IHG reports revenue rise in Q1

Hospitality giant lifts revenue metric, earmarks loyalty fund changes.

InterContinental Hotels Group (LSE: IHG) has reported a 2.6% year-over-year increase in revenue per available room (RevPAR) for Q1 2024, driven by an 8.9% surge in the Europe, Middle East, Asia & Africa (EMEAA) region.

While the Americas saw a marginal 0.3% RevPAR dip due to “adverse calendar timing,” Greater China rose 2.5%. Globally, occupancy inched up 0.2 percentage points to 62% as IHG opened 46 hotels with around 6,300 rooms.

Chief Executive Elie Maalouf lauded EMEAA’s “impressive” performance, anticipating China to benefit from rebounding international travel this year. Average daily rates increased 2%, reflecting “the complete return of leisure, business, and group travel.”

Notably, IHG is adjusting its system fund contributed to by hotel owners. It is lowering the standard loyalty assessment fee while offering additional marketing and loyalty program benefits.

Previously, all IHG One Rewards loyalty point sale revenue went into the system fund. Going forward, IHG will recognize a portion within its results – 50% in 2024, estimated at $25 million incremental revenue and operating profit, increasing to 100% in 2025.

IHG shares fell 1.2% on Friday but have gained 38% over the past 12 months.

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