“People are traveling. It’s unstoppable,” InterContinental Hotel Group CEO Elie Maalouf told CNBC’s Monica Pittorelli on Monday.
InterContinental Hotels Group CEO Elie Maalouf said the pent-up travel demand that drove the global travel recovery after the COVID-19 pandemic is over.
“People started traveling in earnest by the end of 2020 as restrictions started to be lifted,” he said. “So even in China, we are really past revenge travel.”
The company’s latest quarterly report showed that travel demand remained strong as the summer travel season drew to a close.
“We think we are in a sustainable situation,” Maalouf said. “Group and conference bookings for 2024 and beyond are at an all-time high.”
“We are happy with the demand from travelers and hope that continues,” he added.
According to IHG’s third quarter trading update released on Friday, the company’s revenue per available room (‘revpar’) increased by 10.5% compared to Q3 2022 and Q3 2019. (Q3 2019) showed an increase of nearly 13%. Pandemic.
This is despite a 3% decline in sales compared to 2019 in large cities in Greater China, which are highly dependent on international tourists.
Maalouf told CNBC that the lack of “airlift” or air transport capacity to China is below 50% of pre-pandemic levels, impacting travel recovery in cities such as Beijing, Shanghai, Guangzhou and Shenzhen. He said he is giving.
“However, nationally, travel (mostly within China) has rebounded well above 2019,” he said, noting that more than 80% of IHG’s business in China is in small to medium-sized cities. He added that it is being done. .
According to the quarterly update, IHG Hotels’ occupancy rate was 72% in the third quarter, just 1% below pre-pandemic levels. However, average room rates remain well above 2019 levels, rising nearly 6% in Greater China, 15% in the Americas, and 24% in Europe, the Middle East, and Africa (EMEA) and Asia.
But Maalouf said interest rate increases are barely keeping up with inflation.
“Room rates have never really exceeded inflation in any of our markets,” he said. “I think people’s desire to travel is reflected in the fact that they are willing to pay.”
IHG opened 50 hotels (approximately 7,700 rooms) between July and September, giving the system net growth of 4.7% year-on-year, according to trading updates. This includes the company’s strategic alliance with Spanish-owned Iberostar Hotels & Resorts. .
Our Middle East regional headquarters were and remain in Dubai.
InterContinental Hotels Group CEO
The company currently operates more than 6,200 hotels worldwide, with 1,978 more in the pipeline.
“We’re seeing real growth across all of our brands, all of our businesses, and all of our geographies,” he said. But “middle class population and GDP growth are shifting further east, into Southeast Asia, Central Asia and China. That’s why we’re so focused on this region.”
Maalouf also announced that Garner, IHG’s newest brand, will be priced lower than Holiday Inn Express, the company’s largest brand with 3,131 hotels worldwide as of Sept. 30. He also mentioned the launch.
“There are about 9,000 hotels in the U.S. that we believe would be interested in participating in the system. We’re not saying 9,000 hotels will participate, but we think it’s a significant percentage.”
Maloof said the first Garner hotel in the United States will likely open by the end of the year.
The CEO disputed reports that IHG is establishing a Middle East regional headquarters in Saudi Arabia.
“Our Middle East regional headquarters is in Dubai and will remain in Dubai,” he told CNBC.
He said the company recently opened an office in Riyadh, reflecting its expansion plans in Saudi Arabia. IHG operates 40 hotels in Saudi Arabia, including InterContinental, Crowne Plaza, Holiday Inn, Staybridge Suites and Voco Hotel, and he has 36 more hotels under development.
The war between Israel and Hamas could complicate ambitious tourism goals in Saudi Arabia and the United Arab Emirates, but Maalouf said IHG had not changed its long-term plans in the region.
“It is truly heartbreaking, tragic and heartbreaking to see the loss of life, and we hope that hostilities will end as soon as possible.”
“We are monitoring the situation closely. However, we have lived in this area for generations and look forward to continuing to be involved.”