InterContinental Hotels Group reported third-quarter performance that was relatively better than its ruinous second quarter but, like competitor Accor reported Thursday, far below levels from the pre-pandemic Q3 of 2019, according to the company's earnings release.
IHG third-quarter revenue per available room was down 53.4 percent year over year, compared with a 75 percent year over year decline in the second quarter. Q3 occupancy ticked up to 44 percent from 25 percent in the second quarter.
About 3 percent of IHG's portfolio, or 199 hotels, remained closed as of Sept. 30. IHG's Q3 net system size grew 2.9 percent year over year and now represents 890,000 rooms. The company opened 11,000 rooms across 82 hotels during the quarter, and the pipeline includes 1,899 properties totaling 286,000 rooms.
"Despite the challenges we've faced, we have continued to open new hotels and sign more into our pipeline," said IHG CEO Keith Barr in a statement. "This is in recognition of consumer preference for our brands and strong owner relationships, and also the long-term attractiveness of the markets we operate in and the relative resilience of our business model."
IHG is less reliant on properties located in major metropolitan areas, and urban properties are hurting more during the pandemic, than those in other areas. Its customer base is primarily leisure, followed by business transient, with group—the segment most affected by Covid-19 and expected by many executives to be the last to recover—comprising the smallest share.
In the Americas, third-quarter RevPAR was down 49.8 percent year over year. Occupancy grew from 28 percent in Q2 to 46 percent in Q3. In the U.S., Q3 RevPAR was down 47.3 percent year over year. Each month showed sequential improvement, though the pace of improvement slowed.
The region with the worst Q3 results was Europe, the Middle East, Asia and Africa, with third-quarter RevPAR down 70.4 percent year over year, with Europe's decline of 72 percent the sharpest. Occupancy was at 31 percent. About 9 percent of the EMEAA portfolio, or 105 hotels, remained temporarily closed as of the end of September.
Greater China showed the best regional Q3 performance, with RevPAR declining 23 percent year over year, and just 11 percent for the month of September. Occupancy improved to 57 percent, compared with 32 percent for the second quarter and less than 10 percent in February.
Also during the quarter, IHG defaulted on payments to Service Properties Trust and ended its management agreements for 103 properties that will transfer to Sonesta International Hotels Corp.
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