Dive Brief:
- IHG Hotels & Resorts’ Americas RevPAR declined 0.3% year on year in the first quarter of 2024, according to earnings results the company posted Friday morning.
- CEO Elie Maalouf said the market has already “recovered very strongly” from the pandemic and that “adverse calendar timing” impacted room profitability in the quarter.
- The company’s pipeline, however, is growing, up 6.6% year over year in the quarter. Signings were boosted by “quicker to market” conversion properties — something IHG is pushing in the U.S. with the rapid expansion of its Garner conversion brand.
Dive Insight:
IHG opened more than 6,200 rooms across 46 properties in Q1 and signed many more: 18,000 rooms across 129 hotels. Room openings in the quarter rose 11% year on year (when adjusted for IHG’s partnership with Iberostar), and signings were up 7%.
Maalouf credited IHG’s “quicker to market” conversions for the pipeline growth — which generated over 35% of openings and signings in the quarter — “reflecting the attractiveness of our brands and enterprise platform,” he said.
IHG is pushing a rapid expansion of its midscale conversion brand Garner, which launched in the U.S. last year and is already expanding globally. Karen Gilbride, vice president for Garner, Avid Hotels and Atwell Suites, told Hotel Dive in March that the company is “really bullish and excited about where Garner can go.”
The company’s global RevPAR grew 2.6% year over year, with rapid development in Asia, Europe and the Middle East and Africa leading growth. Maalouf highlighted IHG’s partnership with Novum Hospitality, which will double the company’s presence in Germany, also through conversions.
In tandem with earnings, IHG announced it’s lowering fees that owners are required to pay into its System Fund, which the company uses to invest in marketing, technology, its loyalty program and revenue management system.
In a statement, Maalouf said the change will “improve economics for our owners and the continued growth in ancillary fee streams will deliver value through our growth algorithm, consistent with our strategic priorities.”
In its full-year 2023 results, posted in February, IHG said conversions and luxury and lifestyle deals drove portfolio growth in the year. Some 34% of its global system as of year-end 2023 were upscale and luxury hotels, IHG said.
