Share price


+24.00p / +0.73% / View details

Half Year Results to 30 June 2010

Financial results 2010 2009 % change % change (CER)
Total Excluding
Total Excluding
Revenue $772m $726m 6% 7% 6% 6%
Operating profit $219m $179m 22% 24% 23% 25%
Total adjusted EPS 47.0¢ 41.5¢ 13%      
Total basic EPS2 49.1¢ (10.2)¢ n/m      
Interim dividend per share 12.8¢ 12.2¢ 5%      
Net debt $1,019m $1,328m        
All figures are before exceptional items unless otherwise noted.  See appendices 2 and 3 for analysis of financial headlines.
Constant exchange rate comparatives shown in appendix 4.  (% CER)  = change in constant currency.
1 - excluding $3m of significant liquidated damages (LDs) receipts in the first half 2009.
2 - total basic EPS after exceptional items.  n/m = not meaningful


  • Total gross revenue³ from all hotels in IHG’s system of $8.9bn, up 9% at constant currency.
  • Global constant currency first half RevPAR growth of 3.9% driven by occupancy.
  • Global constant currency second quarter RevPAR growth of 7.4%, including a rate decline of 0.5%.
  • 19,003 rooms (148 hotels) added, 9,982 (65 hotels) on a net basis. Total system of 656,661 rooms (4,503 hotels), up 4%.
  • 19,126 rooms (130 hotels) signed, taking the pipeline to 197,431 rooms (1,302 hotels).
  • Interim dividend up 5% to 12.8¢, equivalent to 8.0p at the closing exchange rate on 6 August 2010.
  • InterContinental Buckhead, Atlanta sold on 1 July for $105m, in line with strategy to reduce capital intensity.
- See appendix 5 for definition

Recent trading

  • July global constant currency RevPAR of 8.1%; 6.4% Americas, 10.0% EMEA and 15.0% Asia Pacific.

Business Update

  • Powerful and distinct brands: The $1 billion relaunch of Holiday Inn remains on track. 2,585 hotels are now operating under the new Holiday Inn standards, 76% of the total estate. Relaunched hotels are performing at the top end of our expected range.

    We continue to drive up the overall quality of the estate with 75,000 new rooms under construction of which c.140 hotels (21,000 rooms) are expected to open in the remainder of this year. 9,021 rooms (83 hotels) were removed from the system in the first half. Total room removals are still expected to be in the region of 40,000 in 2010.
  • Leadership position in Greater China: with 132 hotels open and 148 in our development pipeline we continue to build our leading position in the region. Over 50% of our pipeline comprises our upscale brands, illustrating the potential speed of revenue growth from this rapidly expanding market.
  • System delivery: this continued to improve with 68% of rooms revenue booked through IHG’s channels or by Priority Club Rewards members direct to hotel (2009: 66%). Priority Club Rewards members now total almost 52m (2009: 44m).
  • Focus on efficiency: First half regional and central costs of $108m increased $9m at constant exchange rates ($12m at reported rates) due to higher performance based short term incentive costs. IHG is on track to maintain the c. $75m of sustainable savings achieved in 2009 across regional and central costs and managed and franchised cost of sales.

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

"Trading strengthened as the first half progressed with global Revenue per Available Room (RevPAR) up 3.9% overall and 7.4% in the second quarter. Asia is leading the recovery with Greater China reporting RevPAR up 29.4% in the half. As anticipated, occupancy drove RevPAR increases, with business travellers returning in greater numbers. Rates are now stabilising across the world, with most markets seeing rate growth towards the end of the first half. The economic environment does remain uncertain, however, with short booking windows and limited visibility.

"During the downturn we worked closely with our owners to reduce costs, drive revenue and build the strength of our system and brands. In the first half we signed 130 hotels and opened 148, despite the tough financing environment. The quality of these new hotels is exceptionally high, particularly in China where both our pipeline and system of open hotels are skewed towards more upscale developments. We have now completed the relaunch of nearly 2,600 Holiday Inn hotels worldwide out of a total of 3,400, and the performance of these hotels continues to meet or beat our expectations.

