IHG’s room revenue growth slows as Iran war offsets gains in US, China
Hospitality company is on track to meet market expectations for annual revenue and earnings
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[BERKSHIRE, UK] InterContinental Hotels Group’s (IHG) room revenue growth slowed in the second quarter as a sharp decline in the Middle East offset continued gains in the United States and China.
The Holiday Inn owner reported global revenue per available room (RevPAR) growth of 3.5 per cent in the three months to June, down from 4.4 per cent in the first quarter.
Demand from affluent travellers has remained resilient and was further supported by football World Cup matches held across the US, Canada and Mexico. However, the Iran war, now in its sixth month, has weighed on hotels and travel companies in the Middle East.
“While there are ongoing impacts from the Middle East conflict, including some wider disruption to international travel flows, we continue to expect these to be fully offset by growth in demand elsewhere,” CEO Elie Maalouf said.
US-listed rivals Hilton and Marriott said last month that demand in the US remained strong, helped by the World Cup, while affluent travellers continued to spend despite persistent inflation. Both companies also reported weaker revenue from the Middle East.
The Middle East, part of IHG’s second-largest EMEAA region and accounting for about 5 per cent of global revenue, recorded a 19 per cent drop in RevPAR in Q2. RevPAR rose 5.4 per cent in the Americas and 0.8 per cent in China.
IHG said that it was on track to meet market expectations for annual revenue and earnings. REUTERS
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