8th Aug 2023 14:06
(Alliance News) - InterContinental Hotels Group PLC on Tuesday looked to the future with confidence, after reporting a robust first-half on strong demand.
The Windsor, Berkshire-based operator of InterContinental, Holiday Inn and Crowne Plaza hotel chains said in the six months to June 30, pretax profit grew by 90% to USD567 million from USD299 million a year prior, as revenue rose by 25% on-year to USD2.23 billion from USD1.79 billion.
This was driven by an improved performance following the impact of the Omicron variant at the same time a year ago, as well as stronger leisure demand in the Americas, which was supported by larger corporate and group bookings, the company said.
Additionally, IHG noted improved trading in the Europe, Middle East & Africa region, as well as in China following the lifting of travel restrictions there.
The hotel operator upped its interim dividend by 10% to 48.3 cents from 43.9 cents in the first half of 2022. IHG added that its current USD750 million share buyback is 47% complete. It is on track to return USD1.0 billion to shareholders through ordinary dividends and buybacks this year.
"IHG's perspectives on the uses of cash generated by the business are unchanged: ensuring the business is investing to optimise growth that will drive long-term shareholder value creation, funding a sustainably growing dividend, and then returning surplus capital to shareholders," the company said.
Commenting on recent trading, the company said it has seen "increased demand for travel in all our markets".
"There have been no broad signs of consumer price resistance or cooling of leisure demand to date. Some specific US resort destinations that had already experienced very strong demand-driven pricing last year have seen rates ease, with this offset by increased leisure travel to other destinations, including international trips to locations where IHG's global distribution reach has captured strong demand," it said.
IHG said comparatives get tougher in the second half of 2023, though it expects its revenue per available room to remain in growth territory in all its regions. Revenue per available room grew 24% on-year in the first half.
Chief Executive Officer Elie Maalouf said: "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 USD14 billion in the US market alone."
Shares in IHG were up 2.0% at 5,770.00 pence each in London on Tuesday afternoon.
Edison analyst Neil Shah commented: "Looking to the future, IHG can begin to forecast its finances and growth in a post-pandemic world. With a strategic focus on expanding its brand portfolio, including an anticipated launch of a new mid-scale conversion brand, IHG prospects seem promising, continuing to innovate its brand and offerings to stay competitive in the demanding hospitality market."
By Sabrina Penty, Alliance News reporter and Eric Cunha, Alliance News news editor
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