Close

Cart

Total $0.00

Checkout

Highlights

  • Global Q3 comparable RevPAR1 up 1.3%, and up 1.8% Q3 YTD
  • Enhanced global scale: 7k rooms opened in Q3, increasing net system size 3.8% YoY to 754k rooms
  • Building future growth: 19k rooms signed; highest for Q3 since 2008, taking pipeline to 230k rooms

Richard Solomons, Chief Executive of InterContinental Hotels Group PLC, said:
“We delivered a solid performance in the third quarter, leveraging our global scale to drive 3.8% net system growth and 1.3% RevPAR growth.

We remain focused on executing our commercial strategy to drive competitive advantage. This includes broadening the footprint of our global portfolio of brands, across which we drove our highest signings for eight years, including our best ever third quarter performance for Greater China.

Enhancements to IHG Rewards Club, including the roll-out of our preferential member pricing initiative, ‘Your Rate’, continue to drive excellent results. This, together with our initiatives to utilise digital innovation to enhance all stages of the guest journey, means we will continue to generate more customised and informed interactions with our guests and deliver improved returns for owners.

Looking ahead, while industry RevPAR growth has slowed, the fundamentals for the sector, and particularly for IHG, remain compelling. This, combined with our winning strategy and the strength of our cash generative business model, will enable us to drive sustainable growth into the future. Despite the uncertain environment in some markets, we remain confident in the outlook for the remainder of the year.”

Third Quarter RevPAR performance

Americas

RevPAR was up 1.9% in Q3, and 2.2% Q3 YTD. In the US RevPAR was up 1.4% in Q3, and 1.9% in the first 9 months, with occupancy levels of more than 75% driven by continued record levels of industry demand. Performance continued to be impacted by our concentration in oil producing markets, where RevPAR was down 7.3%, compared to 2.5% growth in the rest of the estate. Elsewhere in the region, Mexico delivered double digit RevPAR growth, we drove a solid performance in Latin America and the Caribbean, and Canada was up 6.7% due to strong trading in urban markets.

Europe

RevPAR was flat in Q3, and up 1.2% Q3 YTD. Germany delivered mid-single digit RevPAR growth in Q3, and Russia/CIS drove 20% growth benefiting from increased domestic travel. 2.5% RevPAR growth in the UK reflects solid trading in the provinces partially offset by flat performance in London, where industry–wide supply increases continue to have an impact. Ongoing challenging trading conditions in France, Turkey and Belgium resulted in significant RevPAR declines in those countries.

Asia, Middle East & Africa

RevPAR was down 0.1% in Q3, and down 0.2% Q3 YTD. Performance in the region outside the Middle East was strong, with 3.9% RevPAR growth in Q3 overall. India delivered RevPAR growth of 21%, Japan was flat, and Australasia and Southeast Asia were up low to mid-single digits, the latter led by Vietnam and Thailand. In the Middle East, RevPAR was down 7.7% due to the ongoing impact of low oil prices.

Greater China

RevPAR was up 0.9% in Q3, and 1.8% Q3 YTD. Q3 growth of 2.2% in mainland China continued to be led by tier one cities, where RevPAR was up nearly 6%. A low single digit RevPAR decline in Hong Kong reflects some improvement in trading, but Macau continues to be affected by industry-wide challenging conditions with RevPAR down 14%.

  • 1RevPAR growth is at constant exchange rates (CER) unless otherwise stated.

Strategic progress

Strengthening our preferred brands

  • In InterContinental Hotels & Resorts’ 70th anniversary year, we are strengthening its position as the world’s largest luxury hotel brand, signing 12 properties year to date. This is our best performance in eight years, and includes the signing of our first InterContinental hotel in the Maldives in Q3.
  • Our innovative new design solutions are driving momentum for the Holiday Inn brand family, with more than 13k room signings, our best Q3 performance since 2007.
  • We are strengthening our position in the fast-growing boutique segment, by signing our most Hotel Indigo rooms since Q3 2007, including the first Hotel Indigo in Poland. We continue to expand our Kimpton portfolio with the Gray Hotel in Chicago, the fifth opening for the brand this year.
  • The latest phase of our Crowne Plaza refresh is already driving success, with the brand voted best Upscale Hotel Brand in North America by Business Travel News, up from eighth position last year.
  • We continue to grow our extended stay footprint, with over 7k rooms added to our pipeline so far this year, our best performance in eight years.
  • Building on the appeal that the EVEN Hotels brand has in the US, where we now have five open and six pipeline hotels, we have signed a deal to develop a portfolio of EVEN hotels in Australia and New Zealand.

Building and leveraging scale

  • Net system size up 3.8% year on year to 754k rooms (5,099 hotels).
  • 7k rooms (51 hotels) opened in the quarter and 3k rooms (22 hotels) removed. During Q4 2016, consistent with historic trends we expect an increase in room openings pace, although we expect room removals to be in line with the average of the previous 3 quarters.
  • 19k rooms (128 hotels) were signed; our highest Q3 since 2008, including 6k rooms in Greater China, driving the region’s best ever third quarter and year to date signings performance.
  • IHG’s pipeline increased to 230k rooms, with 90% in our ten priority markets and approximately 45% under construction.
  • 4% share of industry room supply, 14% share of active industry room pipeline.

