InterContinental Hotels Group (IHG) reported mixed first-quarter results Thursday, with global room revenue up over 3% but signs of weakening demand in some key markets.

U.S. bookings flattened in recent weeks while those in China fell for the second straight quarter. London bookings were flat year-over-year.

Marriott and Hilton recently trimmed their forecasts, but IHG said it still expected to meet its $1.25 billion profit target – it cited cost discipline and new revenue streams from credit card partnerships.

Here’s everything we learned from IHG’s earnings report:

1)Momentum is fading in the U.S.: Revenue per available room (RevPAR) rose 3.5% in the Americas, but performance weakened as the quarter progressed.

“When we take the last 8 weeks in aggregate, RevPAR has been broadly flat,” said CFO Michael Glover.

2)Reduced government travel was a factor: CEO Elie Maalouf said this line of business represents less than 5% of revenues and dropped to 3.5% in the quarter. He added that this impact is expected to persist.

3) Summer travel could lift results: “We already see on-the-books revenue ahead of last year for July and August,” Glover said.

4) China drag continues: Greater China’s RevPAR declined 3.5% for the second consecutive quarter. “Travel has been occurring in the same volumes as the prior year, which is reflected in the occupancy holding up, though the rate is down year-on-year,” Glover said. Performance in Tier 2-4 cities dropped 5.7%.

5) Maalouf’s upbeat take: “Things are steadying up in China.”

“The latest results we got for the May holiday, Labor Day holiday, were record travel, over 6% increase in travel from last year, over 8% increase in travel spending.”

6)EMEAA up: RevPAR rose 5% in the EMEAA [Europe, Middle East, Africa, and Asia] region. East Asia and the Pacific led at 6.8%, followed by the Middle East (6.2%) and Continental Europe (5.6%).

7) Maalouf linked part of that growth to Chinese travelers: “The higher-end traveler mostly left China, and so that took some rate off, but demand was good.” He added, “China to Asia Pacific is again up double-digit from last year, and inbound into Europe from Asia is up again."

8) Performance in the U.K. lagged: “London within that was a small negative,” Glover said. “Outside of London, we were slightly positive.” He noted that London's decline was primarily driven by a difference in the number of major events held in the first quarter compared to the previous year.

9) Development surges, led by conversions and Ruby Hotels: IHG opened 14,600 rooms globally in Q1, more than double the same period last year, and signed 25,800 rooms across 158 hotels, including over 5,000 from its Ruby Hotels acquisition in February.

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“This level of signings was also well ahead of last year and led to a closing pipeline of 334,000 rooms [2,265 hotels], which is 9% more than a year ago,” Maalouf said.

10) Nearly 40% of signings were conversions: “It was 30% higher in the U.S., in the Americas. It was double China... we're optimistic about good growth signings and openings in the Middle East for the rest of the year,” Maalouf said.

The expansion of conversion-friendly brands like Voco, Vignette, and Garner continues to be a key part of IHG's development strategy, as Maalouf outlined earlier this year.

11) A new U.S. co-branded credit card and increased loyalty point sales are key to that outlook: “The incremental profit on the loyalty point sales and from the new U.S. co-brand credit card agreements should add around 130 basis points to our fee margin expansion,” Glover said.

He also noted cost discipline: “We grew fee revenue by 6% last year with overhead costs only growing at 1%.”

Maalouf said pricing remained steady and that IHG hadn’t seen a shift in consumer behavior. “We’re not seeing any price resistance. Occupancy continues to be good.”

He said IHG’s portfolio mix makes it resilient in a choppy economy: "The upper luxury segment is pretty resilient due to the insensitivity or lack of sensitivity of people to that wealth bracket, and our mid-scale segment is resilient because of essential travel."

IHG CEO Elie Maalouf will appear onstage at Skift Global Forum in September in New York City.

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