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99.1
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First
Quarter Trading Update 2017 dated 05 May 2017
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Highlights
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Global Q1 comparable
RevPAR1 up
2.7%
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Enhanced global scale: 7k rooms
opened, increasing net system size 3.4% YoY to 767k
rooms
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Building future growth: 14k
rooms (112 hotels) signed; pipeline of 232k
rooms
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Richard Solomons, Chief Executive of InterContinental Hotels Group
PLC, said:
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"We
have made a good start to 2017, with 3.4% net system size growth
year-on-year and 2.7% RevPAR growth driven by increases in both
rate and occupancy, and benefitting from the later timing of
Easter.
We
continued our focus on building and leveraging scale in our
priority markets, opening 49 hotels in the quarter, including our
300th for
Greater China, and signing hotels into our pipeline at the fastest
rate for the first quarter since 2008. We also strengthened
our boutique portfolio with the opening of a Hotel Indigo property
in downtown Los Angeles.
Despite
the uncertain economic and political environment in some markets,
we remain confident in the outlook for 2017 and our ability to
deliver sustainable growth into the future."
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First Quarter RevPAR performance
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Group
RevPAR
was up 2.7%, with rate up 0.8% and occupancy up 1.2% points. The
shift in timing of Easter out of Q1 had a positive impact,
especially in the Americas and Europe, which we expect to reverse
in Q2.
Americas
RevPAR
was up 2.2%, with US RevPAR up 1.9%. Performance stabilised
in oil producing markets, where RevPAR was up 1% excluding the
favourable impact of Houston hosting the Super Bowl. This is
the first quarter of oil market growth since Q4 2014 as we begin to
lap softer comparables. We remain cautious on the outlook for
oil producing markets due to ongoing high levels of forecast supply
growth. RevPAR in US non-oil markets grew 1.9%. In the
rest of the region, Mexico RevPAR grew 10%, with Canada and Latin
America both growing around 3%.
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Europe
RevPAR
was up 6.9%. In the UK, RevPAR outperformed the industry,
growing almost 8%, with rate up 5% and occupancy increasing
1.8%pts. London RevPAR grew 12%, benefitting from increased
international inbound travel, and the provinces continued to grow
mid-single digits. Germany RevPAR grew 9%, due to a
favourable trade fair calendar, which is not expected to benefit
the remainder of 2017. Russia RevPAR grew 7% driven by
increased corporate and leisure demand. Performance in markets
impacted by terror attacks in 2015 and 2016 improved, as we
annualised against weaker trading comparables. Most
noticeably in France, RevPAR grew almost 6%, driven by over 8%
growth in Paris as a result of increased leisure demand.
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Asia, Middle East & Africa
RevPAR
was up 0.1% in Q1. Outside the Middle East, RevPAR grew
4%. India RevPAR growth of 13% was driven by tourist arrivals
following the easing of visa conditions, whilst Australasia and
Southeast Asia were up low to mid-single digits. In the
Middle East, RevPAR declined 7% due to the ongoing impact of low
oil prices, high supply growth and
government austerity measures.
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Greater China
RevPAR
was up 3.8% in the quarter, with 4.3% growth in mainland China led
by growth in tier 1 and tier 2 cities. In Beijing and
Shanghai, RevPAR was up over 5%, attributable to strong corporate
and meetings demand. Hong Kong RevPAR grew 1.8%, the second
consecutive quarter of growth in the market, driven by strong
corporate and transient demand. Macau RevPAR was up over 2%,
with a continuation of tough underlying trading conditions
mitigated by the ramp up of one new hotel.
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Strategic progress
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Strengthening our preferred brands
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Expanded InterContinental Hotels & Resorts' position as the
largest luxury hotel brand, signing our first hotel in
Taiwan. We expect to open additional hotels in key cities in
2017 including Los Angeles and Singapore.
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Signed 10k rooms (80 hotels) into the Holiday Inn Brand family
pipeline, its best first quarter signings rate since 2008, and
continued to roll out our new room and public space design
solutions across the estate.
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Broadened out our boutique, luxury, and lifestyle portfolio with
the opening of two Hotel Indigo properties, including the largest
for the brand, in Los Angeles. We also opened our fifth
HUALUXE, in Zhangjiakou, China, host city for the 2022 Winter
Olympics.
Growing through targeted hotel distribution
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Net system size up 3.4% year on year to 767k rooms (5,175
hotels).
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7k rooms (49 hotels) opened in the quarter, and 7k rooms (48
hotels) removed. This was in line with our expectation for
the first quarter, typically our smallest quarter for
openings.
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14k rooms (112 hotels) were signed; our highest Q1 hotel signings
since 2008.
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Opened our 300th hotel in China and
continued to expand our China franchising solution 'Franchise Plus'
with our 1st opening, the
Holiday Inn Express Shanghai Pujiang, and our 25th signing since
launch in May 2016.
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232k pipeline rooms, up 5% year-on-year; ~ 45% under construction
and ~90% in our ten priority markets.
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Financial position and capital allocation
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The
financial position of the group remains robust, with an on-going
commitment to an efficient balance sheet and an investment grade
credit rating.
As
previously announced, on 22 May we will return $400m to
shareholders by way of a special dividend with share
consolidation. This will take the total returned to
shareholders, including from ordinary dividends, to $12.8bn since
demerger in 2003.
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Foreign exchange
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The
strengthening of the US Dollar against many major currencies
globally reduced group RevPAR to 1.2% in the quarter, when reported
at actual exchange rates. A breakdown of constant vs. actual
currency RevPAR by region is set out in Appendix 2.
