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10 May, 2011

First Quarter Results to 31 March 2011

RevPAR growth driving significant increase in profits

Financial summary° 2011 2010 Actual % change YoY
CER2 &
excluding LDs3

° All figures are before exceptional items unless otherwise noted. See appendix 3 for analysis of financial headlines.

1 After exceptional items.
2 CER = constant exchange rates.
3 excluding $10m of significant liquidated damages receipts in 2011.
Revenue $396m $362m 9% 9% 6%
Operating profit $112m $83m 35% 35% 23%
Total adjusted EPS 24.0¢ 17.4¢ 38%    
Total basic EPS1 24.0¢ 18.8¢ 28%    
Net debt

Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC, said:

"We delivered a strong set of results in the first quarter. Global revenue per available room (RevPAR) grew 6.9%, with 18.8% growth in Greater China and 8.4% in the US, the highest growth in the US since the second quarter 2006. Underlying revenue growth of 6% was converted to 23% operating profit growth, reflecting good use of our scale and the efficiency of our business model.

"Our strategy to free up capital to drive growth for our brands is on track. Post quarter end we sold two hotels in the US, with proceeds substantially above book value. We have recently committed to enter into a joint venture with Duet Hotels to take Holiday Inn Express into India, developing 19 new hotels by 2016.

"During the quarter, we welcomed The Venetian and The Palazzo Las Vegas into our system as our first InterContinental Alliance Resorts, boosting room supply by almost 7,000 and we continue to look for further opportunities of this kind.

"We remain confident about the outlook for the rest of the year. Demand for our brands continues to strengthen with both guests and hotel owners. This is driving our performance and reinforcing our industry leading pipeline. We are well positioned to take advantage of the gathering rate momentum we now see around the world.

"My time with IHG comes to a close on 30 June and I would like to thank all the people I've worked with over the past six years. I now hand over the reins to Richard Solomons, confident that he and the excellent team we have in place will lead IHG to a bright future."


Driving Market Share

  • First quarter global RevPAR growth of 6.9%, including rate growth of 1.9%.
    • Americas 7.7%; (includes US 8.4%); EMEA 3.0%; Asia Pacific 9.9%.
  • Total system size of 652,456 rooms (4,422 hotels), up 0.1% year on year.
    • 15,153 rooms (53 hotels) added, including 6,986 rooms (2 hotels) from the first InterContinental Alliance Resorts; and 9,858 rooms (68 hotels) removed.
    • Signings of 8,399 rooms (63 hotels) were ahead of Q1 2010 and almost half were conversions. Total pipeline of 191,182 rooms (1,236 hotels) of which 26% are in Greater China.
    • 2011 net system growth will be modest as previously disclosed due to the final Holiday Inn relaunch exits.
  • Holiday Inn relaunch delivering strong results.
    • Relaunch driving continued RevPAR outperformance, with the wider benefits clear as global core brand hotel signings are up 27% year on year.

Growing Margins

  • Continued cost control.
    • Regional and central costs of $61m increased $2m on 2010 at constant currency ($4m as reported).
    • At constant currency, and reflecting the current trading outlook, full year 2011 regional and central costs still expected to be in the region of $250m to $260m compared to $258m in 2010.

Current trading update

  • April global RevPAR up 4.9%, up 6.1% excluding Bahrain, Egypt and Japan.
    • Americas 6.4%; (includes US 7.2%); EMEA 0.5%; Asia Pacific 5.3%.
  • c.$8m operating profit benefit in the rest of year from one individually significant liquidated damages receipt and cessation of depreciation on a hotel now held for sale.
  • Estimated operating profit impact in full year 2011 from events in Middle East, Japan and New Zealand of $15m to $20m.

Regional Highlights

Americas – good growth in franchise profits

RevPAR increased 7.7%, including rate growth of 1.6%. US RevPAR was up 8.4%, including rate growth of 2.0%.

Revenue increased 9% to $194m and operating profit increased 35% to $97m. After adjusting for the owned hotel disposals in 2010 and excluding the impact of a $10m liquidated damages receipt in the managed business in 2011, revenue was up 9% and operating profit up 23% primarily driven by an 11% increase in franchise royalties. A $3m decline in regional costs was due to timing of costs related to our self-insured healthcare benefit plan.

We signed 6,059 rooms (50 hotels) in the first quarter. This was almost 1,300 rooms more than the same period in 2010, driven by Holiday Inn signings, demonstrating the continuing benefits of the relaunch. 11,812 rooms (42 hotels) were opened into the system, including 6,986 rooms at the Las Vegas Sands Venetian and Palazzo InterContinental Alliance Resorts, and the 513 room Holiday Inn Toronto, the brand's biggest hotel in Canada.


EMEA – continued strength in signings

RevPAR increased 3.0%, including rate growth of 1.6%. RevPAR grew 4.2% excluding Egypt (10 hotels) and Bahrain (2 hotels) where the political unrest resulted in significant declines. In other Middle East markets RevPAR continued to grow, including 7.5% in Saudi Arabia and 2.4% in the United Arab Emirates.

Revenue increased 6% (4% at CER) to $95m and operating profit increased 10% (5% at CER) to $23m. This was driven by good RevPAR growth at both the owned and leased and franchised hotels. Managed operating profit declined $2m as the impact of unrest in the Middle East offset good growth in fees across Europe.

We signed 1,425 rooms (8 hotels) in the quarter, including Hotel Indigo Hamburg. Crowne Plaza hotels accounted for half of the region's signings as well as three of its five hotel openings in the quarter. These were in the key locations of Dubai (the third for the brand in the city), Geneva and also in Istanbul where we now have two Crowne Plaza hotels open and expect to add a further three by year end. This reinforces the strength of the brand across the EMEA region.


