Holiday Inn owner IHG reports revenue beat despite US weakness

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(Reuters) -Holiday Inn owner InterContinental Hotels Group (IHG) reported on Thursday a marginal rise in a key revenue metric as growth in its international markets made up for weak performance in the United States.    The hotel operator said global revenue per available room (RevPAR) grew 0.1% for the three months ended September 30, compared with analysts’ expectations for a 0.1% fall, according to a company-compiled consensus.    IHG’s growth provides a glimmer of light amid generally darkening sentiment in the travel industry, rattled by shrinking consumer spending on leisure items as U.S. President Donald Trump’s trade policies raise concerns of pricier goods and higher living expenses.    For the third-quarter, it reported a 2.8% growth in room revenue across Europe, the Middle East, Africa and the Asia region, while in Greater China it fell 1.8% as domestic demand remains subdued.    “Long-term structural drivers of both travel demand and supply remain compelling, and while near-term macro-economic challenges persist in some markets, others are showing improvement or sustained growth”, Chief Executive Elie Maalouf said in a statement.    However, Maalouf noted that the U.S. continued to experience softer trading conditions during the quarter, marking a shift from his earlier optimism about the company’s domestic outlook.

Its RevPAR in the U.S., its largest market, fell 1.6% in the quarter, compared with growth of 1.2% in the prior year.

IHG’s outlook aligns with comments from Hilton Worldwide, which on Wednesday cut its 2025 room revenue forecast, citing the impact of the ongoing U.S. government shutdown on travel demand.     The government shutdown, now into its fourth week, has sparked widespread concerns in the corporate sector over potential disruptions to consumer spending, business travel and financial developments including public share listings.

IHG, known for its budget-friendly Holiday Inn and Avid Hotel brands, had been banking on domestic demand to support growth as international travel to the country cools amid tariff-driven disruptions and heightened border scrutiny.

On Thursday, the hotel operator said it expects to finish 2025 in line with consensus profit and earnings expectations.

Shares of the company fluctuated between slight gains and losses in volatile trading on Thursday.

“We see it as a solid print, probably better than expected on the back of cautious expectations into the print given weak U.S. RevPAR trends,” Jefferies analysts said in a note.  

(Reporting by Raechel Thankam Job in Bengaluru; Editing by Mrigank Dhaniwala and Jacqueline Wong)