(Reuters) - InterContinental Hotels Group (IHG)(IHG.L) reported only a small rise in revenue per available room in the third quarter, held back by a U.S. decline in the face of competition from online rental services, sending its shares down 5.8 percent.
IHG relies heavily on corporate demand but has been slow to adjust to the changing travel landscape as holidaymakers and business travellers increasingly opt for cheaper accommodation offered by the likes of Airbnb and HomeAway.
The group’s U.S. operations registered a 0.5 percent decline in the key hotel industry metric, with the company citing unfavourable comparison with the same period last year, when demand was boosted by three hurricanes.
IHG, which owns the Crowne-Plaza and Holiday Inn brands among others, posted a 1 percent rise in third-quarter global revenue per available room, well short of the 6 percent growth reported by French rival AccorHotels (ACCP.PA) on Thursday.
“Having been behind the wider sector in terms of new openings earlier in the cycle, the worry is that IHG is playing catch-up just as the market starts to cool,” said Hargreaves Lansdown equities analyst Nicholas Hyett.
IHG shares were down 5.8 percent at 1000 GMT, with sentiment apparently unaffected by an announcement that it would return $500 million to shareholders through a special dividend by the first-quarter of 2019.
Revenue per available room in Greater China was up 4.8 percent as new rooms openings lifted its capacity in the country to 19,000 rooms, up 70 percent from a year earlier.
As well as seeking to expand its offering for affluent Chinese customers, IHG has also undertaken a number rebranding initiatives to compete against the likes of Marriott (MAR.O) and Hilton (HLT.N), which have sprawling luxury portfolios including the Ritz-Carlton, St. Regis, Waldorf Astoria and DoubleTree.
The company said it was on course to save $125 million a year by 2020 to fund several growth initiatives. It has said savings will be made by strengthening its franchisee model, investing in automation and promoting loyalty programmes to attract wealthier customers.
Reporting by Karina Dsouza in Bengaluru; Editing by David Goodman