InterContinental Hotels Group is steadily progressing on strategic initiatives it first detailed in February with a relaunch of the recently acquired Regent Hotels & Resorts brand, the opening of the first property for its midscale Avid Hotels brand, signings for its new Voco brand and expansion of Kimpton Hotels & Restaurants.
IHG CEO Keith Barr noted in the company's third-quarter trading update that it turned in its best performance for signings and openings in a decade, growing its net system size 5.1 percent year over year during the quarter. The company opened its first Avid Hotel in Oklahoma City in August and now has 150 hotels signed to the brand. IHG's Voco brand is on track to have 15 signings by year's end. Kimpton's portfolio of opened and signed properties now extends across 14 countries—including the U.K., Spain, Thailand and Japan—and its pipeline stands at 25 hotels. IHG's companywide global pipeline stands at 1,828 properties, or 267,235 rooms.
IHG acquired a majority stake in Regent Hotels & Resorts back in March as part of a strategy to grow its luxury portfolio. On Oct. 18, IHG announced a relaunch of Regent with three brand promises: to be "majestically intimate," offering experiences for individuals to discover, escape and indulge; to allow guests to stay "on their terms" by providing attentive service and frictionless technology; and to "inspire discoveries" by enabling guests to experience local culture and new tastes and ideas. Marketing speak aside, IHG expects to grow the brand from six hotels currently to more than 40 hotels in global gateway cities and resort locations.
Q3 Earnings
Systemwide average daily rate increased 1.7 percent year over year during the third quarter to $120.86, while occupancy fell 0.5 percentage points to 74.5 percent. The Americas region reported a 1 percentage point decline in occupancy to 73.9 percent but a 1.4 percent ADR increase to $124.56. The EMEA and Asia region saw a modest 0.2 percentage point gain in occupancy to 78.1 percent and a 2.2 percent increase in ADR to $128.18. Finally, Greater China reported a 0.8 percentage point increase in occupancy to 70.3 percent and a 3.6 percent ADR increase to $83.65.
IHG reports only mid-year and full-year revenue, but revenue per available room rose 1 percent for the third quarter. The company expects to return $500 million to shareholders through a special dividend with share consolidation paid out in the first quarter of 2019, subject to shareholder approval.
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