The post-Covid rebound in travel demand has seen Holiday Inn owner IHG (GB: IHG) achieve rising half-year profits – as demand for hotel rooms approaches pre-pandemic levels.
Intercontinental Hotels Group said it was reintroducing an interim dividend at a level 10% higher than the last installment in 2019, and also introduced a £414m share buyback.
Pre-tax profits jumped to US$299m (£248m) in the six months to June 30, from $67m (£55m) the previous year.
Back to pre-pandemic levels
In the UK market in particular, some key hotel chain performance metrics were approaching pre-pandemic levels, with revenue per available room (RevPAR) down 2% in the second quarter, down 2% from compared to 2019.
Keith Barr, Managing Director of IHG Hotels & Resorts, said, “We saw continued strong growth in the first half of 2022 with increased travel demand in most of our markets.”
“This brought the group’s RevPAR very close to pre-pandemic levels in the second quarter.
Returns from business trips
Barr said business and group travel also returned in the first half of 2022, further boosting results.
“Along with leisure stays, the return of business and group travel demand continued to strengthen during the period, and our hotels benefit from increased pricing power thanks to the strength of the brands, the loyalty program and IHG’s technology platform. »
The company said its one-stop shopping scheme enables hotel owners in the UK to save up to 15% on food and drink.
According to TipRanks analyst rating consensus, IHG stock has a moderate buy rating, based on five buy ratings and four hold ratings.
The average price target is 5467.50p, which is 8.74% higher than the current price level. The stock has a high forecast of 5900p and a low forecast of 4900p.
In a tough market, IHG continues to perform well and is using its size to save money for hoteliers. But will the post-pandemic rebound last?