1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Capital Allocation
PREMIUM
InterContinental’s brand, the source of its narrow moat, is among the industry’s strongest. But with shares trading at 15-16 times 2023 enterprise value/EBITDA, investors are more than pricing in its competitive position, as well as a full, robust recovery in travel demand. We don’t plan a meaningful change to our $54 fair value estimate after the company reported 2020 results.
InterContinental Hotels Group operates 886,000 rooms across 16 brands addressing the midscale through luxury segments. 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 summer 2017 and closed on a 51% stake in Regent Hotels in July 2018. It acquired Six Senses in February 2019. Managed and franchised represent 99% of total rooms. As of Dec. 31, 2020, the Americas represents 58% of total rooms, with Greater China accounting for 16%; Europe, Asia, the Middle East, and Africa make up 24%.