"These efforts put us in great shape to increase share in what is now a rising market. Having maintained the dividend through the recession and balancing the improvement in trading with the continued economic uncertainty, the Board is announcing an increase in the dividend of 5%."


Revenue performance

RevPAR increased 2.2% in the first half, with second quarter growth of 5.8%. In the US, Holiday Inn and Holiday Inn Express outperformed their segments by 1.4 and 0.4 percentage points respectively, reporting RevPAR growth of 0.1% at Holiday Inn (including 3.2% for Q2) and 0.4% at Holiday Inn Express (including 3.6% for Q2). Revenues increased 5% to $393m.

Operating profit performance

Operating profit increased 20% from $149m to $179m. Franchised hotels’ operating profit grew 6% driven by a royalty fee revenue increase of 8%. In the managed business, operating profit of $13m compares to a loss of $9m in 2009 which included a $19m charge for priority guarantee shortfalls. Owned and leased hotels’ operating profit of $4m was flat on 2009 reflecting RevPAR growth of 5.9% offset by a $3m reinstatement of depreciation on hotels classified as held for sale in the first half of 2009.


Revenue performance

RevPAR increased 4.0% in the first half, with second quarter growth of 7.2%. Performance was strongest in Germany where RevPAR grew 16.5% whilst mixed trading conditions across the Middle East led to a 4.8% RevPAR decline in that region. RevPAR growth of just 1.2% in the UK was due primarily to previously contracted lower rate business. Revenues increased 3% to $192m (4% CER). Excluding one liquidated damages receipt of $3m in 2009, revenues increased 5% to $192m (5% CER).

Operating profit performance

Excluding the impact of the $3m liquidated damages receipt in 2009, operating profit grew 5% to $58m (9% CER). On this same basis franchised hotels’ operating profit grew $1m to $28m driven by a 4% increase in room count offset by a $2m reduction in initial franchising, relicensing and termination fees. Managed hotels’ operating profit declined by $1m to $32m, with growth in Europe being offset by difficult trading in certain parts of the Middle East. Owned and leased hotels’ operating profit grew $5m to $15m driven by 15.0% RevPAR growth at InterContinental Park Lane and 13.1% growth at InterContinental Paris Le Grand.

Asia Pacific

Revenue performance

RevPAR increased 13.0% in the first half, with second quarter growth of 16.1%. Greater China was the strongest performing region with RevPAR growth of 29.4%, boosted by the Global Expo in Shanghai where RevPAR grew 48.4%. Revenues increased 29% to $137m (25% CER).

Operating profit performance

Operating profit increased 106% to $35m (94% CER). Franchised hotels’ operating profit increased $1m to $3m. Managed hotels’ operating profit grew 76% to $30m (65% CER) primarily driven by 31.2% RevPAR growth across IHG’s managed operations in Greater China and 12% rooms growth across the region. Operating profit at owned and leased hotels increased 27% to $14m reflecting RevPAR growth of 16.5% at InterContinental Hong Kong.

Interest and tax

The interest charge for the period increased $3m to $31m 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 half, the tax charge has been calculated using an estimated annual tax rate of 28% (Estimated annual tax rate at H1 2009: 22%).

Cash flow & net debt

IHG’s balance sheet has been strengthened with net debt down to $1.0bn (including the $205m finance lease on the InterContinental Boston) from $1.3bn as at 30 June 2009. Post period end, the InterContinental Buckhead, Atlanta was sold on 1 July 2010 for $105m, $23m above net book value. Proceeds have been used to reduce debt.

Following the 2009 actuarial review of the UK Pension Plan, the Company has agreed with the Plan Trustees to make additional contributions up to a total of £100m by 31 March 2017. The agreement includes three additional annual contributions of £10m payable over the period 2010-2012, a 7.5% share of net proceeds from the disposal of hotels and a top-up in 2017 to the £100m total if required. The scheme is formally valued every three years and any future valuations could lead to changes in the amounts payable.

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.

