Crowne Plaza-owner IHG shares climb 4% as hotel operator taps tourism boom  

Company targeting high single-digit growth in fee revenue by increasing revenue per room, chief executive says

The Crowne Plaza hotel, Santry, near Dublin Airport:  Hotel chain owners, including IHG, have benefited from a tourism boom over the past year and as travel demand is expected to surpass pre-pandemic level.

Crowne Plaza and Holiday Inn owner IHG posted slightly better-than-expected annual room revenue and said it expected to return more than $1bn to shareholders in 2024 as the hotel chain operator enjoyed strong travel demand.

London-listed IHG shares, which climbed by more than 4% following the statement, have soared in the past year as global tourism has boomed. It also owns the InterContentintal and over 10 other hotel brands or chains across more than 6,360 properties the company operates across the world. 

Chief executive Elie Maalouf also laid out his strategy, saying the company was targeting high single-digit growth in fee revenue by increasing revenue per room, or RevPar, and the number of hotels annually on average over the medium to long term.

"The travel industry has attractive, long-term drivers of demand, and the strength of our brand portfolio and enterprise platform will continue to boost our RevPAR and system size growth," said Mr Maalouf, who took over the top job last July after leading the group's largest region, the Americas, for about nine years.

Hotel chain owners, including IHG, have benefited from a tourism boom over the past year and as travel demand is expected to surpass pre-pandemic levels, other players such as European airlines are entering 2024 with strong outlooks despite economic uncertainties.

TUI, Europe's largest travel operator, reported a stronger-than-expected first quarter earlier this month. But players in the US, such as hotel operators Hilton Worldwide and Marriott International and online travel agency Expedia, expect demand to grow more slowly this year.

Finance chief Michael Glover told journalists IHG was growing in its key markets, the US and China, and also in other regions including the Middle East, Southeast Asia, Korea and Japan.

IHG is also looking to build the scale of its luxury and lifestyle properties, but not at the expense of its mid-scale business, Mr Glover said.

IHG reported global revenue per available room, a key performance indicator for the hotel industry, of 16.1% year-on-year, compared with analysts average expectation of 15.7%.

The owner of the Crowne Plaza, Regent and Hualuxe hotel chains launched a new $800m share buyback programme. "Overall, this is a solid set of results showing the strong business model and the midterm guidance reiterates that," Bernstein analyst Richard Clarke wrote in a research note.

"Only concern is the under performance of lower chain scales, particularly in the Americas," Mr Clarke added. 

• Reuters and Irish Examiner