Holiday Inn owner IHG sweetens shareholder returns on travel rebound

A normal view of an Intercontinental Lodge in London, Britain October 20, 2020. REUTERS/Matthew Childs/File Photograph

Aug 9 (Reuters) – IHG (IHG.L) introduced a $500 million share buyback on Tuesday after half-year revenue greater than doubled, boosted by greater room costs, robust demand for leisure journey and a restoration in enterprise stays, particularly in the US.

Lodge operators are benefiting as individuals spend extra on journey and ebook longer lodge stays, lifting occupancy charges and costs, though they’re going through dangers from cussed inflation and cost-of-living woes worldwide.

IHG’s shares, nonetheless, slipped 1.2% to 4,953 pence, as analysts fretted over the variety of lodge rooms it added within the first half and mentioned the group’s efficiency paled as compared with U.S. friends Marriott (MAR.O) and Hilton (HLT.N). learn extra

“Hilton and Marriott each beat by double digits in Q2 and had complete EBITDA forward of 2019 so this (IHG outcomes) ought to be taken as barely disappointing, particularly with no FY steering to provide consolation,” Berstein analysts mentioned in a be aware. EBITDA is earnings earlier than curiosity, tax, depreciation and amortisation.

IHG, proprietor of Crowne Plaza, Regent and Hualuxe, mentioned profitability within the Americas, its largest market, had surpassed pre-pandemic ranges, pushed primarily by home leisure demand.

Second-quarter income per out there room (RevPAR) – a key measure of profitability – for the Americas was 3.5% above 2019.

Web progress in IHG’s variety of rooms stood at 3% within the first half of the 12 months, partially hit by the group’s exit from Russia. Analysts on common anticipate 4% web system measurement progress for the total 12 months.

“While the financial outlook faces uncertainties as central banks and governments take motion to handle inflation, we stay assured in our enterprise mannequin,” IHG chief government officer Keith Barr mentioned in a press release.

Working revenue for the six-month interval ended June 30 rose to $361 million, in contrast with $138 million final 12 months.

The group, which has already resumed closing dividend funds, reinstated its interim dividend at 43.9 cents, a stage 10% greater than when it was final paid in 2019.

Reporting by Muhammed Husain and Yadarisa Shabong in Bengaluru; Modifying by Kirsten Donovan and Bradley Perrett

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