InterContinental Hotels Group (IHG) expects the “further return” of business and travel groups to boost its sales in 2023 despite ongoing “economic uncertainties” around the world.
The global hotel company, which owns brands such as Holiday Inn, Crowne Plaza and InterContinental, said that it had seen “strong demand return in most of our markets” during 2022. IHG expects “further recovery in international, corporate and group travel” to be one of its major tailwinds in 2023.
“Trading continued to be driven by strong leisure demand, which was supported by improvements in both corporate and group bookings in the second half of the year,” added IHG in its 2022 results announcement.
IHG’s results for last year showed that the “strongest recovery” had been in the Americas region where revenue per available room (revpar) was 3.3 per cent higher than in 2019. This figure was even higher at 9 per cent in the final three months of 2022.
Trade in the EMEAA (Europe, Middle East, Asia and Africa) region was said to be “improving” by IHG with revpar up by 8.8 per cent in the final quarter of the year compared to Q4 in 2019. But China remained 42 per cent below pre-Covid levels due to the “scale of travel restrictions that were still in place” that were still in place last year.
The average daily rate (ADR) for IHG’s properties rose by 18 per cent in 2022 compared to 2021 and was also 8 per cent higher than achieved in 2019, despite occupancy remaining 7 per cent lower than during the pre-pandemic year.
Keith Barr, CEO of IHG, said: “In 2022 we saw demand return strongly in most of our markets, pushing group revpar back close to 2019 levels and fee margin ahead. It’s particularly pleasing that in the second half of the year we exceeded 2019 levels for both RevPAR and profitability.
“Looking to 2023, while there are economic uncertainties, we expect continued strong leisure demand in many markets, alongside further returns from business and group travel and the ongoing reopening of China.”
Last year’s recovery in demand helped IHG increase group revenue by 34 per cent year-on-year to $3.89 billion, while operating profit rose by 27 per cent to $628 million.
IHG said the EMEAA region had “recovered strongly” in 2022 as Covid-19 travel restrictions were lifted. The company increased its net number of rooms in the region by 2.4 per cent, despite the loss of 6,500 rooms after it ceased all operations in Russia following the outbreak of the war in Ukraine.