Intercontinental Hotels Group PLC (LON:IHG) opened its 400th hotel in China as it made a strong start to the year in terms of openings, but disappointed investors with lower occupancy rates.
Comparable revenue per available room (revpar) was up 0.3% against strong comparative numbers this time last year, with a 0.8% improvement in the Americas but down 0.7% in the Europe, Middle East, Asia & Africa region and flat in China.
Excluding the Middle East and South Korea, revpar improved 1%, with the UK up 2%, London up 4% and flat outside London.
Occupancy, however, was down 0.2 percentage points.
Opening roughly 12,000 rooms in the first quarter, the Holiday Inn and Crowne Plaza operator grew its net system size 5.4% to circa 843,000 rooms.
Under its capital-light franchise model, 24,000 rooms were signed in the quarter, which chief executive Keith Barr said was the highest number of signings in a dozen years, as well as the highest first quarter hotel openings in a decade.
Also highlighting outperformance of its industry segments in the US and continued market share gains in China, Barr highlighted improved guest satisfaction across the portfolio of global brands, though it could not prevent the dip in the occupancy rate.
George Salmon, equity analyst at Hargreaves Lansdown, said: “IHG may be drawing investors’ attention to the bulging pipeline, but for those new hotels to deliver people will need to want to stay in them. Unfortunately, occupancy rates are down, meaning the key revenue per available room metric is behind expectations."