Holiday Inn owner IHG gets boost as US rebound outweighs China weakness

IHG, which also owns the Crowne Plaza, Regent and Hualuxe hotel chains, said the industry had seen a shift in pattern of demand this year from domestic tourism in China to overseas travel to other Asia Pacific countries.

Holiday Inn-owner InterContinental Hotels Group reported a 3.2% rise in revenue per available room in the second quarter as a strong rebound in the US offset weakness in China.

Shares in IHG, which have been pressured in the past week after a warning from US rival Marriott and US recession fears, rose 4% in early trade.

IHG, which also owns the Crowne Plaza, Regent and Hualuxe hotel chains, said the industry had seen a shift in pattern of demand this year from domestic tourism in China to overseas travel to other Asia Pacific countries.

Growth in revenue per available room (RevPAR), a key performance measure for the hotel industry, picked up in the second-quarter from 2.6% in the first three months, IHG said.

"RevPAR growth accelerated in the latest quarter, reflecting a strong US rebound in Q2 and the breadth of our global footprint, and development activity continues to increase," chief executive Elie Maalouf said.

Bigger rival Marriott International last week lowered its forecast for 2024 room revenue growth, citing softer domestic travel demand in China and North America. The warning from Marriott had also sent IHG shares tumbling on the day.

The hotel industry has benefited from higher demand and pricing as leisure travel rebounded from the pandemic, but it has had to contend with weakness in China and funding issues holding back new hotel developments in the US.

Reuters