IHG growth slows in second quarter as Middle East offsets strong US
InterContinental Hotels Group PLC on Tuesday enjoyed a World Cup boost in its second quarter, lifting performance in its US division, but difficulties elsewhere saw operating profit and revenue fall slightly short of market hopes.
The Windsor, Berkshire-based hotel operator, which owns Holiday Inn and Crowne Plaza, said pretax profit was USD578 million in the first half of 2026, down 8.7% from USD633 million a year earlier. In the prior year, IHG made a USD79 million foreign exchange gain, while this time around it reported a USD7 million hit.
Operating profit from reportable segments increased 10% to USD665 million from USD604 million, just shy of USD671 million Bloomberg consensus.
Total revenue grew 5.6% to USD2.67 billion from USD2.52 billion, with revenue from reportable segments up 7% to USD1.26 billion from USD1.18 billion, compared to consensus of USD1.27 billion.
Shares in IHG were down 2.1% at USD152.35 each in London on Tuesday morning.
Gross system growth was 6.5% year-on-year, with net system growth of 5.0%, as a record 31,500 rooms opened across 197 hotels in the half-year, IHG said.
Revenue per available room, a closely watched metric in the hotel sector, climbed 4.1% on-year in the first half, with growth of 3.5% in the second quarter, which slowed from 4.4% in the first three months of 2026.
While growth at group level eased in the second quarter, it picked up in the Americas alone, to 5.4% in the second quarter from 3.6% in the first quarter, supported by the World Cup, a "stronger US economy, as well as comparatives that became easier in Q2".
RevPAR in the Americas was 4.8% higher year-on-year in the first half overall.
In the Europe, Middle East, Africa & Australasia segment, RevPAR grew 3.0% in the first half, but growth slowed markedly to 0.6% in the second quarter from 5.6% in the first three months of the year, owing to the US-Iran conflict.
The Middle East region, which accounts for 19% of EMEAA's system and 5% of the firm globally, saw a 2% RevPAR fall in the first quarter and 19% in the second.
IHG noted: "The rest of the EMEAA region experienced RevPAR growth of 7% in Q1 and 4% growth in Q2. The growth in Q2 included 3.1% in the UK, 2.3% in Continental Europe and 6.0% in East Asia & Pacific."
Finally, RevPAR rose 3.1% in the first half in Greater China, though like EMEAA, there was a second quarter slowdown. It rose 5.7% in the first quarter and then 0.8% in the second.
IHG lifted its interim dividend by 10% to 64.5 cents per share from 58.6, and said it is "on track to return" USD1.2 billion to shareholders in 2026.
Looking ahead, Chief Executive Officer Elie Maalouf said: "We remain on track to meet full year consensus profit and earnings expectations. We are also confident in the successful delivery of our growth algorithm, which is driven by the strength of IHG's enterprise platform and our ability to further capitalise on our scale, leading positions and the attractive long-term demand drivers for our markets."
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