IHG Beats Forecasts as US Travelers Lift Hotel Room Revenue

Hotel group IHG, owner of Holiday Inn and Crowne Plaza, reported on Thursday that third-quarter hotel room revenue grew faster than analysts expected, helped by resilient American travelers at home and abroad. The company said revenue per available room, an industry gauge known as RevPAR, rose 5.3% in the quarter, above the 4.4% growth anticipated in a company-compiled consensus.

US Demand Sets the Pace

The strongest performance came from the Americas, where RevPAR increased 6.8% year over year. In the United States alone, RevPAR climbed 6.9%, and occupancy reached 73.9%, the highest level since 2017, according to remarks by Chief Financial Officer Michael Glover on an earnings call. Glover attributed the result to the breadth of the US economy. Chief Executive Elie Maalouf said performance was strong across every brand, every demand driver and every location type.

Group room revenue in the Americas rose 12% year over year, leisure revenue gained 7% and business revenue grew 6%. The closing stretch of the World Cup added about 40 basis points to US RevPAR growth in the quarter. Public holiday and event timing also gave a marginal lift.

Gulf and China Weigh on the Outlook

Growth was uneven across regions. IHG said weakness in China and the Gulf countries tempered the overall picture, even as high airfares, conflict, civil unrest and elevated borrowing costs clouded the wider tourism outlook. RevPAR in the Middle East was flat after a 19% decline in the previous quarter. Strong demand in Egypt and Turkey offset a 12% fall in the Gulf Cooperation Council region.

Shares in the hotel group slipped about 1% after the results. Investors focused on its exposure to Saudi Arabia and the wider Gulf, where attacks on Saudi airports have added to travel concerns. Analysts estimate Saudi Arabia accounts for roughly 4% to 5% of IHG's hotel development pipeline. Maalouf said projects there could be delayed but that he was not aware of any cancellations. He added that the Middle East would return quickly to growth once the conflict that began with US-Israeli airstrikes at the end of February ends.

The company also forecast a $40 million to $60 million increase in 2027 interest costs, which analysts said could pressure earnings estimates. Maalouf said he was confident about the fourth quarter. In France, he said civil unrest would pass and the country would remain a leading tourism destination. He noted that many US customers drive to IHG hotels rather than fly, which cushions them from higher airfares.

What It Means for Hotel Workers

For people working in hotels, the figures point to steady demand for front desk, housekeeping, food and beverage and revenue management staff at properties serving domestic and regional guests. Strong occupancy in the US supports staffing levels at city and suburban hotels, while softness in the Gulf and China may slow hiring and project openings in those markets. Hotel room revenue trends are closely watched by operators because they influence staffing budgets and investment in refurbishment.

On development, IHG opened 12,900 rooms across 92 hotels in the quarter, lifting its global system to 7,186 properties. Maalouf said he expects another year of record development activity, with 2026 poised to be the fifth consecutive year of accelerating net system growth. Development is split evenly between new builds and conversions, with conversions moving more quickly through the pipeline, he said. The company's conversion-focused brands, including voco, Vignette and Garner, are gaining traction.

Investors and analysts will now watch whether US demand holds through the fourth quarter, how quickly Gulf travel recovers from regional conflict, and whether rising interest costs affect IHG's development plans in Saudi Arabia and beyond. The company said it remains confident of meeting market expectations for the full year.