IHG remains on forecast after mixed quarter

LONDON – Strength in EMEAA offset softness in the U.S. during the third quarter, netting InterContinental Hotels Group (IHG) a 0.1% global increase in RevPAR. Q3 occupancy was up 0.4% points and average daily rate was off 0.4%.

IHG added that it expects to finish 2025 in line with consensus profit and earnings expectations, and in line with its growth algorithm.

IHG Hotels & Resorts CEO Elie Maalouf said the U.S. continued to experience softer trading conditions with RevPAR down 1.6% in the quarter, compared with a 1.2% increase a year ago. Overall, Q3 RevPAR was off 0.9% in the Americas, while EMEAA was up 2.8% and Greater China was off 1.8%.

“Long-term structural drivers of both travel demand and supply remain compelling, and while near-term macro-economic challenges persist in some markets, others are showing improvement or sustained growth,” Maalouf said in the earnings release. “We remain confident in a strong outcome for the year and further delivery beyond.”

Year-to-date, IHG global RevPAR is up 1.4%, with Americas +0.8%, EMEAA +3.8% and Greater China -2.6%.

Q3 global rooms revenue on a comparable basis comprised business +4%, offset by leisure -2% and groups -4%.

IHG also announced plans to launch a collection brand in the coming months, positioned in upscale to upper upscale segment. The new brand will initially focus on our EMEAA region where IHG said there is a significant proportion of high-quality hotels with their own unique identity.

IHG said the new brand will complement premium conversion brand, voco, which has reached 225 open and pipeline hotels across more than 30 countries since its launch in 2018. It will also look to replicate the success of Vignette Collection, launched in 2021, which is positioned higher in the Luxury & Lifestyle category and tracking ahead of its goal to reach 100 hotels in a decade, currently with 27 open and a further 41 pipeline properties.

Development activity

IHG also reported strong development activity with openings up 17% and signings up 18% with 22,600 rooms (170 hotels) in Q3. The global pipeline of 342,000 rooms (2,316 hotels) is up 4.7% year-over-year.

Gross system growth was up 7.2% year-over-year and net system growth was up 5.2%, adjusting for the impact of removing rooms previously affiliated with The Venetian Resort Las Vegas (net growth +4.4% year-over-year on a reported basis).

IHG opened 14,500 rooms (99 hotels) in Q3, excluding NOVUM conversions added to IHG’s system, giving the company 1,011,000 rooms (6,845 hotels).

Signings in the Americas hit 7,600 rooms (79 hotels) in the third quarter, an increase of +14% over last year. These included 33 hotels signed across the Holiday Inn brand family, 16 across extended-stay brands and eight voco conversions. Midscale conversion brand Garner added another nine signings in Q3, with the brand now having 25 open and 49 pipeline hotels in the region. Conversions represented over half of all rooms opened and signed in the quarter.

Finally, IHG has completed $700 million of its $900 million share buyback program, reducing the share count by 3.9%. IHG said it is on track to return over $1.1 billion to shareholders in 2025 through share repurchases and dividend payments.

IHG also announced its intention to change the currency in which its Ordinary Shares are traded on the London Stock Exchange from British pounds to U.S. dollars. IHG has reported its financial results in U.S. dollars for the past 17 years. It said changing its share price currency to match its reporting currency will help reduce the translational impact of exchange rate fluctuations on the share price, therefore better aligning the share price to financial performance, and simplifying the investment appraisal of IHG. The change does not impact the nominal currency of IHG’s shares, which will remain in British pounds.