Better-than-expected performance coupled with consistent portfolio growth gave IHG Hotels & Resorts a boost in the third quarter.
Across its global hotel portfolio, IHG reported revenue per available room rose 1.4%, which exceeded the hospitality industry's projections of 1.3% RevPAR growth, said Chief Financial Officer Michael Glover. He added IHG executives are feeling very comfortable with the British firm’s performance despite booking windows remaining very short and the U.S. hotel market staying sluggish.
Along with its earnings performance and hotel development targets, IHG made two notable announcements during its third-quarter results.
First, IHG CEO Elie Maalouf teased a new hotel collection brand that the company plans to launch soon in Europe in the upper to upper-upscale segment.
“It will complement our premium conversion brand Voco, which now is in 30 countries since we launched it in 2018. … Over half of the supply [in Europe] is still independent. There is a strong addressable market of owners wishing to align with the strength of our enterprise systems that are shown to deliver RevPAR premiums and group and corporate business,” he said.
Maalouf added the new brand also will replicate the success of another of its collection brands, Vignette, which IHG launched in 2021.
“[Vignette] is positioned higher, and already it is tracking higher than its goals, with 27 opened and 41 in the pipeline, of the target of 100 we set to open within the decade since its launch,” he said. “The new brand’s name, positioning, visual aspects, launch timings and projections of openings will be shared within next few months.”
Similarly, IHG launched its Voco hotel brand in Europe before spreading globally, a strategy the company plans to use for its new brand, Maalouf said.
IHG acquired the Ruby Hotels brand in February, another hotel brand that has its foundation in Europe. Maalouf said Ruby is now available for hotel development in the U.S.
IHG executives also announced on Thursday's earnings call that as of Jan. 1, 2026, IHG’s share price on the London Stock Exchange will be changed from the U.K. pound sterling to the U.S. dollar. Glover said IHG has reported its earnings results in U.S. dollars for the past 17 years and that the change on the London market is being made to simplify earnings reporting and to better align share price to performance.
He added this change has only recently been made possible due to a change in the regulations within the exchange’s Financial Times Stock Exchange U.K. Index Series Ground Rules.
“It is not a precursor to any other changes,” Glover said, adding the currency change will not have an impact on IHG’s London listing in any other way and also will not have an impact on its average daily rate listing on Wall Street.
Tallying tailwinds
Maalouf said he saw IHG's third-quarter results as an indication of positivity in global hotel markets and in the company itself.
“There was another strong performance in Europe, Middle East, Africa and Asia and a further performance increase in China. They underline the power of our diversified global footprint, and we are optimistic about long-term demand drivers,” he said.
Despite noise that travel spend and spend on leisure and retail services in general is down, Maalouf shared several reasons for optimism. These include equity markets returning following a pause during tariff squabbles; record U.S. employment; wages outpacing inflation; travel spend being consistent and resilient; interest rates dropping; Transportation Security Administration passenger volumes growing despite the U.S. government shutdown; and more clarity on tax situations.
Maalouf also predicted a major wave of hotel demand would be fueled by “super-cycle investment” in data centers. He pointed to Amazon, BlackRock, Meta, Microsoft, Nvidia and Oracle that have invested billions of dollars to develop such properties.
“We are on course for 2025 being one of our biggest years,” he said. “There are structural tailwinds, and we believe new builds will come back. Their room sizes might be different, but we will be ready for that. I feel good about the trajectory of our net systems growth. What encourages us further is the strong pace of signings and the speed of opening of those signings. We are seeing lower inflation, lower energy costs.”
He added these tailwinds are resulting in growth, even though it might be slow growth.
In the third quarter, IHG opened 14,500 rooms in 99 hotels, a 17% year-over-year increase. Glover said those openings don't include IHG’s partnership with German hotel-management firm Novum Hospitality, which was signed in April 2024.
IHG has added a total of 46,000 hotel rooms — which does include Novum conversions — year to date, which Glover said is the company's “strongest ever performance over the first three quarters.”
He added more than 50% of openings were in “quick-to-open conversions.”
IHG reported a 10.4% year-to-date increase in hotel rooms in Europe, the Middle East, Africa and Asia, which Glover said sets up 2025 to be a record year in that metric. He added the performance of IHG's hotels in China in the third quarter continued to perform well.
“China is on track for its second consecutive year of record development growth,” he said.
IHG currently has $4.1 billion of bonds outstanding, Glover said, “with a blended borrowing cost of approximately 4.3%” and that the 2025 target of returning $900 million to shareholders is “78% complete.”
Maalouf said IHG remains on track to meet its full-year consensus profit and earnings expectations.
As of press time, IHG stock was trading at £92.28 ($123.15) per share, down 8.1% year to date. The London Stock Exchange’s FTSE 100 index was up 16% over the same period.