Dive Brief:
- The U.S. hotel market “demonstrates both stability and normalization,” according to IHG Hotels & Resorts CFO Michael Glover, who noted on a third-quarter earnings call that the company’s U.S. RevPAR grew 1.2% in Q3.
- Development in the quarter was “particularly notable,” according to IHG CEO Elie Maalouf, with the company signing more than 19,000 rooms in Q3, up 14% year on year. “Quicker to market” conversions represented more than half of the quarter’s openings, Maalouf said.
- In the Americas, group travel was the strongest demand driver in the quarter, with comparable rooms revenue up 7% year on year. Business transient travel was up 3% year on year in the region and leisure was “only slightly lower,” according to Glover. Looking forward to Q4, Glover expects demand generated from hurricane recovery in the U.S. to positively impact hotel performance in the region.
Dive Insight:
IHG’s overall RevPAR grew 1.5% year on year in Q3, with average daily rate up 1.7% and occupancy down 0.1%. Maalouf attributed RevPAR growth to IHG’s “globally diverse” footprint and strong group and business travel demand.
In the quarter, IHG’s global pipeline — now 327,000-plus rooms — grew 12% year on year. In the Americas, specifically, IHG opened 9,500 rooms in Q3.
“In the first three quarters of this year, we have opened almost the same number of rooms as we did for the whole of 2023, and we still expect further acceleration,” said Glover, discussing the Americas region.
Americas-region openings in the quarter included 11 Holiday Inn brand family hotels, one of which is part of a dual-branded property with Candlewood Suites; two Voco hotels; two Kimpton properties; and one InterContinental. Glover also pointed to the October opening of the flagship Regent Santa Monica Beach, which IHG expects to “drive further progress at the very top end of luxury.”
It was also “another great quarter for Garner,” according to Glover, who noted the young brand signed seven more hotels in Q3, taking it to 92 hotels open and in the pipeline globally. IHG’s vice president for Garner, Karen Gilbride, previously told Hotel Dive that the company is “bullish and excited” about the conversion-forward brand.
On the call, Glover also reflected on the impact of recent hurricanes in the U.S., which could boost hotel performance in the region.
“If you look at hurricanes, what typically happens is you have people fleeing and moving away from the affected areas,” he said. “Then you have the government coming in — the army, FEMA, things like that.” Those visitors are then usually followed by contractors and suppliers responsible for making repairs, Glover added.
On the earnings call, Maalouf noted the strength of meetings and events, projecting that they will continue to boost hotel performance in 2025. “What's on the books for groups and meetings, cumulatively, for all future time periods, is about 25% ahead of this time last year,” he said, adding, “These on-the-book statistics will still give confidence of future total revenue growth to come.”
