Coming out of the Covid-19 pandemic, there were plenty of reasons to be optimistic for the travel and hospitality industry, and IHG Hotels and Resorts believes investor interest in the sector is growing.
Speaking on a call with analysts after the release of the company’s Q4 results, chief financial officer Paul Edgecliffe-Johnson said the IHG had seen an uptick in franchise enquiries.
“Yes, we are encouraged by the signings environment. I think that our step-up in franchise applications was pleasing and really demonstrates the power of our brands. Our owners clearly want to open up more hotels because they made very good returns,” he said.
“If you think about if you're a real estate investor today, whereas previously, you might have been considering investing behind retail, behind other forms of commercial real estate, office, for example, but those are sort of off the table right now. So more and more capital is being focused into hotels. And that advantage is us. We have a very high share of the signings in the industry.”
The franchise application details released in the company’s investor presentation only cover the Americas region, but even so these have increased by 63% compared with 2020.
Globally, however IHG reported a significant acceleration in signings during Q4 at 23,700, close to levels achieved in 2019 with the strongest increase in the EMEAA region.
Edgecliffe-Johnson added: “Clearly, there is still room for it to recover back to what we were seeing in 2018 or so. That's partly about the financing environment. So once financing eases up and supply chains ease, then I think that we will see more signings come through, which will take our level of openings over time even higher.”