IHG, the parent company of brands like Holiday Inn and Crowne Plaza, has seen a significant boost in profits, with operating profits rising to $665 million in the first half of the year, a 10% increase compared to the previous year. Revenue from reportable segments also increased by 7% to $1.3 billion, while global revenue per available room (RevPAR) grew by 4.1%.
Although RevPAR growth slowed from 4.4% in the first quarter to 3.5% in the second quarter due to the impact of the U.S.-Iran conflict and a travel slump in the Middle East, IHG's performance was bolstered by strong demand in the U.S., Asia Pacific, and Europe.
CEO Elie Maalouf emphasized that the results reflect a shift in consumer spending towards experiences rather than goods, particularly among the rising middle class. He noted that the U.S. market has been particularly strong, supported by high employment levels and wage growth. The World Cup also contributed to increased hotel demand in the U.S.
Despite the Middle East conflict affecting about 5% of IHG's business, the company's diversified strategy helped mitigate the impact, allowing it to maintain strong performance overall. Maalouf expressed confidence that the company's growth would continue in the second half of the year, driven by ongoing demand for experiences such as sports and entertainment