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Strong growth drives 23% increase in operating profit. IHG has the biggest share of the global hotel pipeline at 18%. In Q1, we signed 63 hotels, as compared to 55 hotels the same time last year.
RevPAR growth strongest in Asia Pacific, up 9.9%. Key openings in Asia include InterContinental Kuala Lumpur and Crowne Plaza West Hanoi, the first hotels opened under those brands in Malaysia and Vietnam respectively. Focus remains on recycling capital to drive growth in brands – IHG recently entered a joint venture partnership with Duet India Hotels Group to develop 19 new Holiday Inn Express hotels.
Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC said: “We delivered a strong set of results in the first quarter. Global revenue per available room (RevPAR) grew 6.9%, with 18.8% growth in Greater China and 8.4% in the US, the highest growth in the US since the second quarter 2006. Underlying revenue growth of 6% was converted to 23% operating profit growth, reflecting good use of our scale and the efficiency of our business model.
“Our strategy to free up capital to drive growth for our brands is on track. Post quarter end we sold two hotels in the US, with proceeds substantially above book value. We have recently committed to enter into a joint venture with Duet Hotels to take Holiday Inn Express into India, developing 19 new hotels by 2016.
“During the quarter, we welcomed The Venetian and The Palazzo Las Vegas into our system as our first InterContinental Alliance Resorts, boosting room supply by almost 7,000 and we continue to look for further opportunities of this kind.
“We remain confident about the outlook for the rest of the year. Demand for our brands continues to strengthen with both guests and hotel owners. This is driving our performance and reinforcing our industry leading pipeline. We are well positioned to take advantage of the gathering rate momentum we now see around the world.
“My time with IHG comes to a close on 30 June and I would like to thank all the people I’ve worked with over the past six years. I now hand over the reins to Richard Solomons, confident that he and the excellent team we have in place will lead IHG to a bright future.”
Asia Pacific Regional Highlights
RevPAR increased 9.9%, including rate growth of 4.8%. Excluding Japan (33 hotels) where the earthquake and resultant events negatively impacted March growth, RevPAR grew 13.6%. Greater China continues to be our strongest market with RevPAR up 18.8%, including rate growth of 9.9%.
Revenue increased 16% (13% at CER) to $80m and operating profit increased 39% to $25m. This was predominantly driven by RevPAR growth and the contribution from a 6% year on year increase in rooms.
The company signed 915 rooms (5 hotels) in the quarter, three of which were in Thailand including an InterContinental resort on the West coast of Koh Samui and a Hotel Indigo on Phuket Naithon beach. In April IHG signed a further 7 deals, including three in India and three in Indonesia. Key openings included the InterContinental Kuala Lumpur and Crowne Plaza West Hanoi, the first hotels opened under those brands in Malaysia and Vietnam respectively.
Driving Market Share
First quarter global RevPAR growth of 6.9%, including rate growth of 1.9%.
– Americas 7.7%; (includes US 8.4%); EMEA 3.0%; Asia Pacific 9.9%.
Total system size of 652,456 rooms (4,422 hotels), up 0.1% year on year.
– 15,153 rooms (53 hotels) added, including 6,986 rooms (2 hotels) from the first InterContinental Alliance Resorts; and 9,858 rooms (68 hotels) removed.
– Signings of 8,399 rooms (63 hotels) were ahead of Q1 2010 and almost half were conversions. Total pipeline of 191,182 rooms (1,236 hotels) of which 26% are in Greater China.
– 2011 net system growth will be modest as previously disclosed due to the final Holiday Inn relaunch exits.
Holiday Inn relaunch delivering strong results
– Relaunch driving continued RevPAR outperformance, with the wider benefits clear as global core brand hotel signings are up 27% year on year.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
