An IHG resort
(Picture: IHG )The rise of “revenge travel” and the return of business trips has helped InterContinental Hotel Group return to profit.
The Crowne Plaza and Holiday Inn owner made a profit of $494 million (£363 million) last year, compared with a loss of $153 million in 2020. The rebound came as travel began to resume, particularly in the US and China.
Revenue per available room — a key industry metric — was running at 83% of pre-pandemic levels by the end of last year.
Paul Edgecliffe-Johnson, IHG’s CFO and head of strategy, said 2022 was set to be a historic year for holidays thanks to a trend that’s been dubbed “revenge travel”: big trips to make up for lost time.
Edgecliffe-Johnson said IHG was predicting “long and high levels” of demand from holidaymakers this year, starting with Spring Break season in the US and continuing until Christmas. He summed the mood up as: “We’ve missed out on this so we’re coming back hard.” He urged travelers to book early to avoid disappointment.
Even business travel is returning, despite some predictions during the pandemic that online meetings could replace corporate travel for good.
Edgecliffe-Johnson said business bookings in the US were just 8% below 2019 levels at the end of last year.
“You can’t do the same thing over Zoom,” he said. “That personal connection is important.”
IHG added 44,000 new rooms last year and Edgecliffe-Johnson predicted growth of around 4% this year.
Total revenue rose 21% to $2.9 billion in 2021. The company rewarded investors with a $0.86-a-share dividend worth $150 million. That makes up for a divi cancelled in 2020 as the pandemic hit.
Edgecliffe-Johnson called it a “return to normal”, saying: “Our history has been to return cash that we don’t need.” He said future dividends were likely and didn’t rule out a share buyback.
Shares rose 44p to 4932p.
