Holiday Inn-owner IHG's shares drop as finance chief checks out

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[1/2] A general view of an Intercontinental Hotel at the O2 ahead of Q3 2020 InterContinental Hotels Group PLC Trading Statement Release, in London, Britain October 20, 2020. REUTERS/Matthew Childs

  • CFO to step down and join Flutter Entertainment
  • Q3 group RevPAR surpasses 2019 levels
  • IHG shares down 3.7%

Oct 21 (Reuters) - Holiday Inn owner IHG's (IHG.L) finance chief Paul Edgecliffe-Johnson is leaving to join bookmaker Flutter Entertainment (FLTRF.L), the hotel group said on Friday, disappointing investors who had praised his performance during the pandemic.

Shares in IHG fell 3.7% by 0755 GMT, with analysts at Citi calling Edgecliffe-Johnson's departure after eight years as CFO "disappointing".

Edgecliffe-Johnson, 50, who has been with IHG for almost two decades and led the group through the worst of the pandemic, will join Flutter Entertainment in early 2023.

Flutter's London-listed shares were up marginally.

News of his exit overshadowed IHG's third quarter results, which showed group room revenue (RevPAR) in July-September exceeded pre-pandemic levels for the first time, jumping 28% from a year early and came in 2.7% higher than the same period in 2019.

IHG, which also owns Crowne Plaza, Regent and Hualuxe, said occupancy levels remained below 2019 levels in the quarter, but the average daily rate was up 11% versus 2019.

Hotel operators are benefiting as people spend more on travel and book longer hotel stays, lifting occupancy rates and prices, although they are facing risks from stubborn inflation and a cost-of-living crisis that cast a cloud over winter demand.

"The industry is experiencing lower levels of new hotel opening activity, and with a particular impact from the restrictions in China," Chief Executive Keith Barr said in a statement.

RevPAR in the third quarter in China was down 20% from 2019 levels, while the UK was up 7% in the same period and Americas, its largest regions, was up 6.8%.

London's Heathrow airport warned of a possible slowdown in travel demand this winter, while major airlines said demand for travel was holding up.

Hotel prices will keep increasing in 2023 in most of the key cities for business events worldwide, though at a slower pace due to a worsening economic outlook, American Express Global Business Travel said earlier this month.

Reporting by Radhika Anilkumar in Bengaluru; additional reporting by Amna Karimi; Editing by Sherry Jacob-Phillips and Susan Fenton

Our Standards: The Thomson Reuters Trust Principles.

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