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The owner of the Crowne Plaza and Holiday Inn hotel chains said business travel revenue from the U.S. USA have returned to pre-pandemic levels, a hopeful sign for the industry that remote work will not permanently reduce demand.
InterContinental Hotels Group reported revenue per available room, a key industry metric, for U.S. hotels that make up more than half of its properties, rose 6.2 percent in the three months to Sept. 30, compared with 2019. Group revpar rose 2.7 percent. cent compared to 2019.
Demand for business travel in the United States was on par with pre-pandemic levels, while revenue from leisure travelers increased 13 percent compared to the same period in 2019 “driven by a strong summer vacation period and the Labor Day,” the company said.
But IHG’s London-listed shares were down around 4.2 per cent in mid-morning trading to £43.72 after it fell short of its expansion targets. The company said it increased its number of rooms by 2.6 percent year-on-year, well below its target of 4 percent.
Chief executive Keith Barr said the group had demonstrated its ability “to respond and adapt to macroeconomic opportunities and uncertainties”.
He added that “against a backdrop of inflationary pressure in most economies around the world, the strength of IHG’s brands is clear,” with rates up 11 percent compared to 2019.
Analysts at Peel Hunt said business travel and energy costs would be key to IHG’s performance for the rest of the year. “The result for the year depends on the strength of business demand in the last quarter, since leisure is decreasing in relative importance, and energy costs, which may become more material for the group,” they point out in a note.
Separately, IHG announced that its chief financial officer Paul Edgecliffe-Johnson, who has been with the company for almost two decades, would leave in six months to join Flutter, the world’s largest online betting group.
Edgecliffe-Johnson helped lead IHG’s share buyback program, which was launched over the summer. IHG said the program was 59 percent complete.
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