IHG’s Third-Quarter Performance: A Tale of Resilience and Growth

In the third quarter of 2025, InterContinental Hotels Group (IHG) released its performance update that paints a picture of varied trajectories across different regions and segments of the hospitality industry. While the Middle East, Europe, Asia, and Africa experience significant growth, the US and Greater China grapple with declines in key metrics. This article breaks down IHG’s performance, highlighting vital sections like business travel growth, the downturn in leisure travel, regional performances, and strategic expansion efforts.

IHG: An Overview

InterContinental Hotels Group is a global leader in the hotel industry, boasting a diverse portfolio that includes renowned brands such as Holiday Inn, Crowne Plaza, and InterContinental. With operations in over 100 countries, IHG caters to various market segments, ranging from budget-friendly travelers to luxury vacationers. The company emphasizes exceptional guest experience, innovation, and sustainability while expanding through new hotel openings and strategic acquisitions.

Growth in Business Travel

IHG’s Q3 2025 performance showcases a remarkable 4% increase in systemwide room revenue generated from business transient travel. This upswing signals a robust recovery in the business travel segment, which many anticipated would never revert to pre-pandemic levels.

IHG’s CEO, Elie Maalouf, attributes this growth to several macroeconomic factors: expanding businesses, rising GDP, and improving employment rates. Business travel demand is flourishing across regions, particularly in Europe, the Middle East, Asia, and Africa, dispelling earlier assumptions of a stagnation in this sector.

Challenges Facing Leisure and Group Travel

Contrary to the positive business travel trends, IHG faced declines in leisure and group travel during Q3 2025. Leisure travel revenue dipped by 2%, while group travel revenue fell by 4%. These declines reflect ongoing uncertainties in the travel and tourism industry, often linked to consumer behavior and economic fluctuations.

Leisure travel is heavily influenced by personal disposable income and changing travel habits. The drop in demand may also correlate with an increase in international leisure trips, diverting travelers from domestic hotel stays. Group travel, reliant on corporate events and large conferences, has yet to see a full recovery, highlighting the cautious approach many organizations are taking in resuming travel-driven events.

RevPAR and ADR Trends

Revenue per available room (RevPAR) and average daily rate (ADR) insights offer another layer to IHG’s performance analysis. IHG reported a slight global RevPAR increase of 0.1% year-on-year, reflecting a positive growth signal. However, the ADR saw a minor decline of 0.4%, slipping to $128.66.

This mixed performance highlights pressures on hotel pricing, pushing IHG to recalibrate pricing strategies to maintain occupancy while balancing revenue. The slight RevPAR increase suggests staying power in occupancy, although often at lower price points.

Regional Performance Insights

Strong Growth in EMEAA

The EMEAA (Europe, the Middle East, Asia, and Africa) region stood out with substantial growth, where RevPAR rose by 2.9% to $107.62. This robust performance is buoyed by high demand in key markets such as the UK and Southern Europe, showcasing the resilience and desirability of these destinations in the current travel landscape.

Challenges in the Americas

In contrast, the Americas faced a slight decline: RevPAR fell by 0.9% and ADR decreased by 0.5%. A key factor in this downturn is a significant 20% drop in US Government travel, traditionally a major contributor to the hotel industry’s revenue stream. This decline in occupancy rates adds another layer of challenge for IHG in this region.

Setbacks in Greater China

The situation in Greater China paints a similarly cautious picture. Here, both RevPAR and ADR faced declines of 1.8% and 2.7%, respectively. Shifts in travel preferences, including a pivot towards international leisure trips over domestic stays, are contributing to this slide. Despite a marginal occupancy rate increase of 0.6 percentage points, the drop in revenue suggests ongoing competitive pressures as the region continues to grapple with its recovery.

IHG’s Ambitious Expansion Strategy

Even amidst these challenges, IHG’s growth strategy remains bold. In Q3 2025, the company opened 33 new hotels, adding an impressive 4,200 rooms to its global portfolio—a 25% increase compared to the previous year. Furthermore, IHG signed 170 new property contracts, marking an 18% increase in new agreements.

This ambitious expansion plan is aimed at strengthening IHG’s presence in key markets, particularly within the thriving EMEAA region. The strategy not only enhances market share but diversifies the portfolio, positioning the company for long-term success.

Launching a New Premium Collection Brand

One of the key highlights from IHG’s third-quarter performance is its plan to launch a new premium collection brand. Set to debut in the coming months with a focus on the EMEAA market, this development aims to cater to the upscale and upper-upscale segments, offering premium services and amenities to affluent travelers.

Though details about the new brand are limited, it signals IHG’s commitment to broadening its brand offerings and appealing to a wider audience. This strategic move aligns with the rising demand for luxurious travel experiences, particularly in a post-pandemic world.

Outlook for 2025 and Beyond

Looking ahead, IHG remains optimistic despite the mixed results from Q3 2025. CEO Elie Maalouf signaled that the company is on track to meet its full-year profit and earnings expectations, bolstered by the resilience of business travel. However, ongoing declines in leisure and group travel present a challenge, leaving uncertainty regarding when these segments will fully rebound.

Ultimately, IHG’s ability to adapt to changing market dynamics, drive business travel demand, and strategically expand its offerings will be crucial for maintaining growth in the forthcoming years.

IHG’s recent performance illustrates a clear narrative: as a leading hotel operator, it navigates through both challenges and opportunities in an ever-evolving travel landscape. With strategic expansions and innovative brand launches in the pipeline, IHG positions itself to thrive, regardless of the uncertainties ahead.