By Geoffrey Smith
Investing.com -- InterContinental Hotels Group (LON:IHG) stock fell in London on Tuesday after the owner of the Holiday Inn and Crowne Plaza brands failed to match the blistering pace set by rivals Marriott (NASDAQ:MAR) and Hilton (NYSE:HLT) in the second quarter.
Earnings per share rose more than fourfold to 121.7 in the first half, as the return of business and leisure travel drove revenue up 52% from a year earlier. That allowed the company to reinstate its interim dividend, at 43.9 cents a share and announced a $500 million buyback.
The results were driven largely by the recovery in North America, where revenue in the three months through June exceeded its pre-pandemic level for the first time, up 3.5% from the second quarter of 2019. IHG also said it saw strong sequential growth in Europe, although revenue still remained 10% below 2019 levels. China was the big laggard, owing to the government's dogged adherence to a policy of zero tolerance for COVID-19 that has continued to bedevil the travel sector there.
"Alongside leisure stays, the return of business and group travel demand continued to build over the period, and our hotels are seeing increased pricing power due to the strength of IHG's brands, loyalty program, and technology platform," chief executive Keith Barr said in a statement.
The stock fell 1.4% after bigger beats from Hilton and Marriott in the last couple of weeks had led market participants to expect even better.
Even though the company's operations have started generating cash again, there was little underlying progress in reducing a debt burden that swelled considerably during the last two years. A drop of $163 million in net debt so far this year has been entirely an accounting effect, as the dollar's appreciation has reduced the value of the money it borrowed from U.K. authorities when the tourism business suffered its sudden stop in 2020.