1RevPAR growth is at constant
exchange rates (CER) unless otherwise stated.
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Q1 2017
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RevPAR
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Rate
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Occ.
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Group
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2.7%
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0.8%
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+1.2%pts
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Americas
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2.2%
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1.4%
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+0.5%pts
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Europe
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6.9%
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3.3%
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+2.2%pts
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AMEA
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0.1%
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(2.4)%
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+1.9%pts
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G.
China
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3.8%
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(1.5)%
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+3.0%pts
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Q1 2017
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CER
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AER
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Difference
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Group
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2.7%
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1.2%
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(1.5)%pts
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Americas
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2.2%
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2.1%
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(0.1)%pts
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Europe
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6.9%
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(0.9)%
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(7.8)%pts
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AMEA
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0.1%
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(0.1)%
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(0.2)%pts
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G.
China
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3.8%
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(0.4)%
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(4.2)%pts
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Appendix 3: Q1 system & pipeline summary (rooms)
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System
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Pipeline
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Openings
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Removals
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Net
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Total
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YoY%
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Signings
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Total
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Group
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6,847
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(7,145)
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(298)
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766,837
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3.4%
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14,424
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232,215
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Americas
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3,543
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(5,726)
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(2,183)
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485,810
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1.8%
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8,134
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102,729
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Europe
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585
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(763)
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(178)
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109,891
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3.5%
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1,836
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24,791
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AMEA
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454
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(302)
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152
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76,203
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5.3%
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1,389
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40,382
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G.
China
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2,265
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(354)
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1,911
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94,933
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10.4%
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3,065
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64,313
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Appendix 4: Definitions
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AER: Actual exchange rates used for each respective
period.
CER: Constant exchange rates.
RevPAR: Revenue per available room.
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For further information, please contact:
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Investor
Relations (Heather Wood; Neeral Morzaria; Tom Yates):
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+44
(0)1895 512176
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+44
(0)7808 098724
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Media
Relations (Yasmin Diamond; Mark Debenham):
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+44
(0)1895 512097
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+44
(0)7527 424046
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Conference call for Analysts and Shareholders:
A conference call with Richard Solomons (Chief Executive Officer)
and Paul Edgecliffe-Johnson (Chief Financial Officer) will commence
at 9.00am London time on 5 May and can be accessed on
https://www.ihgplc.com/investors/2017-first-quarter-trading-update
There will be an opportunity to ask
questions.
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International
dial-in
Standard
US dial-in
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+44 (0)
20 3059 8125
+1 7249
289 460
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Passcode
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IHG
Investor
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A
replay of the 9.00am conference call will be available following
the event - details are below:
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International
dial-in
Standard
US dial-in
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+44 (0)
121 260 4861
+1 844
2308 058
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Replay
pin
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5900478#
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US conference call and Q&A:
There
will also be a conference call, primarily for US investors and
analysts, at 9.00am New York Time on 5 May with Richard Solomons
(Chief Executive Officer) and Paul Edgecliffe-Johnson (Chief
Financial Officer). There will be an opportunity to ask
questions.
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International
dial-in
Standard
US dial-in
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+44 (0)
20 3059 8125
+1 7249
289 460
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Passcode
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IHG
Investor
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A
replay of the 9.00am US conference call will be available following
the event - details are below:
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International
dial-in
Standard
US dial-in
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+44 (0)
121 260 4861
+1 844
2308 058
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Replay
pin
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5899235#
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Website:
The full release and supplementary data will be available on our
website from 7.00am (London time) on 5 May. The web address
is www.ihgplc.com/investors/results-and-presentations
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Notes to Editors:
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,
Hotel
Indigo®,
EVEN® Hotels, HUALUXE® Hotels and
Resorts, Crowne Plaza® Hotels &
Resorts, Holiday Inn®, Holiday
Inn Express®,
Holiday Inn Club
Vacations®,
Holiday Inn
Resort®,
Staybridge Suites®
and Candlewood Suites®.
IHG franchises, leases, manages or owns nearly 5,200 hotels and
770,000 guest rooms in almost 100 countries, with nearly 1,500
hotels in its development pipeline. IHG also manages
IHG® Rewards
Club, our global loyalty
programme, which has more than 100 million enrolled
members.
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 and www.ihgrewardsclub.com for more on IHG Rewards Club. For our latest
news, visit: www.ihgplc.com/media and follow us on social media at:
www.twitter.com/ihg, www.facebook.com/ihg and www.youtube.com/ihgplc.
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Cautionary note regarding forward-looking statements:
This
announcement contains certain forward-looking statements as defined
under United States law (Section 21E of the Securities Exchange Act
of 1934) and otherwise. These forward-looking statements can
be identified by the fact that they do not relate only 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. These statements are based on assumptions and
assessments made by InterContinental Hotels Group PLC's management
in light of their experience and their perception of historical
trends, current conditions, expected future developments and other
factors they believe to be appropriate. 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. The main factors that could
affect the business and the financial results are described in the
'Risk Factors' section in the current InterContinental Hotels Group
PLC's Annual report and Form 20-F filed with the United States
Securities and Exchange Commission.
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InterContinental Hotels Group PLC
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(Registrant)
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By:
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/s/ F.
Cuttell
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Name:
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F.
CUTTELL
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Title:
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ASSISTANT
COMPANY SECRETARY
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Date:
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05 May 2017
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