This year, though, it did splash a little bit of cash with the $39 million deal for Regent Hotels. And more may be coming. Maybe.
“There are still some small opportunities out in the industry, but there’s not very many, and we’re not in the business of warchesting (money for deals),” said chief financial officer Paul Edgecliffe-Johnson on an earnings call Friday after the firm’s third quarter market update.
“But you shouldn’t read it as nothing, and that we would never be able to do anything. If the right opportunity comes up at the right price, then we’d certainly have a look at it.”
CEO Keith Barr had previously said IHG was looking at “one or two” luxury deals and with Regent out of the way maybe there’s room for one more? Edgecliffe-Johnson’s comments on the size of any deal do, however, suggest there’s no IHG interest in Belmond.
IHG completed the deal for 51 percent of Regent in July and recently relaunched the brand and announced the first new hotel signing since the acquisition.
IHG reported revenue per available room (revPAR) growth of 1 percent in its third quarter. The U.S. market dragged down the global figure with revPAR dropping 0.5 percent thanks to “hurricane-related demand” in last year’s third-quarter.
RevPAR growth of 1 percent is likely to disappoint investors, especially when compared with rival AccorHotels’ increase of 5.9 percent.
IHG opened 19,000 rooms in the period, up 70 percent on the prior year, in what the company called its “best Q3 performance in 10 years.” This was mainly due to the Regent acquisition and the addition of a portfolio of properties in the UK.
“The fundamentals for our industry remain strong. We are confident in the outlook for the remainder of the year and in our ability to deliver industry-leading net rooms growth over the medium term,” CEOBarr said in the results announcement.
In both its third and first quarters IHG doesn’t include profit or revenue figures, in line with market practice in the UK.
IHG said Friday it would return $500 million to shareholders in the form of a special dividend.