InterContinental boosted by European renaissance
The Holiday Inn-owner said revenue per available room grew 2.3% in the three months to September.
Holiday Inn-owner InterContinental Hotels Group (IHG) has reported rising third quarter revenues as tourists returned to Europe following last year’s terror attacks and as hurricanes battered North America.
The FTSE 100 firm said revenue per available room, which is the sector’s preferred measure of performance, grew 2.3% in the three months to September.
In Europe, the figure grew 7.1% and contrasted sharply with just a 0.8% increase in the Americas with IHG saying that hurricanes Harvey and Irma had a “mixed impact”.
“Displacement activity together with the relief and reconstruction efforts benefited our franchise business; but performance across the managed estate was negatively impacted by the cancellation of group bookings at some hotels,” the group said.
In contrast, European markets such as France and Belgium, which had been battered by a series of terror attacks last year “grew strongly”.
“Markets previously impacted by terrorist attacks grew strongly, including revenue per available room growth of 6% in France, and double digit growth in Belgium and Turkey.
“Performance across several markets in Southern Europe was also strong due to increased demand over the summer months,” IHG added.
In the UK, revenue per available room rose 4% as the collapse in the value of the pound since the Brexit vote continues to help inbound tourism.
IHG said that its brands outperformed in both London, which saw growth of 3%, and the “provinces”, which notched up an increase of 5%.
Neil Wilson, senior market analyst at ETX Capital, said: “There has been one very clear economic boost since Brexit – tourism in the UK is booming thanks to the weak pound and this has helped hotels.”
The firm also said that it opened 11,000 new rooms in the period, an increase of 4.1% and its fastest rate since 2010.
IHG said that it signed hotels into its pipeline at the fastest third quarterly rate since 2008.
Boss Keith Barr said the firm has “made an excellent start with our plans to accelerate the growth of our brands around the world”.
“Looking ahead, despite macro-economic and geopolitical uncertainties around the world, we remain confident in the outlook for the remainder of the year,” he added.