Systemwide IHG Hotels & Resorts business transient travel room nights in the first half of 2024 dropped by 1 percent year over year, the company announced Tuesday during a quarterly earnings call, but executives brushed off the result, pointing instead to rising group demand.
Systemwide first-half business transient average daily rate increased 3 percent year over year, with revenue for the segment up 1 percent. In the United States, business travel room nights declined 2 percent, while ADR increased 2 percent and revenue held steady.
When asked about the trend, IHG CEO Elie Maalouf said he wasn't concerned, citing increasing group room nights both in the U.S. and systemwide.
"Room nights in our business segment were down in the U.S. year over year, but what I'd call out also is that group was up significantly," Maalouf said during the earnings call. "Both are business travel. One is business transient, one is business group. Sometimes there's a little more of this or that. We're not seeing a trend there."
Systemwide first-half group revenue increased 7 percent year over year on a 2 percent increase in room nights and a 5 percent increase in ADR. In the U.S., the figures were the same, other than an 8 percent increase in revenue.
"Our corporate rate negotiations were pretty successful at the end of last year," Maalouf said. "We're seeing them flow into this year. Rate was up for the half for business. Room nights were down a bit, but group nights were up more, and group rate was up too, so group revenue more than made up for it."
"We might be seeing corporations getting their people together more in groups in the first half of the year," he continued, "but it's all business travel, and we're happy it's all growing."
IHG Q2 Metrics
IHG systemwide second-quarter revenue per available room increased 3.1 percent year over year to $92.57, while occupancy increased 0.9 percentage points to 70.6 percent and ADR increased 1.8 percent to $131.14.
In the Americas region, IHG second-quarter RevPAR increased 3.2 percent year over year to $103.54, while occupancy increased 1 percentage point to 72.6 percent and ADR rose 1.8 percent to $142.55.
IHG's first-half revenue from reportable segments increased 7 percent year over year to $1.1 billion, and its operating profit increased 12 percent to $535 million.
The hotel company opened 126 hotels totaling 18,000 rooms in the first half, increasing its portfolio to 6,430 hotels and about 955,000 rooms. Its development pipeline increased 15 percent year over year to about 330,000 rooms.
RELATED: IHG Q1 performance