Wide-moat InterContinental Hotels Group’s first-quarter sales and development update broadly tracked toward our 2024 consolidated forecast. Thus, we don’t expect much change to our $96/GBX 7,550 fair value estimate, leaving the shares appropriately valued.
InterContinental's current mid-single-digit share of hotel industry rooms is set to increase as the company controls more than 10% of the rooms in the global hotel industry under-construction pipeline.
Bears
Independent hotels and vacation rentals present a competitive threat, and the advancement of technology and its use by next-generation travelers increases the access and awareness of these properties.
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InterContinental Hotels Group operates 946,000 rooms across 19 brands addressing the midscale through luxury segments, as of Dec. 31, 2023. Holiday Inn and Holiday Inn Express constitute the largest brand, while Hotel Indigo, Even, Hualuxe, Kimpton, and Voco are newer lifestyle brands experiencing strong demand. The company launched a midscale brand, Avid, in 2017 and closed on a 51% stake in Regent Hotels in 2018. It acquired Six Senses in 2019 and launched another midscale brand, Garner, in 2023. Managed and franchised represent 99% of total rooms. As of Dec. 31, 2023, the Americas represented 55% of total rooms, with Greater China accounting for 19% and Europe, Asia, the Middle East, and Africa making up 26%.