IHG: Business Travel Room Nights Near Pre-Pandemic Levels

Systemwide 2023 business travel room nights at IHG Hotels & Resorts properties were within 2 percent of 2019 levels, the company announced Tuesday. Meanwhile, IHG fourth-quarter performance metrics all increased year over year.

Business travel room nights increased comparatively from 2022, when they were 12 percent below 2019 levels, according to IHG. The company's average daily rate for business travel stays in 2023 was 5 percent higher than in 2019, compared with 2022 when it was 1 percent lower. 

"Business demand continued to strengthen, both in terms of occupancy and pricing," IHG CFO Michael Glover said during a Tuesday earnings call. "We returned to regular renegotiation of corporate rates on an annual basis, which continues to drive ADR."

IHG fourth-quarter systemwide revenue per available room increased 7.5 percent year over year to $81.60, while ADR increased 2.3 percent to $125.17 and occupancy increased 3.1 percentage points to 65.2 percent. Full-year 2023 systemwide RevPAR increased 15.9 percent year over year to $85.08, while ADR increased 5 percent to $125.91 and occupancy increased 6.4 percentage points to 67.6 percent.

The company in a statement suggested further business travel growth was likely in 2024, projecting increased occupancy. Additionally, the company noted that "business surveys indicate expectations for increasing corporate travel budgets and a continued return to pre-pandemic levels of travel activity, as well as the potential for greater hotel use to support hybrid and flexible working arrangements."

IHG's full-year 2023 revenue from reportable segments increased 17.4 percent year over year to $2.16 billion, while operating profit increased to $1.07 billion from $628 million one year prior. 

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