THE INTERCONTINENTAL HOTELS Group (IHG) says it is seeing encouraging signs of recovery in business and international travel. Corporate bookings in the U.S. are strong as IHG’s room revenue inches closer to pre-pandemic levels.
The owner of the Holliday Inn, Crowne Plaza and Regent brands said in an article on Reuters that its hotel RevPAR rose 66 percent in the third quarter, with the U.S. down just 7 percent from 2019 levels after a busy summer season.
“Domestic leisure demand was particularly strong in a number of markets over the summer, where occupancy and rates climbed back to 2019 levels,” said Keith Barr, CEO of IHG.
IHG said it was encouraged by signs of an uplift in business travel, group bookings and international trips during September.
In early October, IHG announced two new Voco Hotels in the U.S. – the Voco St James Hotel New Orleans in Louisiana and the Voco Olympia Hotel at Capitol Lake in Washington.
Revenue in IHG’s Americas region, which account for the bulk of the group’s revenue, rose 76 percent in the quarter and was down 10 percent compared to 2019.
“IHG’s key Crowne Plaza and Holiday Inn brands in particular weak relative to their segments,” said James Ainley, a Citi analyst.
IHG has been reviewing around 200 Holiday Inn and Crowne Plaza hotels to save cost and position itself for growth post COVID-19. It has exited or confirmed the exit of 90 hotels already, the company said.
The global brand is targeting an additional $25 million in cost savings this year.
A study by the American Hotel & Lodging Association and Kalibri Labs in September revealed that U.S. hotels would incur more than $59 billion loss in business travel revenue this year compared to 2019.
According to the report, the revenue from the segment is unlikely to reach pre-pandemic levels until 2024.