IHG Reports Cost Savings for Owners After Procurement Expansion
Tuesday, August 9, 2022
Holiday Inn owner IHG on Tuesday announced a $500 million share buyback after profit more than doubles in the first half, boosted by higher room prices, strong demand for holiday travel and bounce back in business travel.
IHG Hotels & Resorts reported that as a result of its procurement solutions being expanded, smaller proprietors recently disembarked in the UK will see typical savings of 7%-15% in food costs, and 10%-15% in beverage costs this year.
Operating profit for the period to June 30 rose to $361 million, from $138 million the year before.
This is in the context of rising costs which hits hospitality proprietors hard: inflation in the food sector hit 11.5% in June, and some operators have reported increases of up to 500% in energy values.
The company, which has already begun paying final dividends, reported that second-quarter sales per available room (RevPAR) for America, its main market, were 3.5% above pre-pandemic levels.