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IHG Posts a 22% Rise in Net Income for 2010 to $444 million Compared
with $363 million in the Same Period  a Year Earlier

Global RevPAR Up 6.2% Overall;
Asia Pacific Reporting RevPAR Growth of Nearly 11%

 
February 15, 2010

Headlines

  • Operating profit is up 22% driven by global RevPAR growth of 6.2%.
  • IHG signed 319 deals in 2010 - a deal every working day - and now has the world’s largest development pipeline with an 18% share of all new hotels.
  • Asia Pacific continues its strong performance with RevPAR growth of nearly 11%.
  • In Asia Australasia, IHG opened new hotels including in key locations such as India, Vietnam, Thailand and Singapore. We are looking at creating 20,000 new jobs in the near term.
Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC, said:

“2010 was an excellent year for IHG. After a slow start to the year, the industry staged the sharpest recovery in its history, exceeding all expectations. By focusing on our brands and using our scale, we delivered 6% growth in revenue per available room (RevPAR). We signed more rooms into our pipeline than in 2009 and despite the planned exceptional number of removals to drive up quality, we grew the number of rooms in our system, led by a 12% increase in China.

“The $1bn Holiday Inn relaunch is almost complete, delivering RevPAR outperformance and improved guest satisfaction. We are now working with our hotel owners to refresh Crowne Plaza, already the fourth largest upscale hotel brand in the world, and one with great future potential.

“Our focus on efficiency has increased fee-based margins 1.1 percentage points. In line with our asset light strategy we have started the initial marketing for sale of the InterContinental New York Barclay today.

“The 21% growth in the final dividend reflects our confidence in IHG’s prospects. Our priority is to increase market share and improve margins in an industry set for strong growth over the next few years.”

Asia Pacific Regional Highlights

RevPAR increased 12.4%, with 11.5% growth in the fourth quarter.  Greater China was our strongest market with RevPAR up 25.8% for the year, including 55.9% in Shanghai which was boosted by the World Expo which took place between May and October.  Asia Australasia RevPAR grew 5.6% and at InterContinental Hong Kong RevPAR was up 15.3%.

Revenue increased 24% (20% at CER) to $303m and operating profit increased 71% (67% at CER) to $89m.  This was predominantly driven by RevPAR growth; the contribution from new managed rooms (2010: 9% growth; 2009: 10% growth) and a $4m benefit to managed operating profit due to the collection of bad debts which had previously been provided for.

We continue to build on our leading position in Greater China with 48,527 rooms (145 hotels) open (a 12% increase year on year) and 50,236 rooms (147 hotels) in the pipeline.  We opened 24 hotels in 17 cities across China, including Asia Pacific’s first Hotel Indigo on the Bund and the InterContinental at the Expo site, both in Shanghai.  In Asia Australasia, we signed six hotels in India, taking our pipeline there to 10,073 rooms. In Vietnam, we signed two new Holiday Inn resorts in the prime beachfront locations of Cam Ranh Bay and Phu Quoc, and we also signed the Crowne Plaza Lumpini Park in Bangkok which opened in December.

Driving Market Share

  • Total gross revenue* from hotels in IHG’s system of $18.7bn, up 11%.
  • 2010 global RevPAR growth of 6.2%, with 8.0% in the fourth quarter.
  • Total system size of 647,161 rooms (4,437 hotels), up 0.1% year on year.
    • 35,744 rooms (259 hotels) added, with 35,262 rooms (260 hotels) removed.
    • Signings of 55,598 rooms (319 hotels), up on 2009 levels in all regions.  Total pipeline of 204,859 rooms (1,275 hotels); half outside the Americas; 75,000 rooms currently under construction.
    • 2011 net system growth is expected to be modest as remaining Holiday Inn relaunch exits are completed.
    • Post 2011, robust pipeline should drive medium term net system growth of 3% - 5% per annum.
  • Holiday Inn relaunch is substantially complete with refreshed hotels performing strongly.
    • 3,002 hotels now operating under the new standards (91% of the estate). RevPAR growth for hotels relaunched for more than one year was c.6% points higher than non-relaunched hotels in the US and c.5% points higher globally.
  • Strong system delivery.
    • Record enrolments in Priority Club Rewards (PCR) took total membership to 56m (2009: 48m).
    • 68% of rooms revenue delivered through IHG’s Channels or by PCR members direct to hotel (2009: 68%).

Growing Margins

  • Continued focus on costs.
    • Regional and central costs broadly in line with 2009 excluding the impact of performance based incentives.
  • Sustainable efficiencies drive fee-based margins* up 1.1%pts to 35.7%.
    • At constant currency, and reflecting the current trading outlook, total 2011 regional and central costs expected to be in the region of $250m to $260m compared to $258m in 2010.

Current trading update

  • January global RevPAR up 8.4%.  Americas 8.2%; EMEA 7.0%; and Asia Pacific 10.9%.
  • $10m liquidated damages receipt in Americas managed revenue and operating profit in first quarter 2011.
  • Initial estimate of impact on 2011 from unrest in Egypt of $3m.  
     

*Please click here for the full stock exchange announcement.

*Please click here to download a photo of Crowne Plaza Bangkok Lumpini Park, one of the new hotels to join the growing IHG estate across Asia Australasia in 2010.

The full release and supplementary data will be available on our website from 7.00 am (London time) on 15 February. The web address is www.ihg.com/prelims11. To watch a video of Richard Solomons reviewing our results visit our YouTube channel at www.youtube.com/ihgplc.

InterContinental Hotels Group (IHG) [LON:IHG, NYSE:IHG (ADRs)] is the world's largest hotel group by number of rooms.  IHG franchises, leases, manages or owns, through various subsidiaries, over 4,400 hotels and more than 640,000 guest rooms in 100 countries and territories around the world.  The Group owns a portfolio of well recognised and respected hotel brands including InterContinental® Hotels & Resorts, Hotel Indigo®, Crowne Plaza® Hotels & Resorts, Holiday Inn® Hotels and Resorts, Holiday Inn Express®, Staybridge Suites® and Candlewood Suites® and also manages the world's largest hotel loyalty programme, Priority Club® Rewards with 56 million members worldwide.

IHG has almost 1,300 hotels in its development pipeline, which is expected to create 160,000 jobs worldwide over the next few years.

InterContinental Hotels Group PLC is the Group's holding company and is incorporated in Great Britain and registered in England and Wales.

IHG offers information and online reservations for all its hotel brands at www.ihg.com and information for the Priority Club Rewards programme at www.priorityclub.com. For our latest news visit www.ihg.com/media, Twitter www.twitter.com/ihgplc or YouTube www.youtube.com/ihgplc.

This announcement contains certain forward-looking statements as defined under US law (Section 21E of the Securities Exchange Act of 1934).  These forward-looking statements can be identified by the fact that they do not relate to historical or current facts.  Forward-looking statements often use words such as ‘anticipate’, ‘target’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’ or other words of similar meaning.  By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty.  There are a number of factors that could cause actual results and developments to differ materially from those expressed in or implied by, such forward-looking statements.  Factors that could affect the business and the financial results are described in ‘Risk Factors’ in the InterContinental Hotels Group PLC Annual report on Form 20-F filed with the United States Securities and Exchange Commission.

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Contact: 

Investor Relations 
Heather Wood
+44 (0) 1895 512 176
heather.wood@ihg.com
 

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Also See: InterContinental Hotels 2009 Profit Falls 34% to $363 million (230 million pounds), Sales Totaled $1.5 billion, from $1.9 billion a Year Ago; RevPAR Fell 14.7% for the Year / Brand Operating Statistic / February 2010
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