IHG the bigger bull in the room

BERKSHIRE, England – IHG Hotels & Resorts CEO Elie Maalouf made the most optimistic statement of 1Q25 earnings season on Thusday, stating, “while still early, we remain on track to meet full year consensus profit expectations.”

Maalouf added, “Looking ahead, while noting that some forward economic indicators have softened, our comparable on-the-books global revenue for Q2 continues to show growth on the same position a year ago. Our ability to capture demand across geographies and chain scales, as well as being heavily weighted to domestic stay occasions, are resilient strengths of our business.”

Global RevPAR for the U.K.-based company was +3.3% for 1Q25 (+3.5% Americas and U.S.; +5.0% EMEAA; and -3.5% Greater China), driven by growth across business, leisure and group, while openings and signings were ahead of last year. Global rooms revenue on a comparable basis saw business +3%, leisure +2% and group +5%.

Average daily rate for the quarter was +2.2% and occupancy +0.6% points.

System size growth accelerated to +7.1% YOY, +1.5% YTD. IHG opened 14,600 rooms (86 hotels) in Q1, more than double the same period last year. Net system size growth was +4.3% YOY, 0.0% YTD (or +5.0% YOY and +0.7% YTD excluding the impact of removing rooms previously affiliated with The Venetian Resort Las Vegas). The global system grew to 987,000 rooms (6,668 hotels).

IHG signed 25,800 rooms (158 hotels) in Q1, or 20,000 excluding the Ruby brand acquisition, compared to 17,700 in the same quarter last year. Its global pipeline of 334,000 rooms (2,265 hotels) equals +9.4% YOY growth.

Since acquiring the Ruby brand, a further two signings have been added. Maalouf added that demand for quick-to-market conversions to IHG’s brands and enterprise platform continues to be high, representing around 60% of openings and 40% of organic signings in the quarter.

Regional performance

Occupancy in the Americas was up +0.7% points to 63.4% for the quarter, and rate was up +2.4%. Last year’s trends by demand driver continued, with Q1 rooms revenue on a comparable basis strongest for groups at +6%, business was up +4% and leisure was +2% on 2024 levels.

Similar to other companies reporting, the first two months of the quarter for IHG were strongest, whereas the rolling eight weeks to Saturday May 3 in aggregate, which also normalizes for the shift in timing of Easter between March and April, has seen RevPAR broadly flat.

The current position of revenue on-the-books for comparable hotels for the balance of Q2 is also currently broadly flat.

Gross system growth in the Americas was +3.4% YOY and +0.8% YTD, with 4,000 rooms (31 hotels) opened in the quarter, which was +30% more than last year. Net system size change was -0.1% YOY and -1.6% YTD. Excluding the impact of removing 7.1k rooms that were previously affiliated to IHG’s system with The Venetian Resort Las Vegas, net system size growth was +1.3% YOY and broadly flat YTD.

There were 4,500 rooms (42 hotels) added to the Americas pipeline in the quarter, including 12 hotels signed across the Holiday Inn brand family, and 18 across IHG’s extended-stay brands. Midscale conversion brand Garner now has 59 open and pipeline hotels in the region.

In EMEAA, IHG RevPAR was up +5.0%, compared with growth of +6.6% achieved for FY 2024. Occupancy for the quarter was up +0.6% points to 66.7%, and rate up +4.0%. By major geographic markets within the region, RevPAR ranged from broadly flat in the U.K., to up +5.6% in Continental Europe, +6.2% in the Middle East and +6.8% in East Asia and Pacific. The latter continued to benefit from increased levels of inbound leisure travel from Greater China, which contributed to strong double-digit growth in numerous countries, on top of very strong increases last year.

Gross system growth in EMEAA was +11.6% YOY and +2.3% YTD, with 6,200 rooms (30 hotels) opened in the quarter, which was almost six-fold last year. Openings included 1,500 rooms from a further 13 conversions as part of the initial April 2024 NOVUM Hospitality agreement, taking the total converted to date to 11,700 rooms and 71 hotels.

Conversions represented the majority of room openings and 45% of organic room signings in the quarter. Signings included three further Garner properties as it develops across the region, and eight signings across the voco and Vignette Collection brands as their rollouts continue.

Looking forward in Greater China, IHG said there is an easing in the strong comparatives from the prior resurgent return of post-COVID travel demand and they are encouraged by longer-term demand drivers.

Gross system growth in Greater China was +11.6% YOY and +2.3% YTD, with 4,400 rooms (25 hotels) opened in the quarter, which was more than double the same quarter last year and included the milestone of exceeding 800 open hotels in the region. Net system size growth was +9.1% YOY and +1.8% YTD. There were 8,500 rooms (44 hotels) added to the pipeline.