China is leading recovery for InterContinenal Hotels Group but the European, Middle East and Africa region remains “most challenged”.
The global hotel giant reported that regional performance reflected variations in both the Covid vaccine rollout process and travel restrictions in the six months to June 30.
The owner of brands such as Holiday Inn and Crowne Plaza achieved a first half operating profit of $188 million – down 54% on the same pre-pandemic period in 2019 but up from $52 million in the first six months of 2020.
Pre-tax profits rose to $67 million from a $275 million loss in the same half last year.
Chief executive Keith Barr said: “Trading improved significantly during the first half of 2021, with travel demand returning strongly as vaccines roll out, restrictions ease, and economic activity rebuilds.”
Domestic leisure bookings are leading the way, particularly in the US and China.
“Essential business travel was a key element of our resilience throughout the pandemic, and we are now seeing more group activity and corporate bookings start to come back,” Barr added.
“These trends and the momentum in the business have continued in recent weeks, including in EMEAA where a lifting of travel restrictions in some markets is also now driving improvements in demand.
“With occupancy and rate continuing to improve, nearly 50% of our hotels achieved revpar [revenue per available room] above 2019 levels in July.
“As more development activity returns to the industry, the strength of IHG’s brand portfolio and the power of our scale, systems and platforms for owners is being clearly recognised. We opened 132 hotels in the half and signed 203, both sizeable increases on last year.”
He revealed plans for a new luxury and lifestyle brand aimed at attracting independent properties with the aim of attracting more than 100 hotels over the next ten years.
Barr said: “Over the last four years we’ve added five new brands to create a portfolio of 16, each targeting a specific segment and enhancing our market reach.
“The addition of a collection brand will provide high quality independent hotels access to the many benefits of IHG’s system, whilst retaining a property’s distinctive identity.
“There are currently around 1.5 million independently run rooms in the market segments we are targeting, and we expect the collection to attract more than 100 hotels within ten years.”
He added: “The actions we have taken during the last 18 months position us well to exceed our pre-pandemic level of growth and profitability.
“While there is a risk of trading volatility in the balance of the year, and discretionary business trips, group bookings and international travel will take time to fully recover, we are confident in the strength of IHG’s future prospects.”