Everybody wants to find the best growth stocks in the market, ideally before they've revealed their full potential to the investing world. Unfortunately, that's often easier said than done. And when an industry is subject to cyclical swings tied to the broader macroeconomic picture, it can be even tougher to distinguish true opportunities from potential traps.
Like many travel stocks, InterContinental Hotels Group (IHG 0.15%) took a huge hit during the early years of the COVID-19 pandemic. Yet as pandemic-era travel restrictions lifted, InterContinental saw its business bounce back. Now, the hotel giant's business is humming along much more smoothly. After having spent the first article in this three-part series for the Voyager Portfolio talking about InterContinental and how it built its hotel empire, this next installment will look more closely at its financial performance.
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From the depths of the pandemic...
It seems like a lot longer than five years ago that people across the globe were dealing with stay-in-place orders that crushed the travel and entertainment industry. For InterContine ntal, the impact was devastating. Revenue during 2020 got cut in half compared to 2019, as most people simply stayed out of hotels entirely. It took time for the hotel company to reduce expenses, which caused operating income to disappear almost entirely during the first half of 2020.
Slowly, InterContinental was able to modify its cost structure to reflect the new reality. Even so, the moves were largely insufficient to push the company back to profitability. The company's losses amounted to $260 million in 2020. By 2021, some places had started to reopen, and that sent revenue back on an upward slope. However, expenses still piled up, and it wasn't really until the end of the year that profits managed to get back to where they had been before the pandemic.
... to a return to growth
InterContinental had firmly returned to a growth trajectory by 2022, and revenue has set new all-time records since. The company had revenue of $4.92 billion in 2024, posting a solid profit of $628 million, or $3.90 per share. The first half of 2025 has been even more profitable, with earnings hitting a new record of $469 million, or $3 per share.
InterContinental's financial results have benefited from several factors. Voracious demand for travel-related services across the industry was a clear tailwind early in the post-pandemic recovery. However, InterContinental was able to capture that momentum and build on it even after the immediate rush ended.
Also, the hotel giant has been aggressive in looking for smart acquisition candidates to further its expansion. In February 2025, InterContinental announced that it had acquired the Ruby hotel brand, paying about $116 million for the franchise. The purchase allowed InterContinental to expand its scope into a niche of the business focused on inner-city urban destinations in Europe, primarily within Germany, Austria, the U.K., and Switzerland. With a "stylish but relaxed" feel, Ruby attempts to bridge the spectrum between ultra-luxury brands and more affordable lodging options.
NYSE: IHG
Key Data Points
What's ahead for InterContinental Hotels?
InterContinental expects that both its existing hotel chains and the acquisitions that it makes should be able to support substantial future growth. That's a key part of the value proposition in its M&A decisions, as based solely on their present property footprints, InterContinental's purchase prices might seem overly generous.
But it's one thing to have the expectation of growth and quite another to have concrete plans in place to make growth happen. In the third and final article of this series for the Voyager Portfolio, you'll get a deeper appreciation of InterContinental's growth strategy and how it could support further share-price gains.