Asia Pacific – growth in rooms and RevPAR drives profits

RevPAR increased 9.9%, including rate growth of 4.8%. Excluding Japan (33 hotels) where the earthquake and resultant events negatively impacted March growth, RevPAR grew 13.6%. Greater China continues to be our strongest market with RevPAR up 18.8%, including rate growth of 9.9%.

Revenue increased 16% (13% at CER) to $80m and operating profit increased 39% to $25m. This was predominantly driven by RevPAR growth and the contribution from a 6% year on year increase in rooms.

We signed 915 rooms (5 hotels) in the quarter, three of which were in Thailand including an InterContinental resort on the West coast of Koh Samui and a Hotel Indigo on Phuket Naithon beach. In April we signed a further 7 deals, including three in India and three in Indonesia. Key openings included the InterContinental Kuala Lumpur and Crowne Plaza West Hanoi, the first hotels opened under those brands in Malaysia and Vietnam respectively.


Capital recycling strategy driving growth

During 2011 we have started the initial marketing for sale of the InterContinental New York Barclay. Post quarter end we completed the disposal of Staybridge Suites Denver Cherry Creek and Holiday Inn Atlanta-Gwinnett Place to Summit Hotel Properties Inc for $17m, retaining the hotels under a long term license agreement and a management agreement respectively.

In line with our strategy to recycle capital to drive growth in our brands, we entered into a joint venture partnership with Duet India Hotels Group to develop 19 new Holiday Inn Express hotels across India (c.3,300 rooms) by 2016. We will invest through a 24% equity stake, making a multi-year investment of $30 million into the partnership.


Interest, tax and net debt

The interest charge for the period was $16m (Q1 2010: $15m). Based on the position at the end of the quarter, the tax charge has been calculated using an estimated annual tax rate of 28% (Q1 2010: 27%).

Net debt was $846m at the end of the quarter (including the $207m finance lease on the InterContinental Boston). This is down from $1.1bn at 31 March 2010 but up $103m on the year end position due to seasonal working capital movements including incentive payments. This is expected to reverse for the full year 2011.


Appendix 1: RevPAR Movement Summary

  April 2011   Q1 2011  
  RevPAR Rate Occupancy RevPAR Rate Occupancy
Group 4.9% 1.1% 2.3%pts 6.9% 1.9% 2.8%pts
Americas 6.4% 1.9% 2.7%pts 7.7% 1.6% 3.3%pts
EMEA 0.5% (2.0)% 1.6%pts 3.0% 1.6% 0.8%pts
Asia Pacific 5.3% 3.4% 1.2%pts 9.9% 4.8% 2.9%pts

Appendix 2: Q1 2011 System & Pipeline Summary (rooms)

  System   Pipeline  
  Openings Removals Net Total YoY% Signings Total
Group 15,153 (9,858) 5,295 652,456 - 8,399 191,182
Americas 11,812 (6,920) 4,892 444,267 (1)% 6,059 92,425
EMEA 1,253 (1,067) 186 121,038 - 1,425 31,380
Asia Pacific 2,088 (1,871) 217 87,151 6% 915 67,377

Appendix 3: First quarter financial headlines

Three months to 31 March 2011 Total Americas EMEA Asia Pacific Central
Operating Profit $m 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
Franchised 108 95 91 81 15 12 2 2 - -
Managed 49 34 18 7 11 13 20 14 - -
Owned & leased 16 11 (1) (2) 6 5 11 8 - -
Regional costs (28) (29) (11) (14) (9) (9) (8) (6) - -
Operating profit pre central costs 145 111 97 72 23 21 25 18 - -
Central costs (33) (28) - - - - - - (33) (28)
Group Operating profit 112 83 97 72 23 21 25 18 (33) (28)

Appendix 4: Constant exchange rate (CER) operating profit movement before exceptional items

  Total*** Americas EMEA Asia Pacific
  Actual currency* CER** Actual currency* CER** Actual currency* CER** Actual currency* CER**
Growth/ (decline) 35% 35% 35% 35% 10% 5% 39% 39%
Exchange rates: GBP:USD EUR:USD
2011 0.62 0.73
2010 0.64 0.72
* US dollar actual currency
** Translated at constant 2010 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; Kari Kerr):
+44 (0) 1895 512 425
+44 (0) 7770 736 849

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 Tuesday 10th May. There will be an opportunity to ask questions.

International dial-in: +44 (0)20 7108 6370
UK Toll Free: 0808 238 6029
Passcode: 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 2941#.

International dial-in: +44 (0)20 7108 6281
UK Toll Free: 0800 376 9029

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 10th May with Richard Solomons (Chief Financial Officer and Head of Commercial Development). There will be an opportunity to ask questions.

International dial-in: +44 (0)20 7108 6370
Standard US 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 3094#.
International dial-in: +1 203 369 4724
US Toll Free: 866 851 2563


The full release and supplementary data will be available on our website from 7.00 am (London time) on 10th 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 a global company operating seven well-known 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®. IHG also manages Priority Club® Rewards, the world's first and largest hotel loyalty programme with 58 million members worldwide.

IHG is the world's largest hotel group by number of rooms and IHG franchises, leases, manages or owns, through various subsidiaries, a portfolio of over 4,400 hotels and more than 652,000 guest rooms in 100 countries and territories around the world.

IHG has more than 1,200 hotels in its development pipeline and expects to recruit around 160,000 people 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 our latest news visit, Twitter or YouTube


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 2011 PDF (0.46Mb).


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