Driving revenue delivery through technology and loyalty

  • ‘Your Rate by IHG Rewards Club’, our preferential member pricing initiative, is helping to drive record growth in enrolments1, and a doubling in the growth rate of our direct channels2, with no negative impact on ADR2.
  • In August we signed a global partnership with Alipay, China’s leading 3rd party online payment solutions company. This will make IHG the first global hotel company to give Chinese guests the ability to pay via Alipay, available through all of our online and mobile channels, as well as across our full estate of hotels globally.
  • Our innovative cloud-based Guest Reservation System remains on track for phased roll out starting in late 2017.

Financial position and capital allocation

The financial position of the group remains robust, with an on-going commitment to an efficient balance sheet and an investment grade credit rating.

In August the group issued a £350m, 10-year bond at a 2.125% coupon rate, the lowest funding rate IHG has achieved in the Sterling bond market.

Foreign exchange

The US Dollar continued to strengthen through Q3 which reduced group RevPAR to flat (0.0%) in the quarter when reported at actual exchange rates. A breakdown of constant currency vs. actual currency RevPAR by region is set out in Appendix 2.

Currency markets continue to be volatile and we expect foreign exchange to have an impact on 2016 reported profit. If current spot exchange rates3 had existed throughout H2 2015, reported operating profit for that period would have been $9m higher.

Note that whilst the UK comprises around 5% of our group revenues, approximately 50% of our gross central overhead and 40% of Europe regional overhead are in sterling. At 30 June 2016 exchange rates, approximately 70% of our debt was denominated in sterling.

  • 1As at August 2016
  • 2Since Your Rate by IHG Rewards Club launch on May 3, 2016
  • 3As at 14 October 2016

To view full financial release and corresponding tables please click the PDF icon or visit:
https://www.ihgplc.com/en/news-and-media/news-releases/2016/2016-third-quarter-trading-update

About IHG

IHG® (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation with a broad portfolio of hotel brands, including InterContinental® Hotels & Resorts, Kimpton® Hotels & Restaurants, HUALUXE® Hotels and Resorts, Crowne Plaza® Hotels & Resorts, Hotel Indigo®, EVEN® Hotels, Holiday Inn® Hotels & Resorts, Holiday Inn Express®, Staybridge Suites® and Candlewood Suites®.

IHG franchises, leases, manages or owns more than 5,000 hotels and nearly 750,000 guest rooms in almost 100 countries, with more than 1,400 hotels in its development pipeline. IHG also manages IHG® Rewards Club, the world's first and largest hotel loyalty programme, with more than 96 million members worldwide. 

InterContinental Hotels Group PLC is the Group's holding company and is incorporated in Great Britain and registered in England and Wales. More than 350,000 people work across IHG's hotels and corporate offices globally.

Visit www.ihg.com for hotel information and reservations

Contact: Investor Relations: Heather Wood; Adam Smith; Neeral Morzaria

+44 (0)1895 512176 or +44 (0)7808 098724

Related News

Q2 2017 Financial Reports Round Up - Part 5: Marriott, IHG, Ryman, Xenia, Belmond

IHG Appoints Marvin Alballi as Director of Restaurants and Bars - India, Middle East, Africa (IMEA)

IHG and Pro-invest Group Partner for First EVEN Hotels Property in New Zealand Set to Open in 2020

Consorcio Hotelero GR5 and IHG Open New Crowne Plaza Hotel in Puebla, Mexico

Hotel Indigo Bali Seminyak Beach Opens in Indonesia with General Manager Guillaume Epinette at the Helm

IHG® Appoints David Todd as Senior Director, New Hotels-IMEA

Owned by African Sun Limited, Holiday Inn Opens in Mutare, Zimbabwe

ANA InterContinental Beppu Resort & Spa to Open in 2019 Marking Japan's First Luxury Onsen Resort

IHG to Launch New Midscale Brand With Details to Be Revealed Later This Year

IHG and Pro-invest to Bring Holiday Inn Express to the Heart of Melbourne with 2020 Opening of Holiday Inn Express Melbourne Little Collins

IHG Reports Q1 2017 Global Comparable RevPAR Increased 2.7%; Enhanced Global Scale 3.4% by Opening 7K Rooms

Richard Solomons, IHG's Chief Executive Officer to Retire and to be Succeeded by Keith Barr, Chief Commercial Officer

IHG and Graves Hospitality Reach Construction Milestone at InterContinental Hotel Coming to Minneapolis-St. Paul International Airport

IHG Signs with Grucaba SAC for New-Build Holiday Inn Property in Lima, Peru

IHG Notifies Guests of Payment Card Incident at IHG-Branded Franchise Hotel Locations in the Americas Region

IHG® Appoints Rajit Sukumaran as Chief Development Officer in AMEA

IHG Signs with VHM Hotel Management to Develop Holiday Inn Warsaw West Station in Poland

IHG Signs Eight New Holiday Inn & Holiday Inn Express Hotels to the Brand Family in Germany

IHG® Notifies Guests of Payment Card Incident at 12 Properties in the Americas

InterContinental Hotels Group Appoints Sudeep Jain as Vice President, Development, South West Asia

All News »

Please login or register to post a comment.