This major hotel company is leading the pack on business travel recovery
The death of business travel demand might have been greatly overestimated during the pandemic.
Bill Gates, at one point, surmised as much as half of business travel demand was permanently killed during the early months of the pandemic. Hotel industry chatter in recent months focused on the idea it was likely 20% off pre-pandemic levels.
However, the CEOs of each of the major publicly traded hotel groups in recent weeks reported a rosy picture of business travel.
Keith Barr, the CEO of Holiday Inn and InterContinental owner IHG Hotels & Resorts, delivered one of the strongest cases for a full business travel demand recovery Tuesday. Average nightly rates for business travelers already exceed 2019 levels (and they have since March of last year). Occupancy rates for this demand sector are at 98% of 2019 levels, Barr said.
“Despite some predictions, business travel is alive and well,” he added.
For comparison: Marriott last week reported a 90% business travel recovery, while Hyatt’s business traveler performance is still 18% below 2019 levels. Hilton CEO Christopher Nassetta noted earlier this month that business travel performance at his company was 3% higher than pre-pandemic levels.
IHG’s success with business travelers might seem a little surprising since its footprint of large hotels in major U.S. business districts isn't as prominent as that of Sheraton, Westin or Hyatt Regency.
What’s driving IHG and Hilton to lead the competition? A greater focus on small- and medium-sized businesses. Workers at these kinds of companies tend to be on the road because they can’t work remotely the way those who work in fields like consulting and finance at larger companies can.
IHG’s significant presence of affordable roadside hotels also lends itself to durable lines of business travel demand from sectors like infrastructure and health care — some of the only sectors still taking part in business travel during the worst months of the pandemic.
In 2021, Nassetta indicated a plan to adjust Hilton’s business travel demand profile from 80% reliant on smaller companies to 90%. The company’s earnings call earlier this month indicated Hilton now gets about 85% of its business travel demand from small- and medium-size companies.
Marriott gets about 60% of its business travel traffic from these kinds of companies, the company’s CEO, Anthony Capuano, indicated last week.
“We’ve seen slower albeit steady recovery from larger companies, but they have got a bit of a ways to go to get back to pre-pandemic levels,” Capuano added on an investor call. He also noted larger companies are now paying higher rates than they were over the last few years.
Leaning into luxury
It might seem like a brand dance in the hotel orbit at the moment. Marriott and Hilton both have plans to add more affordable options to their respective brand families, while Hyatt leaders last week doubled down on luxury hotels.
IHG is similarly focusing on expanding into higher-end tiers of the hotel orbit.
“We have strengthened and diversified our brand portfolio by filling in white spaces through organic launches and acquisitions of brands that address clear long-term consumer trends and capitalize on notable growth opportunities,” Barr said.
Some of the company’s luxury and lifestyle brand additions in recent years include the acquisitions of Six Senses and Regent as well as the launch of the Vignette Collection.
Luxury and lifestyle hotels now account for 13% of IHG’s overall portfolio and 20% of the hotels currently in various stages of development. Six Senses has more than doubled the number of hotels in development since IHG acquired it four years ago, Barr said.
IHG also opened three new Regent hotels since acquiring it; the full opening of Regent Hong Kong later this year is one of TPG’s most-anticipated openings of 2023.
IHG isn’t forgetting its bread and butter, though: The Holiday Inn brand family still accounted for a third of new hotel deal signings last year and about half of the total openings.
Eye on the economy
A giant question mark remains over the global economy, and whether government bodies and financial institutions can achieve a soft landing while trying to rein in inflation.
While the U.S. stock market fell Tuesday afternoon amid worries interest rates are going to remain higher than expected, Barr earlier in the day remained upbeat — as many of his competitors have in recent weeks.
“There is no escaping that there are macroeconomic uncertainties, and these may impact corporate travel budgets and leisure spending at some point,” he said. “However, economists’ latest view support more of a soft landing and we shouldn't forget that. For our industry, the timing is such that we will benefit from many areas of demand still returning.”
An international travel revival — paired with China's reopening and an ongoing recovery of group and business travel — gives hotel executives reason to expect more demand will flow into their properties.
We’ve said it before, and we'll say it again: Don’t bank on downturn fears fueling any discounts at your favorite hotel anytime soon.
“While both the industry and IHG cannot be immune to economic cycles, we are confident that the current industry tailwinds outweigh the headwinds, both in number and magnitude,” Barr said.
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| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.