Pent-up travel demand — which drove international travel restoration following the Covid-19 pandemic — is over, mentioned Intercontinental Hotels Group CEO Elie Maalouf.
“People started traveling really by the end of 2020 as restrictions started to lift,” he mentioned. “So we’re really past revenge travel — even in China.”
The firm’s newest quarterly replace confirmed travel demand remained sturdy in the course of the shut of the summer season travel season.
“We think we’re in a sustainable place,” Maalouf mentioned. “Our bookings for groups and meetings going into 2024 and beyond are the strongest we’ve seen in a very long time.”
“We’re pleased with the demand that we’re seeing from travelers … and hope it continues,” he added.
IHG’s third quarter buying and selling replace, which revealed Friday, confirmed the corporate’s income per obtainable room — or “revpar” — was up 10.5% in comparison with third quarter 2022, and practically 13% increased in comparison with the third quarter of 2019, which was earlier than the pandemic.
That’s regardless of a 3% drop in revpar, in comparison with 2019, in giant cities in Greater China, that are extra depending on worldwide vacationers.
Maalouf advised CNBC that lack of “airlift,” or flight capability, into China is under 50% of prepandemic ranges, which is affecting travel restoration in cities like Beijing, Shanghai, Guangzhou and Shenzhen.
“But if you look at the country as a whole, travel — which is mostly domestic in China — it’s recovered well above 2019,” he mentioned, including that greater than 80% of IHG’s enterprise in China is in mid-sized to smaller cities.
Room charges and international development
Occupancy ranges in the third quarter at IHG inns was 72% — simply 1% shy of pre-pandemic ranges, in response to the quarterly replace. But common room charges have jumped properly above 2019 ranges — up practically 6% in Greater China, 15% in the Americas, and 24% in Europe, Middle East, and Africa (EMEA) and Asia.
But rising charges are barely maintaining with inflation, mentioned Maalouf.
“Room rates have not really exceeded inflation in any of our markets,” he mentioned. “I think people’s willingness to travel is exhibited by the fact they’re willing to pay.”
IHG opened 50 inns — with some 7,700 rooms — from July to September, with a web system development of 4.7% year-on-year — this contains the corporate’s strategic alliance with the Spanish-owned Iberostar Hotels & Resorts, in response to the buying and selling replace.
Our regional headquarters for the Middle East is in Dubai — and it is staying in Dubai.
Elie Maalouf
CEO of Intercontinental Hotels Group
The firm at the moment operates greater than 6,200 inns worldwide and has one other 1,978 in the pipeline.
“We’re seeing growth really across all of our brands, across all of our businesses and across all of our regions,” he mentioned. But “the population of the middle class and GDP growth is shifting more east … Southeast Asia, Central Asia, China. That’s why we’re very committed to this region.”
Maalouf additionally addressed the launch of Garner — IHG’s latest model which is set to be priced decrease than Holiday Inn Express — the corporate’s largest model with 3,131 inns worldwide as of Sept. 30.
“In the United States, there are about 9,000 hotels that we think are interested in joining a system. Not that we’ll have 9,000 hotels joining us, but we think a strong proportion will.”
Maalouf mentioned the primary Garner inns will possible open by year-end in the United States.
Monitoring the Middle East
The CEO disputed experiences that IHG is establishing a Middle East regional headquarters in Saudi Arabia.
“Our regional headquarters for the Middle East is in Dubai — and it’s staying in Dubai,” he advised CNBC.
He mentioned the corporate lately opened an workplace in Riyadh, reflecting its plans to develop in the Kingdom. IHG operates 40 inns in Saudi Arabia — together with InterContinental, Crowne Plaza, Holiday Inn, Staybridge Suites and Voco inns — with one other 36 inns in the event pipeline.
The Israel-Hamas conflict may complicate formidable tourism targets in Saudi Arabia and the United Arab Emirates, however Maalouf mentioned IHG hasn’t modified its long-term plans in the area.
“It’s really heartbreaking, tragic, distressing to see the loss of life that’s occurring, and we hope that there’s a very quick end of the hostilities,” he mentioned.
“We’re monitoring the situation very closely. But we’ve also been in the region for generations, and we look forward to staying engaged.”