InterContinental CEO Says US hotel demand defies economy fears
IHG shares were up slightly Tuesday, taking gains for the year to 4.5 per cent.
Hotel demand in the US shows no sign of a potential recession that triggered Monday's global market selloff, according to the chief executive officer of InterContinental Hotels Group Plc.
The UK-based company, which operates the Holiday Inn and Crowne Plaza brands, saw the strong start to summer continue into July and August, Elie Maalouf said in an interview with Bloomberg TV.
"As long as GDP continues to grow, as long as the middle class continues to grow, travel is something people are really preferring to do and continue to want to do," Maalouf said. "So we're very optimistic about continued demand growth going forward in the long term."
Global markets plunged on Monday amid concerns that the US could enter a recession, although some calm returned on Tuesday.
Maalouf suggested there was room to increase prices further than other sectors given hotel rates have only kept up with inflation since the pandemic.
That's in stark contrast with other parts of the travel industry. Ryanair Holdings Plc said fares will tumble this summer as consumers pull back on spending, joining similar warnings from other airlines such as Deutsche Lufthansa AG, Qatar Airways, and Delta Air Lines Inc.
Maalouf was speaking after IHG reported a 4 per cent rise in total revenue to $2.32 billion for the first six months of the year. Revenue per available room increased 3 per cent in the period, with US room prices growing overall since April.
The business struggled in China, seeing average room prices drop 7 per cent in the second quarter, as the slowdown took hold.
IHG shares were up slightly Tuesday, taking gains for the year to 4.5 per cent.
Maalouf also said it was "troubling" to see far-right riots in the UK, where a small number of its hotels have been attacked because they're being used by the UK government to house asylum seekers. The violence has also affected retailers.