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IHG's first-half revenue gauge inches up, but China weighs
[BENGALURU] InterContinental Hotels Group (IHG) reported a marginally higher first-half room revenue on Tuesday, though fewer business travellers in China and protests in Hong Kong led to a decline in demand from Greater China.
The owner of brands such as Crowne Plaza, Holiday Inn and Hotel Indigo said revenue per available room (RevPAR), the industry's key performance measure, rose 0.1 per cent for the six months ended June 30. In Greater China, where the group operates around 400 hotels, revenue per available room (RevPAR) fell 0.3 per cent, IHG said.
Keith Barr, who took over as chief executive in July 2017, has steered the company towards affluent Chinese customers to lessen dependence on highly mature US markets, while aggressively rebranding to compete against the likes of Marriott International Inc and Hilton Worldwide Holdings Inc .
"Whilst there are always macro-economic and geo-political uncertainties in some markets, our broad geographic spread and the resilient, cash-generative nature of our business gives us confidence in the outlook for the balance of the year," Mr Barr said in a statement.
Several of IHG's competitors and an industry group have warned that escalating trade wars and a slowing world economy were set to dampen spending on business travel and leisure, including that in the Chinese market.
Last month, Europe's largest hotel group Accor predicted another "record year" after a strong quarter, but warned the trade standoff between Washington and Beijing made improvement difficult in China.
Hilton also predicted a weaker second half in China and cited the global slowdown as it cut its full-year outlook for a key revenue gauge, even as its quarterly profit beat forecasts.
China let the yuan breach the key 7-per-dollar level on Monday for the first time in more than a decade on Monday, in a sign Beijing might be willing to tolerate more currency weakness that could further inflame tensions with the United States.
IHG, the owner of brands such as Crowne Plaza, Holiday Inn and Hotel Indigo said comparable RevPAR increased 0.1 per cent in the Americas for the first-half but declined 0.7 per cent in the second-quarter hurt by the shift in the timing of Easter and the lapping of hurricane related demand at the start of the quarter.
First-half operating profit rose 14 per cent to US$457 million.