The new boss of InterContinental Hotels Group has hailed “very healthy” travel demand after reporting a strong first half of the year.
Elie Maalouf was speaking as the Holiday Inn parent delivered a 62% rise in operating profits to $584 million in the six months to June 30 over the same period last year.
The average daily rate was up by 11% over pre-pandemic 2019, with the key metric of revenue per available room (revpar) exceeding pre-Covid levels.
IHG revealed that its new mobile app saw the number of downloads, users, bookings and revenue all increase by 40%-50% on 2022 levels in the half year.
Digital direct channels have grown to contribute around a quarter of hotel revenue globally, and mobile channels now account for more than half of all digital bookings.
“Our digital-first approach drives a higher percentage of direct bookings to our hotels, helps meet evolving guest expectations, creates cost efficiencies and delivers data and insights to optimise revenue management decisions,” IHG said.
Meanwhile, plans to introduce a new midscale brand to attract more hotels to convert to the company has led to more than 100 showing interest.
“Building on the successful development of several new brands in recent years, our new midscale conversion brand is aiming to be the leading choice for guests wanting great value stays at high-quality properties, and for owners seeking higher returns in the segment,” IHG said.
“IHG already has the global leading position in the upper midscale segment, and in the US alone we have 545 Holiday Inn and 2,283 Holiday Inn Express properties.
“At price points beneath this, the midscale segment is a large target market which IHG only currently addresses through our new-build avid hotels brand and our Candlewood Suites extended stay brand.”
Maalouf, who previously led IHG’s business in the Americas and succeeded former chief executive Keith Barr on June 30, said: “Our teams have delivered strong results in the first half, with financial performance, hotel openings and signings all significantly above prior year comparisons.
“Travel demand is very healthy, with revpar improving year-on-year across all our markets and exceeding 2019 pre-pandemic peaks for four consecutive quarters.
“In the Americas and EMEAA regions, leisure demand has remained buoyant and business and group travel continued to strengthen, while in Greater China, demand has rebounded rapidly.”
IHG opened 21,000 rooms across 108 hotels in six months and signed more than 34,000 rooms across 239 hotels, up 11% year-on-year. More than a quarter of all signings were across the group’s six luxury and lifestyle brands, as it accelerates growth in the higher fee income segment.
Maalouf added: “As we continue to grow our brand portfolio, we’re excited to announce we will soon launch a new brand targeted at midscale conversion opportunities.
“We’re proud of our industry-leading position in upper midscale with Holiday Inn and Holiday Inn Express.
“Our aim is that this new conversion brand will become the first choice for guests and owners in the midscale segment, accelerating our growth in a space that is already worth $14 billion in the US market alone.
“Conversions represent a major growth opportunity for us, generating around 40% of first half openings and signings globally, and we see an increasing desire from owners to quickly realise the benefits of IHG’s scale and strong enterprise. We’re delighted that more than 100 hotels have already expressed definitive interest in the new brand.”
Commenting on the results, Philip Baker, head of the hotels group at law firm Gowling WLG, said: “Despite ongoing financial uncertainty, the travel sector continues to benefit from the increased consumer demand around premium travel, especially.
“Indeed, the group continues to demonstrate its ability to continue generating cash flow in uncertain times on the back of continuous investment in Europe, the Middle East and Asia. Subsequently, its growth ambitions look increasingly positive as more consumers are capitalising on being able to travel freely again.
“The efforts of competitors to recover from a difficult period and similarly thrive will doubtlessly be in focus, particularly with the cost-of-living crisis and inflationary pressures impacting consumer spending.
“Shareholders will want to see this success sustained and the rise in revenue converted into profit after the downturn during the pandemic as the hospitality sector rebounds.”