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UPDATE 1-Hotelier IHG's CEO to be succeeded by company insider
May 5, 2017 / 9:31 AM / 7 months ago

UPDATE 1-Hotelier IHG's CEO to be succeeded by company insider

(Adds company, investor comments, details, background)

By Esha Vaish

May 5 (Reuters) - InterContinental Hotels Group Plc said Chief Commercial Officer Keith Barr would succeed CEO Richard Solomons at the end of next month, Solomons stepping down after running the business for six years.

Solomons is bowing out on a positive note, with IHG reporting a second successive quarter of faster growth in room revenue in the first three months of the year.

Revenue per available room (RevPAR) for the company which runs hotels under brands such as Crowne Plaza, Holiday Inn and InterContinental grew 2.7 percent in the three months to the end of March. That was up from 1.5 percent a year earlier and from 1.7 percent in the fourth quarter of last year.

Barr joined IHG in 2000 and ran the company’s business in China for four years. He has been in his current role since 2013.

“The replacement Barr is sensible: he was previously head of China and is currently head of brand, loyalty and marketing: the three most important skills for IHG as an asset light hotel company,” Bernstein analysts wrote in a note.

Hotel groups worldwide are grappling with an uncertain economic outlook and competition from online rental companies such as Airbnb that have prompted some of them to merge.

IHG has reduced its ownership of hotels and instead expanded via a cheaper fee model, where it franchises and manages hotels. It has also focused on business customers to head off the challenge from the likes of Airbnb.

“Despite the uncertain economic and political environment in some markets, we remain confident in the outlook for 2017 and our ability to deliver sustainable growth into the future,” said Solomons.

IHG’s shares were 1.9 percent lower at 4,100 pence by 0915 GMT, after having risen almost 15 percent this year.

Steve Clayton, fund manager for the HL Select UK Shares fund, said the stock was being dampened by the news of “highly regarded CEO” Solomons’ departure, although IHG’s exposure to the growth markets of U.S. and China should support the stock.

“The underlying message is clear; IHG continues to grow its estate, with a pipeline offering years of visible expansion that should feed through to steadily rising income, as long as the wider economy behaves itself,” Clayton said. His fund has a 4.1 percent position in IHG. (Reporting by Esha Vaish in Bengaluru; editing by Jason Neely/Keith Weir)

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