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News releases

11 May, 2010

First Quarter Results to 31 March 2010

Financial results20102009% change% change (CER)
   TotalExcluding LDs1TotalExcluding LDs1

All figures are before exceptional items unless otherwise noted. See appendix 2 for analysis of financial headlines. Constant exchange rate comparatives shown in appendix 3.  (% CER)  = change at constant exchange rates.

1excluding $3m of significant liquidated damages (LDs) receipts in 2009.
2hotels previously accounted for as discontinued operations have been re-presented as continuing operations and the relevant comparatives restated.
3total basic EPS after exceptional items.
Operating profit2$83m$72m15%20%15%20%
Total adjusted EPS217.4¢15.5¢12%   
Total basic EPS318.8¢9.5¢98%   
Net debt

Business headlines

  • Global constant currency first quarter RevPAR growth of 0.2%, including growth of 4.1% in March.
  • Asia Pacific was the strongest region reporting RevPAR growth of 10.0%, including a 22.2% increase in Greater China.
  • 5,151 net rooms (38 hotels) added in the quarter, increasing total system size to 651,830 rooms (4,476 hotels).
  • 9,872 rooms (82 hotels) added to the system, 4,721 rooms (44 hotels) removed in line with our quality growth strategy.
  • 8,160 rooms (55 hotels) signed, taking the pipeline to 200,895 rooms (1,344 hotels).
  • Net debt of $1.1bn, down $0.2bn on the position as at 31 March 2009 and held flat on the position as at 31 December 2009.

Recent trading

  • April global constant currency RevPAR growth of 5.2%; 3.7% Americas, 5.0% EMEA and 13.0% Asia Pacific, including a 27.1% increase in Greater China.
  • 2,646 rooms (22 hotels) signed in April. 4,248 rooms (25 hotels) added to the system, 2,129 rooms (18 hotels) removed.

Update on priorities

  • Focus on efficiency. First quarter regional and central costs of $57m increased $2m on 2009 at constant exchange rates and $5m at reported rates. IHG is on track to maintain the c.$75m of sustainable savings achieved in 2009 in both regional and central costs and managed and franchised cost of sales.
  • Support hotel performance. System delivery continued to improve with 68% of rooms revenue booked through IHG’s channels or by Priority Club Rewards (PCR) members direct to hotel (Q1 2009: 66%). PCR members total over 48m.
  • Build quality distribution. 2,300 hotels are operating under the new Holiday Inn standards with 613 completed since the start of the year. IHG now has a 16% share of the global new build supply pipeline compared to 3% of existing supply. 75,000 rooms in the pipeline are under construction of which over 30,000 are expected to open in the remainder of the year. (9,872 rooms were opened in the first quarter). 2010 total room removals are still expected to be in the region of 40,000.

Commenting on the results, Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC said:

"In the quarter Global Revenue Per Available Room (RevPAR) grew for the first time in 18 months driven by improving occupancy. Asia is leading the rebound and our dominant position in China underpinned an 80% rise in Asia Pacific profits.

"Business travel is returning although at this stage mainly to the luxury end of the market which was most affected by the recession. We expect the more resilient midscale sector to benefit from this trend as the year progresses and market norms are reset. We are encouraged by the return to growth but rates remain under pressure in many markets, booking windows are short and visibility is limited.

"The financing environment remains difficult but we signed 55 deals in the quarter and are on track to open around 300 hotels this year. The Holiday Inn relaunch continues to go very well. Over two-thirds of the hotels are now operating to the new standards and last week we launched the largest advertising campaign in the history of the brand. Performance in relaunched hotels continues to meet or beat expectations.

"During the difficult last 18 months we have continued to invest in the things that make a sustainable long term difference to our business performance - strengthening our brands, increasing our scale, investing in our system, developing our people and working closely with our hotel owners. With this strengthening of our core business and the early signs of recovery in the market we are feeling confident about the outlook and our ability to grow market share."


Revenue performance

RevPAR declined 1.9% in the quarter, with growth in occupancy of 1.7 percentage points offset by a decline in rate of 4.9%. March RevPAR grew by 3.0%. In the US Holiday Inn and Holiday Inn Express outperformed their segments by 2.3 and 1.3 percentage points respectively reporting RevPAR declines of 3.5% at Holiday Inn and 3.4% at Holiday Inn Express. Revenues were broadly flat at $178m.

Operating profit performance

Operating profit increased 14% to $72m. Franchised hotels’ operating profit grew 1% to $81m driven by a royalty fee increase of 3% partly offset by a $2m reduction in initial franchising, relicensing and termination fees. In the managed business operating profit of $7m compares to a loss of $4m in 2009 which included an $11m charge for priority guarantee shortfalls. The owned and leased hotels’ operating loss of $2m (2009: $1m loss) reflects RevPAR growth of 0.8% offset by a reinstatement of depreciation on hotels classified as held for sale in the prior year period.


Revenue performance

RevPAR grew 0.5% in the quarter, driven by a 3.3 percentage point improvement in occupancy offset by a 4.9% decrease in rates. Germany and France performed best with RevPAR growth of 8.0% and 6.7% respectively. The RevPAR decline of 6.8% in the Middle East was driven by weakness in the United Arab Emirates while other parts of the region including Egypt and Saudi Arabia remain resilient. Revenues increased 3% to $90m (2% decline at CER). Excluding one liquidated damages receipt of $3m in 2009, revenues increased 7% (1% CER).

