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InterContinental Hotels Group PLC on Tuesday said trading continued to be strong in the first half of 2022, with increased demand for travel driving profit to more than double for the period.
For the six months ended June 30, the FTSE 100-listed Holiday Inn- and Crowne Plaza-owner posted a pretax profit of $299 million, more than tripled from $67 million the same period a year before, on revenue which grew 52% year-on-year to $1.79 billion from $1.18 billion.
Revenue per available room - key metric for the hotel industry - rose by more than half compared to the first half of 2021. IHG attributed the robust revenue growth to an improvement in trading conditions, with Covid-related restrictions being lifted in several of the group's markets.
Comparable RevPAR grew 51% for the first half of 2022, compared to a year prior. Compared to pre-pandemic levels of 2019, however, RevPAR still was down 11%.
Regionally, the Americas benefited from leisure demand in the US, helped by a rise in corporate and group bookings. Trading in the Europe, Middle East & Africa also improved; however Greater China was held back as localised travel restrictions remained in place, IHG noted.
In the first half, IHG opened 96 hotels, though 59 hotels were removed due to the ceasing of all operations in Russia, meaning the Buckinghamshire, England-based chain now has a global estate of 6,028 hotels.
IHG resumed its interim dividend at 43.9 US cents per share, reflecting a 10% rise from its last interim payout, made for the first half of 2019. In addition, the company announced a $500 million share buyback programme which will start immediately and end on January 31 next year at the latest.
‘Alongside leisure stays, the return of business and group travel demand continued to build over the period, and our hotels are seeing increased pricing power due to the strength of IHG's brands, loyalty programme and technology platform,’ said Chief Executive Officer Keith Barr.
‘The recovery in demand and pricing led to group profit more than doubling versus 2021, with profitability in the Americas now ahead of 2019. The EMEAA region also saw excellent improvement in performance. Whilst Greater China had a tough period as Covid-related travel restrictions were tightened, we have since seen a strong recovery in the most recent months, although risk of further volatility in trading in the region still remains,’ Barr added.
Shares in IHG were down 1.9% at 4,920.00 pence on Tuesday morning in London.
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