INTERCONTINENTAL Hotels Group’s (IHG) room revenue growth slowed in the second quarter as a sharp decline in the Middle East offset continued gains in the United States and China.
The Holiday Inn owner reported global revenue per available room (RevPAR) growth of 3.5 percent in the three months to June, down from 4.4 percent in the first quarter.
Its shares were down 2.2 percent in early trading.
Demand from affluent travelers has remained resilient and was further supported by soccer World Cup matches held across the US, Canada and Mexico. However, the Iran war, now in its sixth month, has weighed on hotels and travel companies in the Middle East.
“While there are ongoing impacts from the Middle East conflict, including some wider disruption to international travel flows, we continue to expect these to be fully offset by growth in demand elsewhere,” CEO Elie Maalouf said in a statement.
US-listed rivals Hilton and Marriott said last month that demand in the US remained strong, helped by the World Cup, while affluent travelers continued to spend despite persistent inflation. Both companies also reported weaker revenue from the Middle East.
The Middle East, part of IHG’s second-largest EMEAA (Europe, the Middle East, Africa and Australasia) region and accounting for about 5 percent of global revenue, recorded a 19-percent drop in RevPAR in the second quarter. RevPAR rose 5.4 percent in the Americas and 0.8 percent in China.
IHG said it was on track to meet market expectations for annual revenue and earnings.
