IHG maintains pipeline pace
IHG Hotels & Resorts has retained its rate of signings, adding 89 hotels to its pipeline in Q3 2022, almost identical to Q2’s 90 sites.
This represents around 13,200 extra upcoming keys, maintaining the global pipeline from the last quarter at a total of about 278,000 rooms, in itself a 2.9% year on year increase.
With a current global system size of circa 888,000 keys, equating to a net growth of 2.6% year on year, future developments comprise over 31% of the present portfolio. Current worldwide sites number 6,061 hotels – 67% across midscale segments and 33% across upscale and luxury.
While IHG did not confirm its total of pipeline sites as at 30 September 2022, at the end of Q2 it was 1,858 hotels, which would again represent around 31% of current system size. In the year to date, IHG has signed 43,950 keys.
Newer brand upswing
Keith Barr, CEO, IHG Hotels & Resorts, analysed: “The industry is experiencing lower levels of new hotel opening activity, and with a particular impact from the restrictions in China. Despite this, in this latest quarter, we opened 51 hotels and signed 89 more into our pipeline. In the year to date our newer brands grew to be 12% of signings, while conversions increased to be over 30% of openings. We are also achieving the expected lowering of the removal rate to around 1.5%, with this driven by the success of the review activity undertaken last year that further improved the quality and consistency of our estate.
“We remain focused on our strategy to develop IHG’s portfolio of brands, invest in leading technology and transform our loyalty programme. These appeal very strongly to hotel owners to join our enterprise platform, and we continue to explore a number of organic opportunities to help deliver on our ambitions for net system size growth. We have also proven the resiliency of our business model and the ability for IHG to respond and adapt to opportunities and to macroeconomic uncertainties. These reinforce the confidence we have in our ability to drive attractive levels of long-term, sustainable growth.”
Breaking the figures down into broad regions, we see that in the Americas, gross system size growth was 2.2% year on year, with 2,800 rooms/22 hotels opened in the quarter. Net system size growth was 0.8% year on year on an adjusted basis.
Around 5,300 rooms comprising 50 hotels were added to the pipeline, around 40% more than the prior quarter. Year-to-date signings of 16,900 keys/158 hotels are more than 40% ahead of each of the last two years.
Rest of the world
The vast Europe, Middle East, Africa and Asia classification experienced a significant gross system size growth of 5.9% year on year, with 1,400 rooms – nine hotels – opening in the quarter. Net system size growth was 3.6% year on year on an adjusted basis. There were 2,500 rooms/13 hotels added to the pipeline.
IHG separates out Greater China data from the rest of Asia, and this shows an even swifter gross system size increase of 8.7% year on year, with 3,800 rooms (20 hotels) opened in the quarter. Covid-related restrictions have continued to impact the ability for new hotels to open, though the pace picked up from only five openings in Q1 and 14 in Q2. Net system size growth was 6.9% year on year on an adjusted basis. Signings also rose from the prior quarter, with 5,400 rooms/26 hotels added to the pipeline.
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IHG operates hotels in three different ways – as a franchisor, as a manager and on an owned and leased basis.