Pent- up travel need– which drove international travel healing following the Covid-19 pandemic– is over, stated Intercontinental Hotels Group CEO Elie Maalouf.
“People started traveling really by the end of 2020 as restrictions started to lift,” he stated. “So we’re really past revenge travel — even in China.”
The business’s newest quarterly upgrade revealed travel need stayed strong throughout the close of the summertime travel season.
“We think we’re in a sustainable place,” Maalouf stated. “Our bookings for groups and meetings going into 2024 and beyond are the strongest we’ve seen in a very long time.”
“We’re pleased with the demand that we’re seeing from travelers … and hope it continues,” he included.
IHG’s 3rd quarter trading upgrade, which released Friday, revealed the business’s income per offered space– or “revpar”– was up 10.5% compared to 3rd quarter 2022, and almost 13% greater compared to the 3rd quarter of 2019, which was before the pandemic.
That’s regardless of a 3% drop in revpar, compared to 2019, in big cities in Greater China, which are more based on global tourists.
Maalouf informed CNBC that do not have of “airlift,” or flight capability, into China is listed below 50% of prepandemic levels, which is impacting travel healing in cities like Beijing, Shanghai, Guangzhou and Shenzhen.
“But if you look at the country as a whole, travel — which is mostly domestic in China — it’s recovered well above 2019,” he stated, including that more than 80% of IHG’s organization in China remains in mid-sized to smaller sized cities.
Room rates and international development
Occupancy levels in the 3rd quarter at IHG hotels was 72%– simply 1% shy of pre-pandemic levels, according to the quarterly upgrade. But typical space rates have actually leapt well above 2019 levels– up almost 6% in Greater China, 15% in the Americas, and 24% in Europe, Middle East, and Africa (EMEA) and Asia.
But increasing rates are hardly staying up to date with inflation, stated Maalouf.
“Room rates have not really exceeded inflation in any of our markets,” he stated. “I think people’s willingness to travel is exhibited by the fact they’re willing to pay.”
IHG opened 50 hotels– with some 7,700 spaces– from July to September, with a net system development of 4.7% year-on-year– this consists of the business’s tactical alliance with the Spanish- owned Iberostar Hotels & & Resorts, according to the trading upgrade.
Our local head office for the Middle East remains in Dubai– and it’s remaining in Dubai.
Elie Maalouf
CEO of Intercontinental Hotels Group
The business presently runs more than 6,200 hotels around the world and has another 1,978 in the pipeline.
“We’re seeing growth really across all of our brands, across all of our businesses and across all of our regions,” he stated. But “the population of the middle class and GDP growth is shifting more east … Southeast Asia, Central Asia, China. That’s why we’re very committed to this region.”
Maalouf likewise dealt with the launch of Garner– IHG’s most recent brand name which is set to be priced lower than Holiday Inn Express– the business’s biggest brand name with 3,131 hotels worldwide sinceSept 30.
“In the United States, there are about 9,000 hotels that we think are interested in joining a system. Not that we’ll have 9,000 hotels joining us, but we think a strong proportion will.”
Maalouf stated the very first Garner hotels will likely open by year-end in the United States.
Monitoring the Middle East
The CEO challenged reports that IHG is developing a Middle East local head office in Saudi Arabia.
“Our regional headquarters for the Middle East is in Dubai — and it’s staying in Dubai,” he informed CNBC.
He stated the business just recently opened a workplace in Riyadh, showing its strategies to broaden in theKingdom IHG runs 40 hotels in Saudi Arabia– consisting of In terContinental, Crowne Plaza, Holiday Inn, Staybridge Suites and Voco hotels– with another 36 hotels in the advancement pipeline.
The Israel-Hamas war might make complex enthusiastic tourist objectives in Saudi Arabia and the United Arab Emirates, however Maalouf stated IHG hasn’t altered its long-lasting strategies in the area.
“It’s really heartbreaking, tragic, distressing to see the loss of life that’s occurring, and we hope that there’s a very quick end of the hostilities,” he stated.
“We’re monitoring the situation very closely. But we’ve also been in the region for generations, and we look forward to staying engaged.”
