InterContinental Hotels Group (IHG) has seen business travel “continue to strengthen” in the first half of the year as the company's average daily rate (ADR) rose by 7 per cent compared with the same period in 2022.
London-based IHG said that ADR in the first six months of 2023 was also up by 11 per cent compared with 2019, while occupancy is now just 1.3 percentage points lower than in 2019.
IHG’s new CEO Elie Maalouf said: “Travel demand is very healthy, with revpar (revenue per available room) improving year-on-year across all our markets and exceeding 2019 pre-pandemic peaks for four consecutive quarters.
“In the Americas and EMEAA (Europe, Middle East, Africa & Asia) regions, leisure demand has remained buoyant, and business and group travel continued to strengthen, while in Greater China, demand has rebounded rapidly.”
IHG also noted that group activity was returning with bookings for meetings and events now above 2019 levels for six consecutive months. Global revenue from these bookings was 36 per cent higher than pre-Covid at the end of June 2023.
Despite economic headwinds around the world, IHG added that there had been “no broad signs of consumer price resistance or cooling of leisure demand to date”.
The company added in its results statement: “The expected recovery in business demand has continued, with progress in the US indicating the potential elsewhere. Corporate rate negotiations in 2022 have supported ADR increases in 2023.”
IHG’s revenue for the first half of the year rose by 24 per cent year-on-year to $2.23 billion, while net profit more than doubled to $459 million compared with the same period of 2022.
The company said that in the EMEAA region, revpar had increased by 42 per cent year-on-year in the first half of 2023, boosted by corporate bookings and group activity “picking up pace as the post Covid-19 recovery continued”.
“The UK, which saw one of the earlier easing of restrictions, was up 18 per cent in Q2, with strong improvements in London leading to revpar rising by 22 per cent while the provinces were up 16 per cent,” added IHG.
“Elsewhere, the variances in performance largely reflected the timing of recovery following the easing of travel restrictions.”
This included a revpar increase of 27 per cent in continental Europe compared with the second quarter of 2022.
“While the comparatives to 2022 get tougher in the second half of the year and there are ongoing economic uncertainties, we expect revpar to remain positive year-on-year in each region,” said IHG.