- Global RevPar up 2.6%
- More than 6,200 rooms opened in Q1
- 2024 share buyback 30% complete
Shares in Intercontinental Hotels (IHG) fell over 3% to £76.36 on Friday after the global hotels operator reported low single-digit growth in global RevPar (revenue per available room) for the first quarter of 2024.
This performance was below expectations and dragged on shares in IHG, which have rallied 37% over the past year.
Overall, first quarter global RevPar was up 2.6% year-on-year, with a weak performance from the Americas, down 0.3%.
However, RevPar was up 2.5% in Greater China and 8.9% ahead in EMEAA (Europe, Middle East, and Africa).
The hotels giant, which also manages Crowne Plaza, Holiday Inn and Holiday Inn Express, said it has completed $239 million of 2024’s $800 million share buyback programme, reducing its share count by 1.4%.
HOTEL EXPANSION
CEO Elie Maalouf said that IHG opened more than 6,200 rooms across 46 hotels in the first quarter and signed nearly 18,000 rooms across 129 properties to increase its pipeline by 6.6% year-on-year.
Compared to the same quarter last year, room openings rose 11% for Iberostar and signings grew by 7%.
In April this year, the company announced an agreement with NOVUM Hospitality that will double IHG’s presence in Germany.
‘The deal adds up to 119 hotels (17,700 rooms) or up 1.9% to our global system over the coming years,’ the company said.
Despite this positive news, analysts at Jefferies viewed the hotel giant’s first quarter results ‘as a small miss’ versus their estimates and consensus.
‘While weakness in the Americas was well known, the miss came from EMEAA and Greater China.’
However, Jefferies added: ‘IHG remains a long-term compounder with a growth algorithm that rivals Marriott’s (MAR:NASDAQ).’
