The number of hotel rooms in the U.S. is increasing at a historically low level of less than 1% a year. In the last 25 years, industry revPAR has never decreased when supply growth was less than 1%.
The lodging industry is enjoying a solid recovery--with domestic revPAR up by more than 20% since the last recession.
The company is the leader in the China branded midscale and upscale hotel markets, and strong growth in the region should enable the company to sustain solid long-term growth. Read more
The lodging industry, while currently in recovery, remains highly cyclical, and there is risk of a decline in revenue and the company's share price in the event of another recession.
The recovery in the lodging industry is already priced into InterContinental's share price, after a more than threefold increase in the stock price since early 2009, and investors are smart to wait for a better entry point.
While InterContinental has been continually divesting real estate, owned properties, which are more sensitive to an economic downturn, still generate more than 30% of operating income. Read more
Richard Solomon became CEO in 2011 after previously serving as CFO of the company. David Webster, who was a cofounder of European grocer Safeway PLC, is nonexecutive chairman of the board. We like that the CEO and chairman roles are split so as to ensure Read more
InterContinental is the largest franchiser, manager, and owner of hotels in the world, as measured by total rooms, with more than 4,500 hotels in more than 100 countries Read more