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Terror impact on key IHG markets

Hotels in France, Turkey and Belgium suffered a summer slump in revenues due to ongoing “challenging trading conditions,” InterContinental Hotels Group disclosed today.

IHG saw “significant” declines in revenue per available room (revpar) in the three countries for the third quarter of the year.

France and Belgium have been the target of terrorist attacks while Turkey went through a failed coup earlier this year in addition to terrorism.

IHG’s global group revpar rose by 1.3% but was flat in Europe.

The UK saw revpar growth of 2.5% over the same period last year. This reflected solid trading in the provinces partially offset by flat performance in London, where industry-wide supply increases continue to have an impact, the company said.  

However, IHG chief executive Richard Solomans hailed a “solid performance” by the company during the three months.

“Looking ahead, while industry revpar growth has slowed, the fundamentals for the sector, and particularly for IHG, remain compelling,” he said. 

“This, combined with our winning strategy and the strength of our cash generative business model, will enable us to drive sustainable growth into the future. 

“Despite the uncertain environment in some markets, we remain confident in the outlook for the remainder of the year.”

The group’s initiatives to utilise digital innovation to enhance all stages of the guest journey, “means we will continue to generate more customised and informed interactions with our guests and deliver improved returns,” Solomans said.

IHG’s cloud-based guest reservation system remains on track for a phased introduction from the end of 2017.

Fifty one hotels were opened in the quarter, representing 7,000 rooms, increasing capacity by 3.5% to 754,000 rooms. A total of 22 properties with 3,000 rooms were removed.

The company signed 19,000 new rooms in the period – the highest in the third quarter since 2008 – taking the pipeline to 230,000 rooms.

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