InterContinental
Hotels Group during the third quarter reached its highest ever U.S. occupancy,
the company announced Tuesday.
Occupancy hit about 76 percent at IHG’s U.S.
properties, CFO Paul Edgecliffe-Johnson
said during an earnings call. That allowed the company to increase its average
daily rate almost 4 percent year over year. For the Americas, occupancy
increased 0.3 percentage points to 74.9 percent, and ADR increased 3.9 percent
to $120.40.
In
spite of the company’s positive performance and rate growth, one analyst from
Goldman Sachs questioned why, considering the high occupancy, the company
couldn't do more to push rates at this point in the cycle. Edgecliffe-Johnson
responded:
“If you look at the performance that we had, we've pushed rate up
4 percent, the Holiday Inn brand family has a rate premium already and we
continue to work at that. You do have some corporate pre-negotiated
rates that are set earlier in the year, so you have to work within those
parameters, but we continue to work at it.”
Oil
and gas states, which comprise 13 percent of IHG’s U.S. portfolio, continue to impact
performance in the region negatively. The same is true in Canada, as oil and
gas areas account for 20 percent of the company’s performance in the country, Edgecliffe-Johnson
said.
Companywide,
occupancy grew 0.9 percentage points year over year to 74.5 percent and ADR increased
3.6 percent to $121.56.
Edgecliffe-Johnson said the company signed
approximately 16,000 rooms into its pipeline during the quarter, IHG’s fastest pace
of hotel signings in seven years. As of Sept. 30, the companywide pipeline was 217,709
rooms across 1,319 properties. The Holiday Inn brand represented about 70
percent of signings and openings during the third quarter. The Americas and
Greater China lead in pipeline expansion.
In
September the company completed the $929 million sale of the InterContinental
Hong Kong, which marked the final stage of IHG’s asset-disposal program.
Ninety-five percent of the company's profits are now generated through its fee
business, making it “a pure-play, asset-light hotel company,” Edgecliffe-Johnson said.