IHG reported higher first-half profit because the middle class is growing. Not growing smarter. Just growing.
The hotel giant attributed demand to newly minted middle-class travelers who apparently needed a few decades and a decent credit score before they could figure out how to book a room with a bed in it. Revolutionary stuff. The company watched its U.S. numbers accelerate while Middle East disruption—you know, the kind involving actual geopolitical chaos—put a damper on travel. But don't worry. Sharon from Ohio finally has enough disposable income to stay at a Holiday Inn Express, so the quarterly numbers still went up.
This is the analysis retail traders are basing their portfolios on. A hotel company said more people stayed at hotels. Grabbed their phones. Smashed the buy button. Walked around telling their spouse they're diversifying into hospitality exposure.
IHG didn't specify which middle class they meant. Could be the American middle class, which now apparently includes anyone who owns a car that starts most of the time. Could be the global middle class, a term economists use when they need to make poverty sound aspirational. Either way, these people checked into a Hampton Inn and some analyst in Manhattan wrote it down like it was the Magna f*cking Carta.
The stock moved on this information. Traders read "growing middle class" and thought they'd discovered a paradigm shift. They discovered that IHG knows how to count heads in beds during a quarter when one entire region of the planet was actively discouraging tourism.
Congratulations to everyone who needed a corporate earnings call to confirm that hotels make money when people sleep in them.
Photo by raghul ayyasamy on Unsplash
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