IHG Hotels & Resorts has both the “strength and diversity” to withstand any macroeconomic volatility, executives said.
IHG CEO Elie Maalouf said the British hotel firm is on track to meet current full-year 2025 consensus profit expectations despite that volatility.
“It has been a very busy and productive [2025] start for our business,” he said on a first-quarter earnings conference call.
Maalouf hinted global volatility might have eased a little, even in the last few days.
Analysts, pointing out that major U.S.-based peers such as Hilton and Marriott International both lowered full-year outlooks in their earnings reports, asked whether IHG might have a different perspective.
“I am encouraged by the news that U.S. and U.K. are nearing to sign a trade agreement,” Maalouf said. He added he recently sat down for discussions with the chair of the U.S. House Committee on Ways & Means and with U.K. ministers and civil servants.
He said while RevPAR expectations may well come down a little from the current consensus of 2.3% growth for the year, the firm remained comfortable with the profit consensus.
IHG's call with analysts came just before news that U.S. President Donald Trump likely today would sign what he called a "comprehensive" trade agreement with the United Kingdom, which has been in the works in recent weeks.
IHG Chief Financial Officer Michael Glover said IHG has recalculated a negative effect on its business of the recent drop in the value of the U.S. dollar to approximately $12 million, but recently reduced that projection to $8 million.
“That [number] can move in the year … but we are an international business,” Glover said, who added IHG's full-year outlook would not be materially affected by movements in U.S. dollar valuation.
U.S. government strategies of reducing travel spend also are not of huge concern, Maalouf said.
“Total [U.S.] government spend — that is state, federal and local — is less than 5% of our revenue. Federal is 3.5% or less. Yes, we, along with everybody else, saw a decline in March, continuing into April, but state business was up. [Government spend] has been impacted Q1, and this will continue, but we performed well despite that. It is low-rated business,” Maalouf said.
He added that international travel to IHG hotels in the U.S. equals 5% of its business, and from Canada and Mexico, it is 1.5%.
“We saw a drop from Canada, but total international to the U.S. was positive for every month in this quarter, and if [that spend] goes somewhere else, we are well-positioned to capture it,” he said.
In the first 90 days of the year, revenue per available room at IHG's U.S. hotels increased year over year by 3.5% and Americas occupancy rose 7%, Glover said.
“Our confidence remains for growth beyond [the second quarter], and we already see business on the books higher than last year for July and August,” he said.
In the Americas, IHG opened more than 4,000 rooms in the first quarter in 31 hotels, a 30% year-over-year jump, which included 12 in the Holiday Inn family, Glover said.
IHG's China portfolio continues to see negative year-over-year growth, but Maalouf said he is heartened by increased outbound travel and spend from the region, even if most of that remains in the Southeast Asia, South Korea and Japan markets.
“Could we be more flattish with RevPAR in [Greater China]? I think so. A lot of people have belief there, and we should have a record year in terms of signings,” he added.
Maalouf said RevPAR in the U.K. “was broadly flat” but in “continental Europe it is up 5.6%.”
IHG opened almost 15,000 rooms in 86 hotels in the first quarter, which is more than double that of the same period last year. IHG's total hotel portfolio now has more than 987,000 rooms in 6,668 hotels.
“We signed 25,800 rooms in 124 hotels, or more than 20,000 if you exclude the Ruby Hotels acquisitions with its 30 hotels. At Ruby, we have already two signings since the acquisition. … Forty percent of our organic signings were conversions,” Glover said.
IHG signed four hotels in Saudi Arabia, one each for its Regent, Vignette, Voco and Holiday Inn brands, Glover added.
In the first quarter, IHG opened its first net-zero carbon hotel, the Voco Zeal Exeter Science Park by IHG in Exeter, England.
In its previously announced share buyback program, IHG has returned $324 million of 2025's $900 million target, Maalouf said reduced the company's share count by a further 1.9%.
“Fee margins are up 700 points from 2019. We do not see we have to do anything other than maintain our strong discipline to capture upside,” Maalouf added.
As of press time, IHG stock was trading at £87.76 ($117.04) a share, down 11.9% year to date. The London Stock Exchange’s FTSE 100 index was up 4.4% over the same period.