The owner of Holiday Inn has reported soaring half-year profits thanks to the bounceback in demand for business and leisure travel.
Intercontinental Hotels Group (IHG) reported pre-tax profits jumping to 299 million US dollars (£248 million) in the six months to June 30, up from 67 million US dollars (£55 million) a year earlier.
Group earnings more than doubled to 361 million US dollars (£299 million) from 138 million US dollars (£114 million).
While the economic outlook faces uncertainties as central banks and governments take action to manage inflation, we remain confident in our business model
Keith Barr, IHG
The UK market saw revenue per available room (RevPAR) – a key measure of performance for hotel chains – edge closer to levels seen before the pandemic struck, down 2% in the second quarter versus 2019, against a fall of 8% for the first half as a whole.
It chalked up a strong improvement in London sites as tourism bounced back, but RevPAR in the capital was still down 10% against 2019, while hotels in the regions across the UK were 1% higher versus 2019.
IHG said owners of its hotels worldwide were facing surging costs and staff hiring difficulties, but added it was using its central buying programme and group scale to help offset this, for example by offering ways to change menus to make savings.
Some smaller hotel owners in the UK have been able to make savings of 7% to 15% on food costs and 10% to 15% on drink costs, it said.
The group announced it was resuming its interim dividend payout following the bumper set of results, at a level that is 10% higher than the last time it was paid out in 2019, while it also unveiled further shareholder returns through a 500 million US dollar (£414 million) share buyback.
Keith Barr, chief executive of IHG Hotels and Resorts, said: “We saw continued strong trading in the first half of 2022 with increased demand for travel in most of our markets.
“This brought group RevPAR very close to pre-pandemic levels in the second quarter.”
He added: “While the economic outlook faces uncertainties as central banks and governments take action to manage inflation, we remain confident in our business model and the attractive industry fundamentals that will drive long-term sustainable growth.”