IHG: 2024 Demand Up But Corp. Nights Slip
Fourth-quarter IHG Hotels & Resorts systemwide RevPAR increased year over year but full-year business travel room nights declined slightly from 2023. Meanwhile, the company acquired upscale European 'urban micro' lifestyle brand Ruby.
FrankLin
The chain also acquires European 'urban micro' brand Ruby.
Fourth-quarter IHG Hotels & Resorts systemwide revenue per available room increased 4.6 percent year over year on broad-based growth, the company announced Tuesday, but full-year business travel room nights declined slightly from 2023. Meanwhile, IHG announced the acquisition of upscale European "urban micro" lifestyle brand Ruby for about $116 million (€110.5 million).
There currently are 20 Ruby properties across Europe, including nine in Germany, and 10 more in the development pipeline.
"We see excellent opportunities to not only expand Ruby's strong European base but also rapidly take this exciting brand to the Americas and across Asia, as we have successfully done with previous brand acquisitions," IHG CEO Elie Maalouf said in a statement.
In what Maalouf on a Tuesday earnings call said was a "strong finish" to 2024, the company's fourth-quarter systemwide RevPAR increased to $86.31.
For full-year 2024, systemwide RevPAR increased year over year 3 percent to $88.10 while average daily rate increased 2.1 percent to $129.68—all figures in constant currency—and occupancy increased 0.6 percentage points to 67.9 percent.
IHG in a presentation to investors broke down 2024 performance by segment, and showed that room nights generated by business travel declined 1 percent year over year both systemwide and in its Americas region. (They rose 2 percent in IHG's Europe, Middle East, Africa and Asia outside of China. They declined 4 percent in China.)
However, 2024 business travel ADR increased 3 percent year over year both systemwide and in the Americas, so the segment's room revenue increased 2 percent in both areas. "Business demand continued to perform well with global rooms revenue up 2 percent," IHG CFO Michael Glover said on the call.
IHG Q4, Full-Year Metrics
IHG Q4 systemwide ADR increased 2.5 percent to $129.73 while occupancy increased 1.3 percentage points to 66.5 percent.
Full-year 2024 U.S. RevPAR increased 2 percent year over year, Maalouf said on the call. He added that he thought the company in 2025 could exceed hotel analytics firm STR's current projection for industrywide U.S. year-over-year RevPAR growth of 1.8 percent.
"I think that you look at the projections from STR and others, they’re in the high 1s for this year, for 2025. Frankly, we think 2025 can be as good in the U.S. or better," Maalouf said. He noted solid employment statistics, consumer confidence, financial market strength and limited U.S. hotel supply growth. "The fundamentals for another good year of RevPAR growth in the U.S. are there," he said.
IHG's full-year 2024 revenue from reportable segments increased 7 percent year over year to $2.31 billion, while operating profit increased to $1.12 billion from $1.07 billion one year prior.
IHG at the end of 2024 had about 987,000 rooms in its system, up about 4.3 percent year over year. Its pipeline increased about 10 percent to about 325,000 rooms.
