Highlights
- Global Q1 comparable RevPAR up 1.5%1
- Enhanced global scale: 5k rooms opened, increasing net system 2.7% YoY to 742k rooms
- Building future growth: 15k rooms signed; pipeline of 220k rooms, with ~45% under construction
Richard Solomons, Chief Executive of InterContinental Hotels Group PLC, said: “We have made a good start to the year, driving RevPAR up 1.5% against the background of weak oil markets and the earlier timing of Easter, which affected several of our markets.
We continued our focus on building and leveraging scale where it matters, signing rooms into our pipeline at the fastest rate since 2008. We also strengthened our position in the rapidly growing boutique segment, signing the first Kimpton Hotels & Restaurants property outside the Americas, in Amsterdam, and opening and signing a record number of rooms for our Hotel Indigo brand.
At the same time, we continue to evolve and enhance our leading loyalty programme, IHG Rewards Club. This week we announced that IHG Rewards Club members will be offered exclusive, preferential rates when they book through our direct channels. This new benefit further strengthens our loyalty offer by helping us build deeper relationships with our most loyal guests, whilst driving more direct bookings to our hotels.
Looking ahead, despite economic and political uncertainty in some markets, current trading trends and the momentum behind our brands give us confidence for the rest of the year.”
First Quarter RevPAR performance Group
RevPAR was up 1.5%, with rate up 1.0% and occupancy up 0.3%pts. The shift in timing of Easter into Q1 had an adverse impact across the industry, especially in the Americas and Europe, which we expect to reverse in Q2.
Americas
RevPAR was up 1.9%. In the US RevPAR was up 1.5%, with occupancy levels of almost 65% on the back of record levels of industry demand. Performance continued to be impacted by our higher concentration of rooms in oil producing markets, where RevPAR was down 10.3%, compared to 3.2% growth in the rest of the estate. Elsewhere in the region, Mexico drove double digit RevPAR growth, we saw a solid performance across Latin America & the Caribbean, and Canada declined 0.4%.
Europe
RevPAR was up 1.4%. Germany and Russia/CIS, two of our priority markets, delivered mid-single digit RevPAR growth. France was down 2.3%, with double digit growth in the provinces, outweighed by declines in Paris. Flat RevPAR in the UK reflects a solid performance in the provinces, offset by softer industry-wide trading in London, predominantly due to supply increases.
Asia, Middle East & Africa
RevPAR was down 1.1%. Performance in the region outside the Middle East was strong, with 5.0% RevPAR growth overall. Japan and India delivered double digit RevPAR growth; Australasia was up 5.9%; and Southeast Asia up 3.3% led by Vietnam, the Philippines and Thailand. In the Middle East RevPAR was down 10.4% due to the ongoing impact of low oil prices.
Greater China
RevPAR was up 2.2%. Growth of 6.2% in mainland China was led by mainland tier one cities, where RevPAR was up 8.3%. This was partially offset by the ongoing industry-wide issues in Hong Kong and Macau where there were double digit declines.
Strategic progress Strengthening our preferred brands
- The Holiday Inn Brand Family gained further momentum with over 10k room signings, our best in the first quarter for eight years.
- InterContinental New York Barclay re-opened at the end of April following the $180m refurbishment and repositioning of this flagship property.
- We signed five iconic InterContinental Hotels & Resorts properties globally, the highest first quarter number for eight years. This included the landmark Chongqing Raffles City hotel in China, taking our pipeline for the InterContinental brand in the Greater China region to 24 hotels.
- We strengthened our position as the leading player in the fast-growing boutique segment by opening and signing a record number of Hotel Indigo rooms, including signing the 160 room Hotel Indigo Tel Aviv – City Centre (our second in the city). We signed our first Kimpton Hotels & Restaurants property outside the Americas, as well as two further Kimpton Hotels in the US.
- Across our extended stay portfolio we delivered our best first quarter signings performance since 2008; we now have more than 100 Candlewood Suites and more than 100 Staybridge Suites properties in our pipeline.
Building and leveraging scale
- Net system size up 2.7% year on year to 742k rooms (5,028 hotels).
- Over 5k rooms (38 hotels) opened in the first quarter, which is historically our slowest quarter for openings.
- We removed 8k rooms (42 hotels), and expect removals to trend back to within the 2-3% range for the full year.
- 15k new rooms (111 hotels) were signed, our highest first quarter since 2008, including 11k rooms in the Americas where signings were up almost 20% on the first quarter last year, and in Greater China where room signings were up almost 10%.
- IHG’s pipeline increased to 220k rooms, with 90% in our ten priority markets and approximately 45% under construction.
- 13% share of the active industry pipeline, around three times current supply share.
Driving revenue delivery through technology and loyalty
- Following our pioneering and successful direct channel pricing trial in Europe and the Americas in 2015, on 3 May 2016 we announced the global rollout of “Your Rate by IHG Rewards Club” which provides exclusive, preferential rates to loyalty members when booking through our direct channels.
- Our next generation Guest Reservation System is on track for a phased roll-out in 2017.
Financial position and capital allocation
The financial position of the group remains robust, with an ongoing commitment to an efficient balance sheet and an investment grade credit rating.
As previously announced, on 23 May we will return $1.5bn to shareholders by way of a special dividend with share consolidation, taking the total returned to shareholders since demerger in 2003 to $12.1bn.
Foreign exchange
The strengthening of the dollar over the last year reduced group RevPAR for the quarter to a 0.7% decline when reported at actual exchange rates. A breakdown of constant currency versus 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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