Hotel giant credits rising middle class for profit boost despite Middle East troubles

IHG, the company behind Holiday Inn and Crowne Plaza, says a growing middle class is driving travel demand, helping it post higher profits even as the Middle East conflict weighed on results. The UK-based firm reported operating profits from reportable segments rose 10% in the first half of the year to $665 million, with revenue up 7% to $1.3 billion. Global revenue per available room grew 4.1%, though growth slowed in the second quarter as the U.S.-Iran war and regional travel slump took effect.

IHG's CEO, Elie Maalouf, told CNBC that people are spending more on experiences than goods, pointing to rising wealth and career success among the middle class. He called the U.S. a standout market due to strong employment and wage growth, and noted that the World Cup boosted U.S. hotel demand from mid-June. The Middle East makes up about 5% of IHG's business, and the company says growth in the U.S., Asia Pacific, and Europe helped offset the disruption. Shares were down nearly 1.9% after the announcement.