IHG's U.S. RevPAR dips 1.9 percent in first quarter of 2024

IHG Hotels & Resorts’ first-quarter 2024 RevPAR in the Americas declined by 0.3 percent year-over-year. This was driven by a 1.9 percent decrease in U.S. RevPAR, countered by an 11.3 percent increase in Canada, Latin America, and the Caribbean combined. Occupancy dropped to 63.1 percent, down by 1.1 percentage points, while ADR in the Americas rose by 1.5 percent.

Meanwhile, IHG’s global RevPAR increased by 2.6 percent in the first quarter and the company opened 6,200 rooms (46 hotels) globally, marking an 11.1 percent year-over-year increase after adjusting for Iberostar, IHG said in a statement.

“Global RevPAR in the first quarter of 2024 continued to grow, up 2.6 percent, reflecting the strength of our globally diverse footprint,” said Elie Maalouf, IHG Hotels & Resorts’ CEO. “There was an impressive performance in EMEAA, which was up nearly 9 percent. The Americas, having already recovered very strongly, was broadly flat due to some adverse calendar timing, and Greater China grew by 2.5 percent and will continue to benefit from returning international inbound travel this year. Global occupancy moved up to 62 percent and ADR increased by a further 2 percent as pricing remained robust, reflecting the complete return of leisure, business and group travel.”

First quarter highlights:

• Gross system size growth is up 5 percent year-over-year and up 0.7 percent year-to-date.
• Net system size grew 3.4 percent year-over-year and is flat year-to-date; adjusting for Iberostar, net system size is up 3.2 percent year-over-year and flat year-to-date.
• The global system at the end of the quarter comprised 946,000 rooms and 6,368 hotels, with 66 percent across midscale segments and 34 percent across upscale and luxury.
• Signed agreements for 17,700 rooms and 129 hotels in the first quarter, reflecting a 7.1 percent year-over-year increase; the global pipeline at the end of the quarter consisted of 305,000 rooms and 2,079 hotels, up 6.6 percent year-over-year.
• Implemented changes to system fund arrangements, aimed at improving owner economics and growing IHG’s ancillary fee streams.

Americas revenue decline

IHG said that group demand was strongest in the Americas, with leisure also experiencing year-over-year growth, while business revenue saw a slight decrease. The timing of Easter led to lower demand in late March, particularly for business travel, but this was followed by increased demand in April. Consequently, U.S. RevPAR has outperformed last year over the past eight weeks.

Gross system growth reached 2.3 percent year-over-year, with year-to-date growth at 0.6 percent, and 3,100 rooms and 26 hotels opened in the quarter. Net system size growth was 1 percent year-over-year and flat year-to-date. Additionally, the pipeline saw the addition of 5,100 rooms with 61 hotels, reflecting a signing pace similar to that of the same quarter last year.

Meanwhile, signings included nine Garner and eight Avid hotels, along with 11 hotels within the Holiday Inn brand family, 25 across IHG’s extended-stay brands, and five within Luxury & Lifestyle.

46 new hotels

IHG opened more than 6,200 rooms across 46 hotels in the first quarter globally, and signed nearly 18,000 rooms across 129 properties to increase the company’s pipeline by 6.6 percent year-over-year.

“Compared to the same quarter last year, room openings rose 11 percent adjusting for Iberostar, and signings grew 7 percent,” said Maalouf. “‘Quicker to market’ conversions generated more than 35 percent of openings and signings in the quarter, reflecting the attractiveness of our brands and enterprise platform.”

Maalouf said that the company's system fund arrangements will enhance economics for owners, while sustained growth in ancillary fee streams will deliver value aligned with strategic priorities.

“The combined power of our platform and efficiency of our operating model will continue to drive IHG forward,” he added. “We are excited about the future and our ability to capitalize further on our strengths, scale and leading positions, and on the attractive, long-term demand drivers for our markets.”

In April, IHG announced an agreement with NOVUM Hospitality to double its presence in Germany through conversions, bolstering its position in a vital travel market. The deal adds 119 hotels with 17,700 rooms to IHG's global system, enhancing confidence in the company's net system growth outlook.

Hilton reported $268 million in net income for the first quarter of 2024, with system-wide comparable RevPAR up 2 percent from Q1 2023. Meanwhile, Wyndham's first quarter net income fell to $16 million from $67 million in the same period of 2023.