Dive Brief:
- IHG Hotels & Resorts reported gains in global RevPAR and adjusted EBITDA in 2023, with the two metrics up 16.1% and 21% year over year, respectively, according to an earnings report published Tuesday. The company also saw operating profits increase 23% year over year for full-year 2023, rising above $1 billion for the first time.
- IHG also saw significant portfolio growth in 2023, with its gross system increasing 5.3% year over year. In 2023, the company opened 275 hotels, or 47,900 rooms, up 16% year over year. It also signed 556 hotels, or 79,200 rooms, up 26% year over year, the report detailed.
- IHG CEO Elie Maalouf, who assumed the role in July, said performance and portfolio growth is expected to continue in 2024, bolstered by “attractive, long-term drivers of demand” for travel.
Dive Insight:
In addition to record performance gains in 2023, IHG saw its hotel portfolio expand. In the fourth quarter alone, the company opened 117 hotels, or 19,200 rooms, and signed 194 hotels, or 28,300 rooms, resulting in one of IHG’s highest quarters for portfolio growth, the report detailed.
Hotel conversions contributed to that growth, representing 39% of openings and 36% of signings in 2023, according to the report.
In the fourth quarter, the company opened the first location of its newly launched midscale conversion brand Garner. The company expects to open more than 500 Garner hotels during the next decade.
Kevin Schramm, IHG’s SVP of development for mainstream brands in the U.S. and Canada, previously told Hotel Dive that in 2024 hotel conversions will remain popular options, as they allow owners to “navigate the economic and logistical challenges of new construction and gain faster access to the resources needed to open.”
Schramm also forecasted growing interest in the midscale segment, which makes up the majority of IHG’s portfolio.
As of year-end 2023, IHG’s global system totaled 6,363 hotels, or 946,000 rooms, weighted 66% across midscale segments and 34% across upscale and luxury, the report detailed.
IHG plans to continue expansion in the luxury and lifestyle space, which is “particularly growing fast,” the report said.
In January, IHG appointed Leanne Harwood as senior vice president, managing director for Luxury & Lifestyle Americas to drive performance of IHG’s six brands in the space. The Kimpton brand, specifically, is slated to expand this spring, with a Denver opening.
