InterContinental Hotels Group to launch new upscale hotel brand after posting strong revenue growth
Intercontinental Hotels Group (IHG) is continuing to enjoy strong revenue growth, with revenue per available room (RevPAR) - the industry’s preferred performance metric - increasing 2.7% across the company.
The better-than-expected result comes despite a year of disruption in the hospitality sector, with terrorist attacks in Europe and instability in the Middle East affecting the travel market.
IHG reported that revenues had grown to $1.8bn in 2017, up 4% from the previous year. Meanwhile, pre-tax profits rose 14.7% to $678mn.
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The FTSE 100 company which owns hotel brands such as Crowne Plaza, Holiday Inn and InterContinental hotels, also revealed that it is to launch a new “upscale conversion brand” in 2018, with the aim of generating a return of around US$125mn in annual savings by 2020.
IHG’s chief executive, Keith Bar, said that the company would build on the success of the Avid hotel brand it launched last September by launching “a new upscale conversion brand” which will leverage the power of its brand to capture a larger market share of this premium market.
“We will also build out our development resource and capability in the sizeable global luxury segment, where we are looking to acquire small luxury brand(s) to incubate and grow,” he added.
IHG saw significant growth in the European market, with RevPAR growing 6.3%. This came as more tourists returned to countries such as France, Turkey and Belgium after previously avoiding travel due to concerns about terrorist attacks.
China is also a promising region for IGG with RevPAR growing 6% as leisure spending in the country rises.
Barr said that HG aimed to accelerate the company’s growth rate by “redeploying and refocusing resources to leverage our scale; strengthening our loyalty programme; continuing to prioritise digital and technological innovation; enhancing our industry-leading franchise proposition; strengthening our existing brands; and adding new brands where we see the greatest potential for growth.”
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