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A

Adjusted

Excluding the effect of exceptional items, gain/loss on disposal of assets and any relevant tax.

Average daily rate

Room revenue divided by the number of room nights sold. Also known as average room rate.

B

Basic earnings per share

Profit available for IHG equity holders divided by the weighted average number of ordinary shares in issue during the year.

C

Capital expenditure

Cash expended on purchases of property, plant and equipment and purchases of intangible assets, associate investments and other financial assets.

Carbon Footprinting

Greenhouse gas emissions have been identified as the major cause of climate change. To minimize the scale of climate change, emissions from human activities need to be measured, reduction opportunities identified, and actions taken. The first step, measurement, is crucial and is termed the carbon footprint. Correct footprint assessments draw wide boundaries which include offsite emissions from organizations, and "cradle to grave" emissions for products. The carbon footprint is the first step. Footprint outputs provide a baseline measurement and show current impacts. Further studies can be completed to run comparative scenarios to measure potential savings, and to develop carbon management plans to reduce greenhouse gas emissions.

Carbon Off-Setting

A carbon offset is a financial instrument aimed at a reduction in greenhouse gas emissions. Carbon offsets are measured in metric tons of carbon dioxide-equivalent (CO2e). One carbon offset represents the reduction of one metric ton of carbon dioxide or its equivalent in other greenhouse gases.

There are two markets for carbon offsets. In the larger, compliance market, companies, governments, or other entities buy carbon offsets in order to comply with caps on the total amount of carbon dioxide they are allowed to emit.

In the much smaller, voluntary market, individuals, companies, or governments purchase carbon offsets to mitigate their own greenhouse gas emissions from transportation, electricity use, and other sources. For example, an individual might purchase carbon offsets to compensate for the greenhouse gas emissions caused by personal air travel. Many companies offer carbon offsets as an up-sell during the sales process so that customers can mitigate the emissions related with their product or service purchase, such as offsetting emissions related to a vacation flight, car rental, hotel stay or a consumer good, etc. Offsets are typically achieved through financial support of projects that reduce the emission of greenhouse gases in the short- or long-term. The most common project type is renewable energy, such as wind farms, biomass energy, or hydroelectric dams. Others include forestry projects like Marriott’s Amazon tree planting. These projects often fall prey to criticism because they do not actually assist in making products like vacations, cars or hotel stays more carbon efficient. This is why IHG has focused on innovation, rather than off-setting, in its CR strategy.

Cash-generating unit

A portfolio of similar assets that are subject to the same economic and commercial influences.

Climage change

Climate change is the public debate on whether man, largely through energy generation and use, is increasing Green House Gas (GHG) levels that are in turn raising the temperature of the planet. Science is in agreement that climate change is indeed impacted by mankind, but the public debate on mankind’s role does not reflect the scientific consensus. The climate change debate is in fact the most widely recognized public policy issue in the world today.

According to the science, the largest single contributor to climate change is carbon dioxide. Carbon Dioxide may be measured in grams, kilograms or tons. There are many actions which hotels can take in order to reduce current levels of Green House Gas (GHG) emissions and redesign our business to function more sustainably. The travel and tourism industry has traditionally sought to address Climate Change through carbon offsetting activities. At IHG, we are taking a different tack, one which focuses on innovation to reduce our carbon footprint, our costs and any future regulatory burden.

Comparable RevPAR

A comparison for a grouping of hotels that have traded in all months in both financial years being compared. Principally excludes new hotels, hotels closed for major refurbishment and hotels sold in either of the two years.

Contingent liability

A liability that is contingent upon the occurrence of one or more uncertain future events.

Continuing operations

Operations not classified as discontinued and including acquisitions made during the year.

Corporate Responsibility

At IHG we define Corporate Responsibility strategically – it is how IHG manages its business for both the good of society and our shareholders. It is about creating a competitive advantage while still doing the right thing. It is about how we make our money – not simply how we give it away. Done correctly, CR ought to drive and support corporate efforts to better manage costs, as well as identify new ways to create value. Corporate Responsibility is how companies respond to issues like climate change and sustainable development.

