Analyst Note
| Dan Wasiolek |We have increased our fair value estimate for InterContinental to $67/GBX 4,890 per share from $64/GBX 4,400 to incorporate our view that increased worker flexibility will lead to higher long-term travel demand. This harmonizes with changes we began instituting across our accommodation travel coverage since InterContinental reported its third-quarter sales update. We developed our positive stance because higher-income occupations (like those in technology, finance, legal, and architecture) are in industries that are the most likely to support sustainably working from remote locations. As with peers, the adjustment is reflected in InterContinental’s revenue per available room, with the metric now averaging between 3.5%-4% growth during 2024-30 (after the full recovery to 2019 levels by 2023) versus about a 3% increase prior.