Improving business travel volumes and higher rates helped global hotel company InterContinental Hotels Group (IHG) to double net profit in 2023 to $750 million.
The UK-based firm, which owns brands such as InterContinental Hotels, Holiday Inn, Crowne Plaza and Kimpton, said that revpar (revenue per available room) rose by 16.1 per cent last year compared with 2022 and was also up by nearly 11 per cent on 2019’s figure.
IHG’s average daily rate (ADR) rose by 5 per cent compared with 2022 and was 13 per cent higher than in 2019. Occupancy also improved by 6 percentage points in 2023 compared with the previous year and was just 1 point lower than in 2019.
This improved trading helped IHG to increase total revenue by 19 per cent year-on-year to reach $4.6 billion in 2023 – up from $3.9 billion in 2022.
Elie Maalouf, CEO of IHG Hotels & Resorts, said the company had delivered “an excellent set of results” in 2023, with travel demand “strong across all markets”.
IHG revealed that revenue from business travel was up by 3 per cent in 2023 compared with 2019, with rates 5 per cent higher but the number of total room nights remained 2 per cent lower than in the pre-Covid year.
Revenue from group bookings was still 5 per cent lower than in 2019 but “turned positive” in the final quarter of 2023, added IHG in its financial statement.
“Alongside strong trading and financial performances, we continued to grow our portfolio and the global footprint of our brands. We opened 275 hotels in 2023 and signed more than double that amount – 556 hotels – into our pipeline,” added Maalouf.
“The travel industry has attractive, long-term drivers of demand, and the strength of our brand portfolio and enterprise platform will continue to boost our revpar and system size growth.”
IHG said short-term growth was expected to be boosted by a “number of tailwinds”, including “further recovery in occupancy levels for business travel and for groups, meetings and events”.
“Business surveys indicate expectations for increasing corporate travel budgets and a continued return to pre-pandemic levels of travel activity, as well as the potential for greater hotel use to support hybrid and flexible working arrangements,” added the company.
The results also revealed that revpar in the UK was up by 14 per cent in 2023 compared with the previous year, and increased by 17 per cent compared with 2019. Revpar in continental Europe was 8 per cent higher in 2023 compared with 2022, and 19 per cent higher than in 2019.