Travel is recovering, there is little doubt about it.
Ryanair’s traffic was more than 10% higher year-on-year in July, Marriott has upped its guidance for the second half of the financial year and Whitbread shares are nearing their highest level since the pandemic.
So, will Intercontinental Hotels Group PLC (LSE:IHG) (IHG), the owner of Holiday Inn and Regent, be able to maintain a similar upward trajectory when it reports half-year results on Tuesday, 8 August?
Up nearly 18% in 2023, the hotel group has been consistently given a 'buy' rating this year from analysts such as Jefferies, which calls the group a “cash machine” and believes there is little chance of a slowdown in consumer markets.
Net unit growth (NUG) is expected to rise by more than 4% year-on-year, revenue per available room (RevPAR) should jump by 24% and underlying earnings could reach US$486 million for the first half, Barclays believes.
Marriot shares are up more than 38% in the year-to-date Source: Shutterstock
US rival Marriott International (NYSE:MAR) backed its mid-single-digit NUG target when it reported strong results on Tuesday.
RevPAR at the Maryland-based firm jumped by 13.5%, while adjusted EBITDA rose to US$1.2 million in the second quarter and more than 33,000 new rooms were added, a trading update revealed.
If IHG can execute its RevPAR targets for the second quarter, Barclays reckons it could result in full-year estimates being nudged slightly higher, although “nothing like the magnitude” of increases experienced by Premier Inn owner Whitbread.
Tuesday’s update will also be the first time investors hear from newly appointed chief executive officer Elie Maalouf, who replaced Keith Barr in July.
Shares in IHG are down more than 1% on Wednesday, having opened at around 5,745p.