InterContinental Hotels Group Q3 Results

Shares of InterContinental Hotels Group (LON:IHG) fell on Tuesday following disappointing third-quarter results, which did not meet market expectations.

As of 4:47 am (0847 GMT), InterContinental Hotels Group was trading 1.6% lower at £8,427.4.

According to UBS analysts, IHG’s revenue per available room (RevPAR) growth was softer than anticipated, with a year-over-year increase of 1.5%, underwhelming UBS’s estimate of 2.7% and the market consensus of 2.1%.

The underperformance was largely attributed to regional variations. In China, RevPAR declined by 10.3%, exceeding UBS’s forecast of a 9% drop. Similarly, results in the Americas were below expectations, with RevPAR growth at 1.7% versus the anticipated 2.25%. The EMEA markets also underperformed, achieving a 4.9% gain compared to UBS’s target of 6%.

Despite a 0.1% dip in occupancy, IHG managed a 1.7% increase in rates, partially offsetting weaker room demand.

UBS analysts noted that although IHG expanded its system size by 4.1% year-over-year, the results fell short of expectations, leading to market disappointment.

IHG maintained its guidance, anticipating alignment with broader market forecasts for the full year. However, investors are wary of the near-term outlook, especially with the expiration of a key affiliate contract in Venice at the beginning of 2025, which will shrink the company’s system size. Though the financial impact of this contract loss is expected to be minimal, it has contributed to cautious market sentiment.

The weaker-than-expected report has led some analysts to suggest potential profit-taking among investors, contributing to the decline in IHG’s stock price. UBS indicates that while the company’s fundamentals remain solid, these results reflect ongoing volatility in global travel and an uneven recovery across regions.