IHG projects ‘less turbulent’ trading condition for US hotels this year

InterContinental Hotels Group has reported declines in the key metric of revenue per available room (revpar) in the US for the majority of 2025.

 

IHG, reporting annual financial results, revealed that US revpar fell by 0.1% for the year, with growth of 3.5% in the first quarter moving to a decline of 0.9% in the second quarter “driven by the shift in timing of Easter between March and April and the onset of a reduction in certain types of business and leisure travel, such as lower international inbound demand and less government travel”.

 

The revpar level dropped by 1.6% in the third quarter and 2% in the final three months of the year.

 

The Holiday Inn parent said that the most recent quarter faced “a tougher year-over-year comparison due to hurricane-related demand in 2024”.

 

“Rooms revenue for the overall region on a comparable hotel basis in 2025 was strongest for business bookings which were up 2% year on year, whilst groups was down 1% and leisure was -2% on 2024 levels,” IHG reported.

 

Outside of the US, revpar for IHG’s Americas region rose by 4% for the year, with growth in each of Canada, Mexico and the Latin America and Caribbean sub-region.

 

IHG added: “Looking ahead to 2026, less turbulent trading conditions in the US and stronger demand are expected for the industry.

 

“Research and consumer surveys point to continued prioritisation of spend on travel, and business surveys indicate expectations for increasing corporate travel budgets in 2026.

 

“Economic growth and investment, stable employment, favourable tax policies and the anticipated further easing of interest rates are all expected to support this.

“Major events such as the Fifa World Cup will add additional demand, and, particularly from Q2 2026 in the US, some comparatives become easier given the slowdown in certain types of travel that occurred onwards from Q2 2025.”

 

The hotel giant reported a 13% increase in annual operating profit of more than $1.2 billion on a 7% rise in revenue to almost $2.5 billion.

 

Trends by guest stay led to global rooms revenue in 2025 for business bookings growing by 2% over 2024, groups by 1%, while leisure was flat.

 

“This builds on growth in all three stay occasions in 2024, and the recovery versus 2019 that was already fully completed for all three stay occasions by the end of 2023,” IHG noted.

 

Chief executive Elie Maalouf said: "Thanks to the hard work of our teams we delivered excellent financial performance in 2025 and in the face of some turbulent trading conditions.

 

“There was also further progress on our clear strategy to unlock IHG’s full potential for all stakeholders.

 

“We accelerated the growth of our brands, expanded in key markets, strengthened hotel owner returns, drove ancillary fee streams, delivered cost efficiencies and returned surplus capital to shareholders. Collectively, this powered adjusted EPS [earnings per share] growth of 16%.

 

“We opened a record 443 hotels in the year and added another 694 into our pipeline, including the highest ever hotel openings and signings in Greater China, as owner demand for our brands continues to increase globally. 

 

“With over 6,900 open hotels around the world, as we look to the future, our pipeline of a further 2,300 properties is equivalent to system growth of 33%.

 

“We are delighted to launch today our new brand - Noted Collection - in the large and fast-growing premium segment, which I am confident will build on the well-established successes already achieved with our other collection and conversion brands - Vignette, voco and Garner.

 

“The launch of Noted Collection follows the acquisition in 2025 of the Ruby brand, which further enriches our Premium portfolio with an exciting, distinct and high-quality offer for both guests and owners in popular city destinations.

 

“Ruby signings are growing and this year we have already successfully taken the brand into the US market.”