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InterContinental Hotels Group PLC ADR - Stock Quote IHG

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Morningstar's InterContinental Hotels Group PLC ADR Stock Analysis

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InterContinental’s Demand Broadening Out to Business From Leisure; Shares Slightly Undervalued

Dan Wasiolek Senior Equity Analyst

Analyst Note

| Dan Wasiolek |

We do not plan to materially change our $67 fair value estimate for narrow-moat InterContinental, after the company reported first-quarter sales and unit growth that tracks toward our full-year estimates. Revenue per available room, or revPAR, reached 82% of 2019 levels in the quarter, about equal to 83% last quarter. Encouragingly, demand was led by room rates that are now back to prepandemic levels, indicating the brand has pricing power, and the month of March saw revPAR reach 88% of 2019 levels. Looking forward, InterContinental provided qualitative commentary that the summer outlook for leisure remains strong, with business and group activity returning at rates already around 2019 marks. We expect to maintain our 2022 revPAR estimate of 89% of 2019's level, which implies around 91% recovery on average during the last eight months of the year.

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InterContinental Hotels Group PLC ADR's Company Profile

Business Description

InterContinental Hotels Group operates 884,000 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, 2021, the Americas represents 57% of total rooms, with Greater China accounting for 18%; Europe, Asia, the Middle East, and Africa make up 25%.

Broadwater Park
Denham, Buckinghamshire, UB9 5HR, United Kingdom
T +44 1895512000
Sector Consumer Cyclical
Industry Lodging
Most Recent Earnings Dec 31, 2012
Fiscal Year End Dec 31, 2022
Stock Type
Employees 11,326

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