IHG Hotels & Resorts reported demand improvement during the first quarter, led by hotels in the Americas and Greater China markets. Demand picked up in March, CEO Keith Barr said in a statement as the numbers were released, and improved further in April. “While the risk of volatility remains for the balance of the year, there is clear evidence from forward bookings data of further improvement as we look to the months ahead,” Barr said.
Occupancy averaged out at 40 percent for the quarter, although much like other companies, that metric improved month over month. The overall revenue per available room reflects a 23 percent reduction in occupancy, with rate sustained at approximately 80 percent of 2019 levels. Group RevPAR was down 50.6 percent compared to 2019 and down 33.7 percent versus 2020.
The improved group RevPAR performance was led by the Americas, Barr said, which grew to -43 percent versus 2019 levels compared to -50 percent in Q3 and Q4 2020. In the Europe, Middle East, Africa and Asia markets, ongoing lockdowns across much of the region meant RevPAR levels were largely unchanged from the previous two quarters. In Greater China, after temporary domestic travel restrictions were lifted, demand recovered quickly in March toward levels seen in the second half of 2020.
Across the Americas, RevPAR was down 43 percent from 2019 and down 28.1 percent from 2020. Occupancy was 46 percent, compared to quarters 1-4 of 2020 of 54 percent, 28 percent, 46 percent and 42 percent, respectively. In the U.S., RevPAR was down 40.4 percent from 2019. Spring break helped boost demand in March and April, and the booking window extended on strengthening demand for the summer vacation season. The region’s portfolio was 99 percent open at the end of March. Of the 54 hotels still temporarily closed, most are in the upscale and luxury segment.
System Size
Net system size growth has been broadly flat year to date. During the quarter, IHG opened 7,300 rooms across 56 hotels. Of those, 5,800 joined the Essentials and Suites brands, while 1,500 were added to the Premium and Luxury & Lifestyle divisions—two segments that Barr said are seeing “continued strong owner appetite for conversion opportunities.” This, he added, includes conversions to the Voco brand, which has secured more than 50 signings in more than 20 countries in fewer than three years since its launch.
The company also signed 14,500 rooms in 92 hotels last year. IHG’s total pipeline increased to 274,000 rooms in 1,820 hotels.
At the same time, IHG removed 9,500 rooms across 61 hotels during the quarter. Of those, 6,300 rooms were across 31 Holiday Inn and Crowne Plaza hotels in the Americas and EMEAA markets.
In the Americas, gross system growth was 0.8 percent year-to-date, adding 4,100 rooms in 39 hotels. With the removal of 7,300 rooms in 47 hotels, however, including 4,500 Holiday Inn and Crowne Plaza rooms, net growth was -0.6 percent year-to-date. The pace of signing activity has picked up sequentially over recent quarters, with 3,700 rooms in 39 hotels added to the pipeline in Q1, representing 21 hotels across the Essentials brands and 18 across the Suites brands.
The company’s portfolio now includes 884,000 rooms across 5,959 hotels.
“As the rollout of vaccines becomes more established, travel restrictions lift, and economic activity rebuilds, traveler demand will continue to grow and generate further momentum in an industry recovery over the course of the year,” Barr said. “Coupled with our resilience as a business and the important work we’re doing to support our owners, develop our brands and expand our pipeline, we’re confident that IHG is well positioned for sustained growth.”