InterContinental's Moat Upgraded to Wide From Narrow on Lasting Attraction for Owners and Travelers

We think InterContinental holds one of the industry's strongest brand intangible assets—a source of its wide moat—and forecast it will expand its room share during the next decade. Renovated and newer brands focused on the attractive midscale and extended-stay segments as well as a loyalty program of 115 million members will drive this growth. The company currently has a mid-single-digit percentage share of global hotel rooms and about a 10% share of all industry rooms under construction. We see its total room growth averaging near 4% over the next decade, above the 1%-2% supply increase we estimate for the U.S. industry.