BofA Says InterContinental Hotels Group Demand Outlook 'Resilient' Across Global Regions; Buy Rating Kept

06:10 AM EDT, 09/04/2026 (MT Newswires) -- BofA Global Research affirmed its investment opinion on InterContinental Hotels Group (IHG.L), saying the London-listed hospitality company's demand outlook is "resilient" across key international regions. "US current trading remains healthy with underlying economy strong and easier comps in 2H (4Q25 gov't shutdown effect). China government initiatives supporting consumption (incl additional holiday periods) contributed to a stronger 1Q, and the Mid-autumn festival/Golden Week calendar in 3Q should be favorable (Mid-autumn day was 6 Oct 2025 vs. 25 Sep 2026 creating a longer combined break this year). Middle East had recovered faster than expected through 2Q, supported by increased [staycations], and further recovery will depend on geopolitical [developments] and subsequent flight scheduling," analysts said Thursday after hosting IHG Chief Financial Officer Michael Glover for an investor group meeting. The research firm also noted management's reassurance that the gap between fee and revenue per available room plus net unit growth is expected to "progressively narrow" as temporary royalty discounts on new hotels phase out over the next few years. "We stay confident that IHG is becoming a structurally more profitable business while retaining significant runway for system growth. IHG continues to generate efficiencies from technology investments, AI deployment and capability centres, with savings flowing through EPS without compromising growth ambitions. Management maintained its [low single-digit] cost inflation framework and reiterated 100-150 [basis point] margin expansion represents a right balance between operational leverage and reinvestment into future growth opportunities (e.g. India) & brand development," the note said. BofA kept its buy rating and price objective of $188 on the stock.