Holiday Inn owner IHG sweetens shareholder return on travel rebound


A general view of an Intercontinental hotel in London, Britain October 20, 2020. REUTERS/Matthew Childs/File Photo

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  • IHG shares down more than 1%
  • announces $500 million share buyback
  • Q2 RevPAR for the Americas exceeds pre-pandemic levels

Aug 9 (Reuters) – IHG (IHG.L) on Tuesday announced a $500 million share buyback after half-year profit more than doubled, boosted by rising room prices, strong travel demand from pleasure and a resumption of business trips, particularly in the United States.

Hoteliers are benefiting as people spend more on travel and book longer hotel stays, driving up occupancy rates and prices, though they face the risks of stubborn inflation and cost issues. of life around the world.

IHG shares, however, fell 1.2% to 4,953 pence as analysts worried about the number of hotel rooms added in the first half and said the group’s performance paled in comparison. to its American peers Marriott (MAR.O) and Hilton (HLT.N). Read more

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“Hilton and Marriott both beat double digits in the second quarter and had total EBITDA prior to 2019, so this (IHG’s results) should be considered mildly disappointing, particularly in the absence of guidance for the fiscal year to reassure,” analysts at Bernstein said in a note. EBITDA is earnings before interest, taxes, depreciation and amortization.

IHG, owner of Crowne Plaza, Regent and Hualuxe, said profitability in the Americas, its biggest market, had surpassed pre-pandemic levels, driven mainly by domestic demand for leisure.

Second quarter revenue per available room (RevPAR) – a key measure of profitability – for the Americas was 3.5% higher than 2019.

Net growth in IHG’s room count was 3% in the first half, partly penalized by the group’s exit from Russia. Analysts on average expect net system size growth of 4% for the full year.

“As the economic outlook faces uncertainty as central banks and governments take steps to manage inflation, we remain confident in our business model,” IHG chief executive Keith Barr said in a statement. a statement.

Operating profit for the six-month period ended June 30 reached $361 million, compared to $138 million last year.

The group, which has already resumed payment of the balance of the dividend, restored its interim dividend to 43.9 cents, a level 10% higher than when it last paid out in 2019.

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Reporting by Muhammed Husain and Yadarisa Shabong in Bengaluru; Editing by Kirsten Donovan and Bradley Perrett

Our standards: The Thomson Reuters Trust Principles.

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