Global News

Third Quarter trading update to 30 September 2022

  • Q3 group RevPARa +28% vs 2021; +2.7% vs 2019, with Americas +6.8%, EMEAA (0.1)% and Greater China (20.0)%
  • Average daily rate +13% vs 2021, +11% vs 2019; occupancy +8%pts vs 2021, -6%pts vs 2019
  • Gross system size growth +4.3% YOY; opened 8.0k rooms (51 hotels) in Q3, similar to Q2 and ahead of Q1
  • Underlying removal rate -1.7% YOY; removals YTD equate to an annualised underlying rate of -1.3%
  • Net system size growth +2.6% YOY on an adjusted basis
  • The global system of 888k rooms (6,061 hotels); 67% across midscale segments, 33% across upscale and luxury
  • Signed 13.2k rooms (89 hotels) in Q3, similar to Q2 and last year; global pipeline of 278k rooms, +2.9% YOY

Keith Barr, Chief Executive Officer, IHG Hotels & Resorts, said:

“Strong trading in the third quarter helped our group-wide RevPAR exceed pre-pandemic levels. Leisure stays saw rooms revenue increase 12% on 2019, while the ongoing return of business and group travel has been building each quarter through the year. RevPAR performance in the Americas was well ahead compared to three years ago and the EMEAA region was back to broadly flat on 2019 levels. Improvements in Greater China reflected the lifting of some of the Covid-related travel restrictions and, while the potential for further lockdowns there continues, we are pleased with overall group momentum.

Against a backdrop of inflationary pressure in most economies around the world, the strength of IHG’s brands is clear with rate up 11% on 2019. As well as leisure rates being up around 15% in the quarter, business rates were up by 7% and group activity also saw rate move into positive territory on 2019 levels. Employment levels globally remain high, which supports occupancy levels that are 8%pts up on last year and now just 6%pts below 2019. Demand has therefore remained robust, and more is still to return in a number of segments and countries.

The industry is experiencing lower levels of new hotel opening activity, and with a particular impact from the restrictions in China. Despite this, in this latest quarter, we opened 51 hotels and signed 89 more into our pipeline. In the year to date our newer brands grew to be 12% of signings, while conversions increased to be over 30% of openings. We are also achieving the expected lowering of the removal rate to around 1.5%, with this driven by the success of the review activity undertaken last year that further improved the quality and consistency of our estate.

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We remain focused on our strategy to develop IHG’s portfolio of brands, invest in leading technology and transform our loyalty programme. These appeal very strongly to hotel owners to join our enterprise platform, and we continue to explore a number of organic opportunities to help deliver on our ambitions for net system size growth. We have also proven the resiliency of our business model and the ability for IHG to respond and adapt to opportunities and to macroeconomic uncertainties. These reinforce the confidence we have in our ability to drive attractive levels of long-term, sustainable growth.”

Tags: Inflation, Revenue, third quarter, trading, Update

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