particularly in the US, saw international hotel giant IHG deliver a reasonably healthy set of third quarter numbers. True there is some way to go before the group reaches the heights it achieved in 2019, but given the travel restrictions that continue to affect many markets this is a pretty good start.
The group is notable for having stayed profitable throughout the pandemic, no mean feat in the travel industry. However, it is still taking the opportunity to rebalance its estate, exiting poorer performing hotels. That means the group has actually stood still on room numbers over the last 12 months – which is something of a rarity in a company which believes there is considerably more opportunity for consolidation in its core US and Chinese markets."
With signs that more lucrative international and business travel may be getting back underway, management will be hoping we are now on the final leg up back to 2019 levels.