Middle East worries, interest costs take shine off IHG Q3 beat
IHG•IHG’s third-quarter RevPAR rose 5.3%, beating the 4.4% forecast, but the hotel group said 2027 adjusted interest expenses could increase by $40 million to $60 million. Its shares fell 3.2%.
1. Quarterly room revenue
IHG reported third-quarter revenue per available room growth of 5.3%, above the 4.4% company-compiled consensus, and said it remained confident of meeting market expectations this year. U.S. RevPAR rose 6.9%, mainly on group bookings, while China’s fell 3.3% because of adverse weather and the timing of public holidays.
2. Interest and regional concerns
IHG’s preliminary view is that adjusted interest expenses in 2027 will rise by $40 million to $60 million from the $230 million to $240 million expected this year. Middle East RevPAR was flat after a 19% decline in the previous quarter; strong demand in Egypt and Turkey offset a 12% fall in the Gulf Cooperation Council region amid the Iran war. Saudi Arabia represents about 4% to 5% of IHG’s hotel development pipeline, JPMorgan analysts said.