The term "corporate responsibility" is often used interchangeably with corporate social responsibility, corporate citizenship, social enterprise, sustainability, sustainable development, triple-bottom line, corporate ethics, and in some cases corporate governance.

Corporate Responsibility is interdisciplinary and it goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts, as well as their relationships in all key spheres of influence: the workplace, the marketplace, the supply chain, the community, and the public policy realm.

Currency swap

An exchange of a deposit and a borrowing, each denominated in a different currency, for an agreed period of time.

D

Derivatives

A financial instrument used to reduce risk, the price of which is derived from an underlying asset, index or rate.

Discontinued operations

Operations that have been sold and assets classified as held for sale when the results relate to a separate line of business, geographical area of operations, or where there is a coordinated plan to dispose of a separate line of business or geographical area of operations.

E

Exceptional items

Items which are disclosed separately because of their size or nature.

Extended stay hotel

A hotel designed for guests staying for periods of time longer than a few nights and tending to have a higher proportion of suites than normal hotels (eg Staybridge Suites, Candlewood Suites).

F

Franchisee

Operator who uses a brand under licence from the brand owner (eg IHG).

Franchisor

Brand owner (eg IHG) who licenses brands for use by operators.

G

Green Washing

A term used to describe the practice of disingenuously spinning products and policies as environmentally friendly. It is particularly pointed at the deceptive use of green PR or green marketing. The term green sheen has similarly been used to describe organizations that inaccurately attempt to show that they are adopting practices beneficial to the environment.

Goodwill

The difference between the consideration given for a business and the total of the fair values of the separable assets and liabilities comprising that business.

H

Hedging

The reduction of risk, normally in relation to foreign currency or interest rate movements, by making offsetting commitments.

Human Rights

Human Rights refer to the basic rights and freedoms to which all humans are entitled. These rights are defined by internal law and custom. Examples of rights and freedoms which have come to be commonly thought of as human rights include civil and political rights, such as the right to life and liberty, freedom of expression, and equality before the law. Economic, social and cultural rights, including the right to participate in culture, the right to work, and the right to education are also increasingly thought of as human rights.

Although most international law has not fully contemplated the role of companies in terms of human rights, the court of public opinion as represented by Non-Governmental Organizations (NGO’s) has been very active in attempting to hold companies accountable for their actions in this area. The extraction and apparel industries have been especially targeted, particularly in their developing world supply chains.

I

IFRS

International Financial Reporting Standards.

Interest rate swap

An agreement to exchange fixed for floating interest rate streams (or vice versa) on a notional principal.

L

LEED (Leadership in Energy and Environmental Design)

LEED is a US green building certification system, providing third-party verification that a building was designed and built using strategies aimed at improving performance across key environmental design, construction and operations metrics. LEED was developed by the U.S. Green Building Council (USGBC) to provide commercial building owners and operators a framework for identifying and implementing practical and measurable green solutions. Although there are in excess of 150 green building standards globally - and more emerging every day - LEED appears to be the most likely to emerge preeminent.

Local Economic Opportunity

Local Economic Opportunity (LEO) is a program for collaborative action among companies and other actors to expand economic opportunity in the communities in ways that generate greater incomes, options, and future opportunities. Leverage the positive economic impacts of our Hotels, such as creating jobs, providing training, cultivating inter-firm linkages, supporting local enterprise development, enabling technology transfer, improving productivity, building human capital and physical infrastructure, and making a variety of products and services available to consumers and other businesses.

Each of these impacts, in turn, triggers multiplier effects in society more broadly. Many of our hotels also play key leadership roles conducive to economic growth – by sowing the seeds of entrepreneurship and innovation, for instance, or by engaging in progressive public policy dialogue.

M

Management contract

A contract to operate a hotel on behalf of the hotel owner.

