IHG Hotels & Resorts executives said average daily rate across the firm's global hotel portfolio increased by 27% in the first quarter compared with 2021 and was in line with pre-pandemic 2019 numbers.
Speaking on a call with analysts, Paul Edgecliffe-Johnson, chief financial officer and head of group strategy, said performance has been boosted by revenue at IHG's hotels in the U.S.
Revenue per available room increased by 61% over the first quarter of 2021 and came to within 18% of pre-pandemic 2019 levels.
Performance in the quarter got a major boost from strong U.S. spring break activity, he said.
He said Miami and San Diego were two of the U.S. top 25 markets that outpaced 2019 RevPAR levels and that brands such as Holiday Inn Express surpassed 2019 RevPAR performance.
“The business we’re seeing on the books indicate all three metrics will soon outpace 2019 levels,” he added.
In a statement accompanying the call, CEO Keith Barr underlined the growth in leisure travel demand, but he said other segments were returning, too.
“The high level of demand we have seen for leisure travel continues to drive increased rates and occupancy. We also continue to see a return of business and group travel, further supporting RevPAR improvements in many of our key urban markets,” he said.
At IHG's hotels in the Europe, Middle East and Africa region, RevPAR is 33% below 2019 levels but increased 122% compared to the first quarter of 2021.
Edgecliffe-Johnson said the company added approximately 16,500 rooms to its pipeline during the quarter, an improvement of 15% year over year and in line with 2019 numbers, and it opened approximately 6,600 rooms across 45 hotels.
“RevPAR continues to improve, and we are showing strong pricing power. … We remain confident of our full recovery,” he said.
“We are seeing sustainable, industry-leading growth,” he added.
US Charging Forward
The U.S. also represents the highest percentage of new IHG hotel signings, Edgecliffe-Johnson said.
“Our pipeline of 278,000 rooms increased 2.4%. Of the 120 hotels signed, there was a particularly strong performance in the Americas with a near-doubling of signings from 39 to 73" year over year, Barr said in his statement.
In total, the firm now has approximately 885,000 rooms opened or in its pipeline.
Edgecliffe-Johnson added the recent lifting of travel restrictions in key markets in Europe will lead to continued improvements in performance, and the return of international flights to Australia already has started to show uplift there.
RevPAR across IHG's China portfolio declined 42% in the quarter compared to 2019. Edgecliffe-Johnson said the effect of a lockdown in Shanghai will likely show up in second quarter results.
The firm also announced in April it had entered a new, five-year, $1.35-billion syndicated bank revolving-credit facility, with its previous $1.28-billion facility and $75-million bilateral facility having been annulled.
“Pricing on that has been reset to pre-pandemic levels,” Edgecliffe-Johnson said.
Two one-year extension options are at lenders’ discretion, he added.
Edgecliffe-Johnson repeated previous statements on the Russian invasion of Ukraine, stating “any profits will be donated to charities.”
“We are in discussions with owners [in Russia]. It is a complicated process and will take time.”
As of press time, IHG stock was trading at 49.53 pounds sterling ($61.72) a share, a decline of 1.8% year over year. The London Stock Exchange’s FTSE 100 index was up 4.36% over the same period.