Intercontinental Hotel Group revenues bounce on price hikes

Intercontinental Hotel Group shares were under pressure on Friday as the looming exit of its finance boss overshadowed solid revenue growth.

The Holiday Inn owner, which is listed on the FTSE 100, reported a 28 per cent rise in revenue per available room compared to last year during the third quarter. 

The group also posted a 13 per cent rise in its average daily rate compared to 2021 after lifting prices. 

IHG announced Paul Edgecliffe-Johnson, chief financial officer and group head of strategy is stepping down from the board and the company in six months’ time. 

The group has started the process of appointing his replacement.

IHG’s shares fell 4.25 per cent in morning trading.    

Regionally the Group saw revenue per room increase 6.8 per cent in the Americas and 20 per cent in Greater China, driven by a lifting of Covid-19 restrictions in the country.

Leisure rates went up 15 per cent over the quarter and demand has remained strong, buoyed by high global employment rates.

Chief executive Keith Barr said: ‘The industry is experiencing lower levels of new hotel opening activity, and with a particular impact from the restrictions in China. Despite this, in this latest quarter, we opened 51 hotels and signed 89 more into our pipeline.

‘In the year to date our newer brands grew to be 12 per cent of signings, while conversions increased to be over 30 per cent of openings.

‘We are also achieving the expected lowering of the removal rate to around 1.5per cent, with this driven by the success of the review activity undertaken last year that further improved the quality and consistency of our estate.’

The company also revealed that part of its technology systems had been subject to unauthorised access, causing disruptions to the company’s bookings. 

However, an investigation into the incident found that no guest data was accessed during the system breach.

It also confirmed it has completed 59 per cent of its share buyback programme which launched on 9 August this year and will end on 31 January 2023. To date the company has purchased 5,648,895 shares at an average price of £46.12 per share.