Holiday Inn parent InterContinental Hotels Group expects strong leisure travel demand across its global portfolio this year as it boosts direct booking technology.
The forecast came as the multi-brand hotels giant reported a recovery in group revenue per available room (revpar) last year close to 2019 pre-pandemic levels.
Leisure travel has seen the earliest pattern of recovery, followed by the growing return of business and group travel, according to the company.
IHG said its “digital-first” approach was driving a higher percentage of direct bookings, helping to create cost efficiencies while delivering data and insights to “optimise revenue management decisions”.
Mobile is now the group’s fastest-growing revenue channel following the introduction of a new app in 2022 to offer streamlined booking and faster check-in. Mobile now accounts for more than half of all digital bookings.
IHG added: “The improvements to the app are supporting further increases in direct bookings, loyalty engagement and incremental spend during stays.”
Chief executive Keith Barr said: “It’s particularly pleasing that in the second half of the year we exceeded 2019 levels for both Revpar and profitability.
“Looking to 2023, while there are economic uncertainties, we expect continued strong leisure demand in many markets, alongside further return of business and group travel and the ongoing reopening of China.”
His comments came as IHG reported a 50% rise in annual pre-tax profit to $540 million as revenue increased by 34% to $3.9 billion. Adjusted earnings [ebitda] were up by 42% to $896 million.
The results follow the company signing a deal with Iberostar Beachfront Resorts to add 12,400 rooms to its system in December.
Barr said: “Our recent agreement with Iberostar adds our 18th brand and substantially increases our resort and all-inclusive presence, and we continue to explore further new opportunities like this for additional growth through exclusive partners.
“Meanwhile, the other six brands we have added since 2017 already contribute more than 10% of our pipeline, and our luxury and lifestyle portfolio is now 13% of our system size and 20% of our pipeline as we increase our exposure to higher fee income segments.”
IHG signed 467 new hotels in 2022 and opened 269, which led to net system growth of more than 4%.
“The further 1,800 hotels in our pipeline represents future growth of over 30% of today’s system size,” Barr added.
“The Holiday Inn brand family, with its global leadership position, delivered around a third of our hotel signings and half of openings.”
- Commenting on IHG’s full-year results, Julie Palmer, partner at corporate restructuring firm Begbies Traynor, said: “The travel industry’s bounce back continues with InterContinental Hotels performing better than pre-pandemic levels when there were no Covid restrictions.
“By the end of the year, the key measure for hotels, revenue per available room, was above 2019 levels in key markets, and InterContinental is hoping to benefit from the long-awaited reopening of China.
“There’s confidence despite an uncertain global economic outlook this morning. InterContinental says travel is low down the list of things cash-strapped consumers cut, and business travel is steadily returning, with hybrid working arrangements delivering a further boost.
“With almost a million rooms across 6,000 hotels either directly owned or franchised under InterContinental’s various brands, and plans to add a further 1,800 properties, management are betting big on this recovery continuing.
“But they are confident enough in the future to increase the dividend and launch a $750 million share buyback. As long an travellers remain confident to check in, then InterContinental’s strategy checks out.”