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Intercontinental Hotel Group’s revenue bounces off price rises, but departure of chief financial officer puts pressure on Holiday Inn owner’s shares
- Holiday Inn’s parent company has posted a 28% increase in revenue per room
- Continued reduction in global Covid regulation has boosted activity
- CFO and Board Member Paul Edgecliffe-Johnson to Resign in Six Months
- Shares fell 4.25 percent in morning trading after the updates
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Shares of Intercontinental Hotel Group were under pressure on Friday as the impending departure of the financial boss overshadowed solid revenue growth.
The owner of the Holiday Inn, which is listed on the FTSE 100, reported a 28 percent increase in revenue per available room in the third quarter compared to last year.
The group also recorded a 13 percent increase in its average daily rate compared to 2021 following price increases.
IHG: Global hotel company owns brands such as Holiday Inn and Crowne Plaza
IHG has announced that Paul Edgecliffe-Johnson, Chief Financial Officer and Group Head of Strategy, will step down from its board of directors and the company in six months.
The group has begun to appoint his replacement.
Shares of IHG fell 4.25 percent in morning trading.
Regionally, the Group saw revenue per room rise by 6.8 percent in the Americas and 20 percent in Greater China, driven by a lifting of Covid-19 restrictions in the country.
Leisure activity grew 15 percent over the quarter and demand has remained strong, supported by high global employment figures.
Chief executive Keith Barr said: “The industry is experiencing a lower level of new hotel opening activity, and with a particular impact from the restrictions in China. Despite this, we opened 51 hotels in the last quarter and signed 89 more in our pipeline.
“In the year to date, our newer brands grew to 12 percent of signings, while conversions increased to over 30 percent of openings.
“We are also achieving the expected reduction in the removal rate to approximately 1.5 percent, thanks in part to the success of the review activity conducted last year which has further improved the quality and consistency of our estate.”
The company also revealed that some of its technology systems were subject to unauthorized access, disrupting the company’s bookings.
However, an investigation into the incident revealed that there was no access to guest data during the system breach.
It also confirmed that it has completed 59 percent of its share repurchase program, which started on August 9 this year and will expire on January 31, 2023. To date, the company has repurchased 5,648,895 shares at an average price of £46.12 per share.