In reporting IHG Hotels & Resorts’ fourth-quarter and full-year 2022 earnings, CEO Keith Barr noted the company’s sequential improvement each quarter in global revenue per available room compared to 2019.
IHG’s strongest recovery was in the Americas, with RevPAR up 3.3 percent from 2019 and up 9 percent in Q4 alone. In the Europe, Middle East, Africa and Asia markets, RevPAR was up 8.8 percent in the quarter but down 7.5 percent for the full year. The Greater China market was down 38 percent in the fourth quarter and 42 percent for the year, which the company blamed on the scale of travel restrictions that were still in place. Average daily rate improved 18 percent from 2021 and 8 percent from 2019, while occupancy was up 9 percentage points from 2021 and down 7 percentage points from 2019. Adjusted earnings before interest, taxes, depreciation or amortization were $896 million, up 42 percent from 2021.
“In 2022 we saw demand return strongly in most of our markets, pushing group RevPAR back close to 2019 levels and fee margin ahead,” Barr said in a statement. “It’s particularly pleasing that in the second half of the year we exceeded 2019 levels for both RevPAR and profitability. Looking to 2023, while there are economic uncertainties, we expect continued strong leisure demand in many markets, alongside further return of business and group travel and the ongoing reopening of China.”
The company reported an operating profit of $828 million for the year, up 55 percent from 2021.
The company reported gross system growth of 5.6 percent year over year, with adjusted net system size growth of 4.3 percent year over year. IHG opened and added 49,400 rooms in 269 hotels for a global total of 12,000 rooms in 6,164 hotels. The company signed 80,300 rooms in 467 hotels and has a global pipeline of 281,000 rooms in 1,859 hotels, up 3.9 percent year over year.
In total, IHG signed 467 hotels in 2022 and opened 269, which led to net system growth of more than 4 percent. The company has a further 1,800 hotels in its pipeline, which Barr said represents future growth of over 30 percent of today’s system size. Of note, the Holiday Inn brand family delivered around a third of IHG’s hotel signings and half of its openings.
“Our strategy over the last five years has significantly strengthened our brand portfolio and seen substantial investment to innovate our technology and distribution platforms,” Barr said. “Our recent agreement with Iberostar adds our 18th brand and substantially increases our resort and all-inclusive presence, and we continue to explore further new opportunities like this for additional growth through exclusive partners. Meanwhile, the other six brands we have added since 2017 already contribute more than 10 percent of our pipeline, and our Luxury & Lifestyle portfolio is now 13 percent of our system size and 20 percent of our pipeline as we increase our exposure to higher fee income segments.”