Today’s edition of Skift’s daily podcast looks at IHG's digital-driven boost, business traveler replacements, and Singapore Air's very good quarter.
Skift Daily Briefing Podcast
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Good morning from Skift. It’s Wednesday, February 22. Here’s what you need to know about the business of travel today.
The InterContinental Hotels Group has seen its room rates boosted by a post-pandemic surge in travel demand. The company expects those surging rates to continue thanks to its digital investments, reports Senior Hospitality Editor Sean O’Neill.
IHG’s average daily rates worldwide in the fourth quarter were 13 percent above pre-Covid levels. O’Neill writes the company believes its recent investments in technology will help maintain pricing power. IHG CEO Keith Barr said after its fourth quarter earnings call on Tuesday that it’s invested more than $300 million in technology platforms, including its guest reservation system and app. Roughly three-quarters of IHG’s revenue comes from its website, app and call centers.
IHG’s fourth quarter revenue per available room, an important industry metric, was 4 percent ahead of 2019 levels. The company also posted a nearly $830 million operating profit for all of 2022.
Next, U.S. hotel CEOs were largely thrilled by their companies’ fourth quarter results despite business travel’s inability to fully recover to pre-Covid levels. They’re bullish about group business bookings making up for the absence of traditional corporate travelers in 2023, reports Corporate Travel Editor Matthew Parsons.
Parsons cited Hiton as one hotel company confident about a boom in group bookings. Hilton has already seen the segment’s revenue per available room recover to pre-Covid levels. CEO Christopher Nassetta said during a recent earnings call that corporations have gone crazy planning events, adding that group demand has been resilient.
Persons adds hotel executives believe the large number of infrastructure projects across the U.S. will help increase business travel this year. Wyndham Hotels & Resorts CEO Geoffrey Ballotti expressed confidence that the company’s infrastructure-related revenues would continue to surge in 2023.
Finally, Singapore Airlines is riding high after posting record revenues for the fourth quarter. And the company sees bigger things on the horizon after its recent agreement with Air India, reports Edward Russell, editor of Airline Weekly, a Skift brand.
Singapore Airlines struck a deal with India-based conglomerate Tata Group to take a 25 percent stake in Air India. Russell writes that’s in exchange for Tata’s minority stake in Indian airline Vistara. Singapore Airlines has said the deal would enable the company to make inroads in the rapidly growing Indian market. Air India also recently committed to ordering at least 470 Airbus and Boeing jets earlier this month, its largest ever order.
Singapore Airlines reported its revenue increased nearly 7 percent in the fourth quarter from 2019 levels. The company also posted a roughly $565 million operating profit.
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