IHG Hotels & Resorts

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#1
The major hospitality brands (Marriott, Hilton and IHG) have very similar business model - asset light, and also similar asset allocation - borrowing+FCF to do SBB (SBB account for 80% of the shareholder returns, while dividends ~20%)

YTD 2024, travel has considerably slowed - RevPAR increases are at low/mid single digits and fee revenue at mid-high single digits. But operating costs have increased disproportionally and together with higher interest costs from bigger debt loads, net earnings are starting to see drop YoY. Of course, the key 3rd quarter for travel will probably reduce the deficit a little.

Putting the normalization of growth aside, the more interesting development would be the agreement with NOVUM Hospitality for its conversion of its 119 hotels in Germany/Austria in the next 5 years. NOVUM Hospitality is a family owned hotel group operator/owner using its own brands and also operating mgt contracts for 3rd party owners under franchise models. Basically, we can conclude that NOVUM Hospitality has decided - if we can't beat them, then let's join them. Their 119hotels eventually will join IHG's reward system, adopt their frontend/backend IT systems and get a better bang for their advertising dollar.

InterContinental Hotels Group PLC Half Year Results to 30 June 2024

We celebrated 126 hotel openings in the half and the signing of a record-breaking 384 properties, equivalent to more than two a day. These included the first six openings and 118 signings from the NOVUM Hospitality agreement, which doubles our presence in the important and attractive German market. After growth of +7% in Q1, a very busy Q2 saw +23% more signings year-on-year or a more than doubling when including NOVUM, and this keeps us on track for net system size growth expectations.

1H24 results:
https://www.ihgplc.com/~/media/Files/I/I...g-2024.pdf
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