InterContinental Hotels results ignore geopolitical tensions

InterContinental Hotels Group (IHG) reported strong operational performance in the first quarter of 2026, with global RevPAR up 4.4% at constant currencies, supported by increases in rates and occupancy. As a reminder, RevPar is one of the main performance indicators in the hotel industry and measures the revenue generated per available room, whether occupied or not.

In detail, RevPAR increased by 3.6% in the Americas zone, including 3.4% in the United States, despite an already high basis of comparison last year. The EMEAA (Europe, Middle East, Africa and Asia) region recorded RevPAR growth of 5.6%, although the Middle East suffered a sharp slowdown in March due to regional conflict. Finally, in “Greater China”, RevPAR accelerated to 5.7%, driven by strong leisure demand during the Chinese New Year and an improvement in business travel.

IHG also reports that the average daily rate (ADR) increased by 2%, while the occupancy rate gained 1.5 points year-on-year. This indicator reveals the average price paid for rooms actually sold.

One million rooms and 7,000 hotels

By customer segment, revenues from groups increased by 7%, those from business travel by 6%, while leisure grew by 1%.

IHG finally reports having opened 14,867 rooms during the first quarter, bringing its global portfolio to more than 1.03 million rooms spread across 7,014 hotels. Gross growth in the hotel portfolio reached 6.6% over one year, while net growth stood at 5%.

The pipeline continues to progress with 21,431 rooms signed over the quarter, up 6% excluding the acquisition of the Ruby brand in the comparison base. The developing portfolio now reaches 343,189 rooms.

The group is also continuing its active shareholder return policy. Of the 950 MUSD share buyback program announced for 2026, 240 MUSD have already been executed, making it possible to repurchase 1.7 million shares and reduce the number of shares in circulation by 1.1%.

“We achieved a very strong performance in the first quarter, benefiting from our diversified geographic footprint and better-than-expected demand in most regions of the world,” commented CEO Elie Maalouf.

For the 2nd quarter, IHG anticipates continued growth in booked revenue, despite the continued impact of tensions in the Middle East and some disruptions to international travel flows. The group confirmed its confidence in achieving market expectations for 2026.

The group’s resilient profile praised by analysts

Reacting to this publication, Oddo BHF confirms its “outperform” recommendation on the stock, accompanied by an unchanged price target of 158 USD. The research office believes that the group benefits from a resilient profile thanks to its exposure to the American market, which represents around 50% of its network, with a domestic clientele and a mid-range positioning considered defensive. According to Oddo BHF, the valuation remains attractive with a discount of around 15% compared to the main American players in the asset-light hotel sector. The broker also anticipates continued favorable dynamics in 2026 despite persistent tensions in the Middle East.

From son côté, Jefferies confirms its “buy” advice on the stock, with an unchanged target of 160 USD. The broker believes that this publication reinforces its positive view on the stock, despite a slowdown observed in April linked to the conflict in the Middle East and disruptions in international travel flows. The note highlights that the strength of the US market continues to offset some of the difficulties in EMEAA, while bookings point to an improvement in May and June. According to Jefferies, the group remains able to achieve consensus expectations for the 2026 financial year, supported by continued favorable dynamics of growth in the hotel portfolio and reservations.

Finally, at Bank of America (BofA), the buy rating is maintained, with a price target raised from 160 to 166 USD. The analyst speaks of a group which is now operating “at full speed”, with particularly solid operational dynamics. According to BofA, net hotel growth of 5% is now a sustainable level, supported by fewer closures and continued openings. The note also highlights that IHG displays RevPAR growth higher than that of Hilton and Marriott, an outperformance presented as the best observed for several years compared to American hotel groups.