Market capitalisation

The value attributed to a listed company by multiplying its share price by the number of shares in issue.

Midscale hotel

A hotel in the three/four star category (eg Holiday Inn, Holiday Inn Express).

N

Net debt

Borrowings less cash and cash equivalents.

O

Occupancy rate

Rooms occupied by hotel guests, expressed as a percentage of rooms that are available.

Operating profit margin

Operating profit before exceptional operating items expressed as a percentage of revenue.

P

Pipeline

Hotels/rooms that will enter the Group's system at a future date. A new property only enters the pipeline once a contract has been signed and the appropriate fees paid. In rare circumstances, a hotel will not open for reasons such as the financing being withdrawn.

R

Revenue per available room (RevPAR)

Room revenue divided by the number of room nights that are available (can be mathematically derived from occupancy rate multiplied by average daily rate).

Room count

Number of rooms owned, leased, managed or franchised by IHG.

Room revenue

Revenue generated from the sale of room nights.

Royalty rate

The percentage of room revenue that a franchisee pays to the brand owner for use of the brand name.

S

Stakeholders

Whatever term one uses to describe corporate responsibility and its related trends, they all point in the same direction: throughout the industrialized world and in many developing countries there has been a sharp escalation in the roles corporations are expected to play. Companies are facing new demands to be accountable not only to shareholders, but also to stakeholders such as employees, consumers, suppliers, local communities, policymakers, and society-at-large. Stakeholders are often discussed in terms of:

  • Direct stakeholders- Consumers, employees, owners, shareholders, and regulators
  • Indirect stakeholders - NGOs, Media
Sustainable Development (Sustainability)

Since the 1980s, human sustainability has defined as the careful management of economic, social and environmental impacts to: “meet the needs of the present without compromising the ability of future generations to meet their own needs.”

In a broad sense, sustainability can be defined as the capacity to endure. It is about the potential for long-term improvements in wellbeing, which in turn depend on the wellbeing of the natural world and the responsible use of natural resources.

Sustainability has recently become a wide-ranging term that can be applied to almost every facet of life on Earth, from a local to a global scale and over various time periods. As the earth’s human population has increased, natural ecosystems have declined and changes in the balance of natural cycles have had a negative impact on both humans and other living systems.

Efforts to live more sustainably can take many forms, from reorganizing living conditions (e.g., eco-municipalities and sustainable cities), reappraising economic sectors (green building, sustainable agriculture) or work practices (sustainable architecture), using science to develop new technologies (green technologies, renewable energy), to adjustments in individual lifestyles.

Subsidiary undertaking

A company in which the Group holds an equity stake and over which it exercises control.

System size

The number of hotels/rooms owned, leased, managed or franchised by IHG.

T

Technology fees

Charges to hotels under management and franchise agreements for the use of IHG's proprietory reservation system.

Total gross revenue

Total room revenue from franchised hotels and total hotel revenue from managed, owned and leased hotels.

Total Shareholder Return (TSR)

The theoretical growth in value of a shareholding over a period, by reference to the beginning and ending share price, and assuming that gross dividends, including special dividends, are reinvested to purchase additional units of the equity.

U

Upscale hotel

A four/five star full-service hotel characterised by superior service (eg InterContinental, Crowne Plaza).

UK GAAP

United Kingdom generally accepted accounting practice.

W

Working capital

The sum of inventories, receivables and payables of a trading nature, excluding financing items such as corporate taxation.

Find out more about our brands

IHG logo

  • InterContinental Hotel & Resort logo
  • Hualuxe Hotels and Resorts logo
  • Crowne Plaza logo
  • Hotel Indigo logo
  • Even Hotels logo
  • Holiday Inn logo
  • Holiday Inn Express logo
  • Holiday Inn Resort logo
  • Holiday Inn Club Vacations logo
  • Staybridge Suites logo
  • Candlewood Suites logo
  • Priority Club logo