Operating profit performance

Excluding the impact of the $3m liquidated damages receipt in 2009 operating profit was flat at $21m. On this same basis franchised hotels’ operating profit declined $1m to $12m ($2m decline at CER). Managed hotels’ operating profit declined by $3m to $13m driven by a RevPAR decline of 3.8%. Owned and leased hotels’ operating profit increased from $1m to $5m driven by RevPAR growth of 13.9% and strong cost control.

Asia Pacific

Revenue performance

RevPAR grew 10.0% in the quarter, driven by a 7.7 percentage point improvement in occupancy offset by a 3.3% decline in rates. Greater China was the strongest performing region with first quarter RevPAR growth of 22.2%. Revenues increased 23% to $69m (16% CER).

Operating profit performance

Operating profit increased 80% to $18m (70% CER). Franchised hotels’ operating profit increased $1m to $2m. Managed hotels’ operating profit grew 75% to $14m (63% CER) primarily driven by 23.7% RevPAR growth across IHG’s managed operations in Greater China and 10% rooms growth across the region. Operating profit at owned and leased hotels increased 14% to $8m (14% CER) reflecting RevPAR growth of 9.9% at InterContinental Hong Kong and good cost control.

Interest and tax

The interest charge for the quarter increased $1m to $15m as the impact of lower levels of average net debt was offset by a higher average cost of debt.

Based on the position at the end of the quarter, the tax charge has been calculated using an estimated annual tax rate of 27% (Q1 2009: 24%).

Cash flow & net debt

IHG’s balance sheet has been strengthened with net debt reduced to $1.1bn (including the $205m finance lease on the InterContinental Boston) from $1.3bn as at 31 March 2009. During 2009 IHG extended the maturity and diversification of its debt profile issuing a seven year £250m bond in the fourth quarter using this to refinance $415m of the $500m term loan expiring in November 2010. In addition, IHG has a $1.6bn revolving credit facility expiring May 2013.

RevPAR Sensitivity

IHG estimates that a 1% change in global RevPAR impacts Group EBIT by $13m, split as follows: $4m owned & leased; $4m managed (of which $1m relates to the Americas managed business); and $5m franchised.

Appendix 1: Rooms

 AmericasEMEAAsia PacificTotal
Net openings3,2879509145,151

Appendix 2: First quarter financial headlines

Three months to 31 March $mTotalAmericasEMEAAsia PacificCentral
 2010 2009* 2010 2009* 201020092010200920102009
Franchised operating profit 95978180121621--
Managed operating profit34207(4)1316148--
Continuing owned and leased operating profit117(2)(1)5187--
Regional overheads(29)(27)(14)(12)(9)(9)(6)(6)--
Operating profit pre central overheads11197726321241810--
Central overheads(28)(25)------(28)(25)
Operating profit8372726321241810(28)(25)

* 2009 comparatives restated for those owned hotels previously accounted for as discontinued operations, now re-presented as continuing operations.

Appendix 3: Constant currency operating profit movement before exceptional items.

 AmericasEMEAAsia PacificTotal***
 Actual currency*Constant currency**Actual currency*Constant currency**Actual currency*Constant currency**Actual currency*Constant currency**
(Decline)/ growth14%13%(13)%(13)%80%70%15%15%
Exchange ratesGBP:USDEUR: USD
*US dollar actual currency
**Translated at constant 2009 exchange rates
***After Central Overheads

For further information, please contact:

Investor Relations
(Heather Wood; Catherine Dolton):
+44 (0) 1895 512 176
Media Affairs
(Leslie McGibbon; Emma Corcoran):
+44 (0) 1895 512 425
+44 (0) 7808 094 471

High resolution images to accompany this announcement are available for the media to download free of charge from This includes profile shots of the key executives.

UK Q&A conference call:

A conference call with Richard Solomons (Chief Financial Officer and Head of Commercial Development) will commence at 8.00 am (London time) on 11 May. There will be an opportunity to ask questions.

International dial-in: +44 (0)20 7108 6370
UK Free Call:0808 238 6029
Conference ID:HOTEL

A recording of the conference call will also be available for 7 days. To access this please dial the relevant number below and use the access number 4541.

International dial-in: +44 (0)20 7108 6295
UK Free Call:0800 376 9044

US Q&A conference call

There will also be a conference call, primarily for US investors and analysts, at 10.00am (Eastern Standard Time) on 11 May with Richard Solomons (Chief Financial Officer and Head of Commercial Development). There will be an opportunity to ask questions.

International dial-in: +1 517 345 9004
US Toll Free:866 692 5726
Conference ID:Hotel
A recording of the conference call will also be available for 7 days. To access this please dial the relevant number below and use the access number.4566
International dial-in:+1 203 369 4944
US Toll Free:877 875 7874


The full release and supplementary data will be available on our website from 7.00 am (London time) on 11 May. The web address is

To watch a video of Richard Solomons reviewing our results visit our YouTube channel at

Notes to Editors:

InterContinental Hotels Group (IHG) [LON:IHG, NYSE:IHG (ADRs)] is the world's largest hotel group by number of rooms. IHG owns, manages, leases or franchises, through various subsidiaries, over 4,400 hotels and more than 650,000 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 48 million members worldwide.

IHG has over 1,300 hotels in its development pipeline, which will 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 and information for the Priority Club Rewards programme at For the latest news from IHG, visit our online Press Office at

Cautionary note regarding forward-looking statements

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.

Download the full First Quarter Results to 31 March 2010 PDF (0.01Mb).


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