Third-quarter systemwide room revenue generated by business transient travel at IHG Hotels & Resorts increased 4 percent year on year, while revenue from group travel fell by 4 percent, according to an earnings report released Thursday. Leisure travel demand for the quarter also fell 2 percent compared to the previous year.
The company's average daily rate for the quarter fall by 0.4 percent to $128.66 compared to the same time last year, while revenue per available room increased 0.1 percent year on year.
"We are pleased with our performance… and we remain on track to meet full year consensus profit and earnings expectations," said IHG CEO Elie Maalouf in a statement, adding that after a "pause" in corporate and leisure demand in the first few quarters, the company remains optimistic moving into 2026. "We see short-term softness, but we believe in long-term strength," he said during an earnings call.
Maalouf also underlined the resilience of the business travel segment, where demand in Q3 was up across all regions—with a 6 percent year-on-year increase in Europe, the Middle East, Asia and Africa (EMEAA), a 2 percent increase in the U.S. and a 5 percent uptick in Greater China.
"Business travel continues. Why? Because business expands, GDP expands, companies expand and employment expands and people have to go to do stuff, that’s why," Maalouf said. "Our events calendar is also very strong. People go to do stuff in business, so the idea that business travel will never recover [post-Covid] obviously has been dispelled," he added.
RevPAR for the EMEAA region in Q3 increased 2.9 percent to $107.62, while ADR increased 0.7 percent to $143.03 and occupancy increased 1.6 percentage points to 75.2 percent. In Europe, slower RevPAR growth in France and Germany was offset by stronger increases in the UK and Southern Europe, the latter driven by leisure demand.
Between July and September, IHG opened 33 hotels totaling 4,200 rooms in the region, marking a 25 percent increase on the same period last year.
Across the Americas, RevPAR for the quarter fell by 0.9 percent to $101.18, while ADR also declined by 0.5 percent to $140.88. Occupancy rates fell 0.3 percentage points to 71.8 percent. The company also noted that US Government travel has declined by 20 percent compared to 2024.
Meanwhile, in Greater China, RevPAR declined 1.8 percent to $43.57, while ADR also fell by 2.7 percent to $67.65, largely due to an increase in international outbound leisure trips. Occupancy rates in the region increased 0.6 percentage points to 64.4 percent.
New Collection Brand
IHG on Thursday also announced plans to launch a new 'premium' collection brand "in the coming months". Maalouf shirked investor questions for details regarding the name and rollout of the brand, stating only that it will initially focus on the EMEAA region and that it will be positioned in the upscale to upper upscale segment.
IHG opened 99 hotels totaling 14,500 rooms in Q3 and signed an additional 170 properties to its portfolio, marking year-on-year increases of 17 percent and 18 percent, respectively. As of 30 September, the group’s global portfolio comprised of 6,845 hotels, with an additional 2,316 hotels in the pipeline, which includes the expansion of the Ruby brand into the U.S., Maalouf said.