Like competitors Marriott, Starwood and Hyatt, IHG credited a return in corporate travel volume for its rate and revenue increases. IHG CFO Richard Solomons said in a conference call that its year-to-date corporate transient room nights in the United States are up 18 percent from 2009 levels, and its group room nights are up 11 percent. Across the company’s top 25 accounts, room nights have increased about 30 percent year to date, he said.
While Solomons said it’s too early to tell where current corporate rate negotiations will land, he said IHG is aggressively pushing dynamic pricing models to corporate buyers.
“By the end of this year, we expect to have 20 percent on that,” Solomons said, “and we’ll push more for that next year.”
Profit for the quarter decreased 7 percent to $115 million and was hit by a $35 million increase in costs, including $25 million in staff payments and incentives, the company reported.
Rates increased by 0.8 percent in the Americas, and Solomons said rates were up in half of the markets in the United States. By comparison, only 10 percent of U.S. markets had year-over-year rate increases during the first quarter. Higher occupancies drove revenue per available room in the region by 6.7 percent.
In Europe, the Middle East and Africa, rate increased by 3.1 percent and RevPAR increased 9.7 percent. In Germany, RevPAR was up 22.2 percent.
Rate increased the most in the Asia/Pacific region, up 4.1 percent, contributing to a 12 percent increase in RevPAR. China had the highest RevPAR growth, up 24.4 percent compared with last year.