Appendix 1: Rooms

  Americas EMEA Asia Pacific Total
Openings 12,320 2,938 3,745 19,003
Removals (7,060) (2,048) 87 (9,021)
Net openings 5,260 890 3,832 9,982
Signings 10,124 3,292 5,710 19,126

Appendix 2: Second quarter financial headlines

Three months to 30 June $m Total Americas EMEA Asia Pacific Central
  2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
Franchised operating profit 124 112 107 97 16 14 1 1 - -
Managed operating profit 41 21 6 (5) 19 17 16 9 - -
Owned and leased operating profit 22 18 6 5 10 9 6 4 - -
Regional overheads (26) (24) (12) (11) (8) (6) (6) (7) - -
Operating profit pre central overheads 161 127 107 86 37 34 17 7 - -
Central overheads (25) (20) - - - - - - (25) (20)
Operating profit 136 107 107 86 37 34 17 7 (25) (20)

Appendix 3: First half financial headlines

Six months to 30 June $m Total Americas EMEA Asia Pacific Central
  2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
Franchised operating profit 219 209 188 177 28 30 3 2 - -
Managed operating profit 75 41 13 (9) 32 33 30 17 - -
Owned and leased operating profit 33 25 4 4 15 10 14 11 - -
Regional overheads (55) (51) (26) (23) (17) (15) (12) (13) - -
Operating profit pre central overheads 272 224 179 149 58 58 35 17 - -
Central overheads (53) (45) - - - - - - (53) (45)
Operating profit 219 179 179 149 58 58 35 17 (53) (45)

Appendix 4: Constant currency operating profit movement before exceptional items

  Americas EMEA Asia Pacific Total***
Actual currency* Constant currency** Actual currency* Constant currency** Actual currency* Constant currency** Actual currency* Constant currency**
Exchange rates GBP:USD EUR:USD
2010 0.66 0.75
2009 0.67 0.75

*   US dollar actual currency;
** Translated at constant 2009 exchange rates;
*** After central overheads

Growth 20% 19% 0% 3% 106% 94% 22% 23%

Appendix 5: Definition of total gross revenue

Total gross revenue is defined as total room revenue from franchised hotels and total hotel revenue from managed, owned and leased hotels. It is not revenue attributable to IHG, as it is derived mainly from hotels owned by third parties. The metric is highlighted as an indicator of the scale and reach of IHG’s brands.

Appendix 6: Investor information for 2010 interim dividend

Ex-dividend Date: 25 August 2010
Record Date: 27 August 2010
Payment Date: 1 October 2010
Dividend payment: Ordinary shares 8.0p per share: ADRs 12.8¢ per ADR

For further information, please contact:

Investor Relations (Heather Wood; Catherine Dolton): +44 (0) 1895 512 176
Media Affairs (Leslie McGibbon, Joyce Lorigan): +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.

Presentation for Analysts and Shareholders

A presentation with Andrew Cosslett (Chief Executive) and Richard Solomons (Chief Financial Officer and Head of Commercial Development) will commence at 9.30am (London time) on 10 August at Merrill Lynch Financial Centre, 2 King Edward Street, London, EC1A 1HQ. There will be an opportunity to ask questions. The presentation will conclude at approximately 10.30am (London time).

There will be a live audio webcast of the results presentation on the web address The archived webcast of the presentation is expected to be on this website later on the day of the results and will remain on it for the foreseeable future. There will also be a live dial-in facility

International dial-in: +44 (0)20 7806 1957
Passcode: 3043618 or "InterContinental Hotels Group"

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 10 August with Andrew Cosslett (Chief Executive) and 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 6826#.

International dial-in   +44 (0)20 7970 8268
Standard US dial-in   +1 203 369 4826
US Toll Free   877 274 0700


The full release and supplementary data will be available on our website from 7.00am (London time) on 10 August. 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 franchises, leases, manages or owns, through various subsidiaries, over 4,500 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 52 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.

Last updated 10 August 2010

Find out more about our brands

IHG logo

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

*IHG® Rewards Club not applicable to Kimpton® Hotels & Restaurants; to be included at a future date.