Hotels group sees fall in revenue growth after slowdown in bookings
INTERCONTINENTAL HOTELS Group (IHG) saw revenue growth fall after a slowdown in European and American bookings.
The company said revenue per available room, which is the sector’s preferred measure, grew 1.3 per cent in the third quarter, compared to 2.5 per cent over the previous quarter.
A number of IHG’s American hotels are concentrated in oil producing markets, which have been impacted by the slide in oil prices.
Revenue per available room fell 7.3 per cent in those markets, compared to 2.5 per cent growth in the rest of the region.
In Europe, “ongoing challenging conditions” led to revenue declines in countries including France, Turkey and Belgium - all of which have seen tourist demand slow following terror attacks.
Across Europe, revenue per available room growth was flat.
However, chief executive Richard Solomons maintained a positive view, saying that while revenue growth has slowed “the fundamentals for the sector, and particularly for IHG, remain compelling”. Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “There’s nothing inherently ugly in today’s results, they’re just a little disappointing.
“That’s the problem with being a successful and rapidly growing company: people start to have expectations.
“Exposure to North American oil producing regions continues to hurt, despite the fact that the group should now be seeing easier comparatives here as we pass the point where lower oil prices kicked in last year.”