hotels direct bookings

With talk of a bid from China’s Anbang Insurance Group being dismissed by IHG, Sally White takes a look at what the future holds

Pity the poor management that delivers financial results to the market in the dog days of August. Take InterContinental Hotels Group (IHG), which reported a good set of interims with underlying earnings per share up 11% and gave investors a 9% dividend rise. Yet all the market is talking about is the likelihood of a successful bid from China’s Anbang Insurance Group. (Yes, the group that walked away from a $14 billion offer for Starwood.)

IHG certainly does not want to discuss that, and in fact issued terse denials. Nor, in its briefing to analysts on these first-half figures, did it talk of making more mega acquisitions itself. In fact, CEO Richard Solomons says that IHG has enough scale – it does after all own the world largest brand by a factor of two in Holiday Inn, and seems happy with its existing pipeline.

As a group it signed up 35,000 more rooms in the first half taking the pipeline to 222,000 and opened 17,000, “the fastest pace of growth since 2011”. It managed an underlying 5% revenue growth driven by a 2% rise in REVPAR, and achieved a 10% gain in underlying profit in the first half. In the US occupancy was close to peak at 70%.

He was happy to highlight, however, progress on two important areas in IHG’s commercial strategy – direct bookings and the loyalty programme.

“Driving direct bookings is a core element of this strategy and our focus is paying off. Digital is our largest channel, delivering over 20% or $4.2 billion of our gross room’s revenue per annum, up from just 12% in 2005,” he outlined.

Read rest of the article at Eye for Travel