France’s “yellow vest” movement is making itself heard from Paris to Provence, but its rallying cry is reverberating in an unexpected place: Britain.
Holiday Inn owner Intercontinental Hotels Group IHG, -0.54% IHG, +0.91% has seen a rise in company-meeting relocations across the Channel among executives fearing the protests in France.
The “gilets jaunes” protesters, who have been railing against French President Emmanuel Macron and his government, have caused chaos in cities across the country, setting fire to buildings and smashing shop fronts.
Keith Barr, chief executive of IHG, the world’s biggest hotels group, told MarketWatch that companies seeking to gather their HLT, -0.47% European employees have been dodging France.
“There has been a movement of corporate business out of France to the U.K. because of the yellow vests,” said Barr, whose company posted better-than-expected full-year operating profit Tuesday. “If you were going to hold meetings and events in Europe, it wouldn’t be in France in the fourth quarter, although I think things have settled a bit now.”
Corporate customers are key to growth at IHG, which has been reshaping its portfolio of brands at both the high end and entry level.
It needs to compete head-on with rivals such as Marriott MAR, +0.81% and Hilton, which owns the Ritz-Carlton, St. Regis, Waldorf Astoria and DoubleTree brands, as well as disrupters such as Airbnb, which offer cheaper and more varied accommodation.
Under Barr, who took the helm 18 months ago, IHG, which also owns the InterContinental, Crowne Plaza, Kimpton and Hotel Indigo chains, has created two new brands: the low-cost Avid and the more upscale Voco.
It also bought a 51% stake in Regent Hotels and last week spent $300 million on the luxury Six Senses resorts. It has a strategy of partnering with property firms to run hotels in which it does not own the actual buildings.
IHG, which already owns the Staybridge and Candlewood Suites chains, said Tuesday it will add a yet-to-be-named all-suite brand targeting midscale customers.
The group posted a 7.7% rise in 2018 operating profit to $816 million for the year ending Dec. 31, which was better than the $807 million analysts had expected.
Revenue per available room, a key industry measure that multiplies average daily room rate by occupancy, grew 2.5% over the year, slightly below the 2.7% growth seen a year earlier.
Barr said in a statement: “While there are macroeconomic and geopolitical uncertainties in some markets, we are confident in the year ahead.”
The company makes 60% of revenue from business customers, while leisure travels account for the remaining 40%.
Barr also took note of a trend toward what he called “multigenerational” holiday makers — different generations of the same families traveling together on holidays. “We are seeing a lot more grandparents, parents and children traveling together,” he said. “This is mainly because as people get older they are [remaining] more active.”
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