In reporting IHG Hotels & Resorts' first quarter trading update, CEO Keith Barr noted that average daily rate is up 11 percent over the first quarter of 2022 and 10 percent over the same quarter in 2019.
The company also announced that Barr will be stepping down as group chief executive officer of InterContinental Hotels Group and from the IHG board as of June 30. Barr will be succeeded by Elie Maalouf, a member of IHG’s board and executive committee, who has led IHG’s Americas business as regional CEO for the past eight years. Maalouf will take up his new position on July 1 and will be based in the U.K. to lead the business.
"We’ve seen a good start to the year, with continued strong trading in both the Americas and [Europe, Middle East, Africa and Asia], and an excellent rebound in demand in Greater China since the lifting of travel restrictions," Barr said in a statement. "Leisure demand has remained buoyant, and there has been further return of business and group travel as expected.
"The guest appeal of our brands has continued to support pricing, with rate up 10 percent versus 2019 and occupancy now almost back to pre-Covid levels. For owners, the strength of our enterprise platform and investments we’ve made to enhance our portfolio and widen our offer continues to attract demand and drive growth. We signed over 16,000 rooms across 108 hotels into our development pipeline in the quarter, in line with our performance in 2022. A third of all signings were across our six Luxury & Lifestyle brands, as we accelerate our growth in the segment."
First quarter group RevPAR was up 33 percent compared to 2022. IHG's strongest recovery in the quarter was in Greater China with revenue per available room up 75 percent, up 64 percent in the Europe, Middle East, Africa and Asia markets, and up 18 percent in the Americas.
IHG’s strongest recovery compared to 2019 was in the Americas, with RevPAR up 11.1 percent from 2019. In the Europe, Middle East, Africa and Asia markets, RevPAR was up 9.7 percent in the quarter. The Greater China market was up 9.1 percent in the first quarter. Average daily rate improved 11 percent from 2022 and 10 percent from 2019, while occupancy was up 10 percentage points from 2022 and up 2 percentage points from 2019.
The company reported gross system size growth of 5.8 percent year over year and 0.9 percent year to date. IHG opened 8,400 rooms in 45 hotels in the first quarter. Net system size growth is 4.2 percent year over year on an adjusted basis and up 0.4 percent year to date.
"We opened 8,000 across 45 hotels in the quarter, and while financing challenges for the wider commercial real estate industry are holding back new hotel development and opening activity fully returning to normal, we anticipate improving levels as the year progresses," Barr said. Meanwhile, conversions increased to be over a third of both openings and signings in the period.
"Whilst comparatives to 2022 get tougher from the second quarter onwards and there are ongoing economic uncertainties, IHG has continued to prove the resiliency of its business model and we remain confident about the strong tailwinds for attractive long-term, sustainable growth and value creation. We look forward to making additional progress over the course of 2023 in further evolving our brand portfolio, increasing RevPAR and expanding our system size.”