IHG returns to profitability as it launches new luxury hotel brand

InterContinental Hotels Group (IHG) has returned to profitability in its half-year interim report ahead of the upcoming launch of a new “Luxury and Lifestyle” collection brand.

The Holiday Inn owner said it will be targeting around 1.5 million independently run rooms and expects the collection to attract more than 100 hotels within 10 years.

The announcement follows the hotel group’s recent trading update which saw pre-tax profits for the six months ended 30 June 2021 reach $67m (£48.3m), up from a previous year’s loss of $275m (£198.4m).

During the period, total revenue decreased by 5.5% to $1.17bn (£844m), including a $139m (£100.3m) reduction in “cost reimbursement” revenue which is incurred on behalf of managed and franchised properties and relates, predominantly, to payroll costs at managed properties where the group is the employer.

Keith Barr, CEO, IHG Hotels and Resorts, said: “Essential business travel was a key element of our resilience throughout the pandemic, and we are now seeing more group activity and corporate bookings start to come back. With occupancy and rate continuing to improve, nearly 50% of our hotels achieved RevPAR above 2019 levels in July.

“We’re also excited to announce that we’ll soon be launching a new Luxury and Lifestyle collection brand to provide further choice for guests and owners. Over the last four years we’ve added five new brands to create a portfolio of 16, each targeting a specific segment and enhancing our market reach.”

He added: “The actions we have taken during the last 18 months position us well to exceed our pre-pandemic level of growth and profitability. While there is a risk of trading volatility in the balance of the year, and discretionary business trips, group bookings and international travel will take time to fully recover, we are confident in the strength of IHG’s future prospects.”