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IHG points to London hotel supply increase amid slowing market

06 May 2016 by
IHG points to London hotel supply increase amid slowing market

Revpar at hotel giant InterContinental Hotels Group (IHG) was flat in the UK for the first quarter of 2016, the company announced today.

The company, which owns brands including the Holiday Inn, Crowne Plaza, Hotel Indigo and Kimpton, said a strong performance in the provinces had been offset by "softer industry-wide trading" in London, which it said was "predominantly due to supply increases".

Overall, the group saw global comparable revpar up 1.5% during the first quarter, in a period during which it opened 5,000 rooms, increasing its total global estate to 742,000 rooms.

The company has hotels comprising 15,000 more rooms signed and a pipeline of 220,000 rooms.

Overall, group rate was up 1% and occupancy was up by 0.3 percentage points.

In the Americas, revpar was up 1.9% with revpar in the US up 1.5% and occupancy levels of almost 65% on the back of "record levels of industry demand".

In Europe, revpar was up 1.4%, with single-digit growth in Germany and Russia, but a 2.3% drop in France, where gains in the provinces were outweighed by falls in Paris.

In Asia, the Middle East and Africa, revpar was down 1.1%, pulled down by a 10.4% drop in the Middle East, which suffered the impact of low oil prices. And in greater China, revpar was up by 2.2%.

Chief executive Richard Solomons said: "We have made a good start to the year, driving revpar up 1.5% against the background of weak oil markets and the earlier timing of Easter, which affected several of our markets.

"We continued our focus on building and leveraging scale where it matters, signing rooms into our pipeline at the fastest rate since 2008. We also strengthened our position in the rapidly growing boutique segment, signing the first Kimpton Hotels & Restaurants property outside the Americas, in Amsterdam, and opening and signing a record number of rooms for our Hotel Indigo brand."

This week the company has also unveiled a move that it hopes will encourage more customers to book through direct channels, rather than through OTAs, with the announcement that IHG Rewards Club members will be offered "exclusive, preferential rates" when they book directly with the company.

"This new benefit further strengthens our loyalty offer by helping us build deeper relationships with our most loyal guests, while driving more direct bookings to our hotels," Solomons said.

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