09 August 2021
Interim results to 30 June 2021
REPORTABLE SEGMENTS1 | Reported |
Underlying1 | ||
---|---|---|---|---|
2021 | 20202 | %Change3 | %Change | |
Revenue1 | $565m | $488m | +16% | +14% |
Revenue from fee business1 | $505m | $375m | +35% | +31% |
Operating profit1 | $188m | $52m | +262% | +314% |
Fee margin1 | 44.1% | 20.1% | +24%pts | |
Adjusted EPS1 | 40.4¢ | 4.9¢ | +724% | |
GROUP RESULTS | ||||
Total revenue | $1,179m | $1,248m | (6)% | |
Operating profit/(loss) | $138m | $(233)m | NM | |
Basic EPS | 26.2¢ | (115.4)¢ | NM | |
Total dividend per share | - ¢ | - ¢ | - % | |
Net debt |
$2,458m | $2,515m | (2)% |
Key metrics vs 2019
- $7.9bn total gross revenue1 (down (42)%)
- (42.6)% global H1 RevPAR1
- (36.3%)% global Q2 RevPAR
- Significant improvement in demand over the course of H1, resulting in RevPAR (43)% vs 2019 and +20% vs 2020
- Recovery most advanced in Greater China with Q2 RevPAR (16)% vs 2019; continued improvement in the Americas to (26)%; EMEAA still most challenged at (65)%. Regional performance reflects variations in both vaccine rollout progress and travel restrictions
- Group Q2 RevPAR (36)% vs 2019, reflecting occupancy 19%pts lower and rate sustained at 87% of 2019 levels; Q2 occupancy of 53% improved through the quarter; June 69% in the US; 54% Greater China; and 40% EMEAA
- Operating profit from reportable segments of $188m, +262% vs 2020, (down 54% vs 2019); reported operating profit of $138m, after System Fund result of $(46)m and operating exceptionals of $(4)m
- Cost reductions in the fee business this year of ~$75m vs 2019 on track, and sustainable whilst still investing for growth; majority of these savings delivered in H1; higher investment for growth expected in H2
- Strong cash conversion resulting in adjusted free cash flow1 of $147m (2020: outflow of $66m), and net cash from operating activities of $173m (2020: outflow of $14m)
- Gross system growth of +5.1% YOY; after removals, including SVC portfolio termination in Q4 2020 and Holiday Inn and Crowne Plaza review in H1 2021, net system size growth +0.1% YOY
- Opened 17.4k rooms (132 hotels) in H1, +46% vs 2020; global estate now at 884k rooms (5,994 hotels)
- Signed 32.6k rooms (203 hotels) in H1, +24% vs 2020; global pipeline now at 274k rooms (1,805 hotels)
- New collection brand launching to capture the increasing opportunities of conversions and further strengthen our position in Luxury & Lifestyle
Keith Barr, Chief Executive Officer, IHG Hotels & Resorts, said: "Trading improved significantly during the first half of 2021, with travel demand returning strongly as vaccines roll out, restrictions ease, and economic activity rebuilds. It has been great to see our teams welcome more and more guests back into our hotels, with domestic leisure bookings leading the way, particularly in the US and China. Essential business travel was a key element of our resilience throughout the pandemic, and we are now seeing more group activity and corporate bookings start to come back. These trends and the momentum in the business have continued in recent weeks, including in EMEAA where a lifting of travel restrictions in some markets is also now driving improvements in demand. With occupancy and rate continuing to improve, nearly 50% of our hotels achieved RevPAR above 2019 levels in July.
As more development activity returns to the industry, the strength of IHG’s brand portfolio and the power of our scale, systems and platforms for owners is being clearly recognised. We opened 132 hotels in the half and signed 203, both sizeable increases on last year. Our focus on the quality of our estate remains extremely high, and we’re making rapid progress with the review of our Holiday Inn and Crowne Plaza portfolios to ensure the consistency of these leading brands and that they are well positioned for future growth. With the actions we are taking, and a pipeline that represents more than 30% of our current system size, we expect to return quickly to an industry-leading level of net rooms growth.
We’re also excited to announce that we’ll soon be launching a new Luxury & Lifestyle collection brand to provide further choice for guests and owners. Over the last four years we’ve added five new brands to create a portfolio of 16, each targeting a specific segment and enhancing our market reach. The addition of a collection brand will provide high quality independent hotels access to the many benefits of IHG’s system, whilst retaining a property’s distinctive identity. There are currently around 1.5 million independently run rooms in the market segments we are targeting, and we expect the collection to attract more than 100 hotels within 10 years.
The actions we have taken during the last 18 months position us well to exceed our pre-pandemic level of growth and profitability. While there is a risk of trading volatility in the balance of the year, and discretionary business trips, group bookings and international travel will take time to fully recover, we are confident in the strength of IHG’s future prospects."
Download the full announcement of our 2021 interim results here.
Ends
About IHG®
IHG Hotels & Resorts [LON:IHG, NYSE:IHG (ADRs)] is a global hospitality company, with a purpose to provide True Hospitality for Good.
With a family of 17 hotel brands and IHG Rewards, one of the world’s largest hotel loyalty programmes, IHG has over 6,000 open hotels in more than 100 countries, and a further 1,800 in the development pipeline.
- Luxury & Lifestyle: Six Senses Hotels Resorts Spas, Regent Hotels & Resorts, InterContinental Hotels & Resorts, Vignette Collection, Kimpton Hotels & Restaurants, Hotel Indigo
- Premium: voco Hotels, HUALUXE Hotels & Resorts, Crowne Plaza Hotels & Resorts, EVEN Hotels
- Essentials: Holiday Inn Hotels & Resorts, Holiday Inn Express, avid hotels
- Suites: Atwell Suites, Staybridge Suites, Holiday Inn Club Vacations, Candlewood Suites
InterContinental Hotels Group PLC is the Group’s holding company and is incorporated and registered in England and Wales. Approximately 350,000 people work across IHG’s hotels and corporate offices globally.
Visit us online for more about our hotels and reservations and IHG Rewards. For our latest news, visit our Newsroom and follow us on LinkedIn, Facebook and Twitter.
Contact details
For further information, please contact:
Investor Relations
Stuart Ford; Rakesh Patel:
+44 (0)1895 512 176
+44 (0)7527 419 431
Media Relations
Yasmin Diamond; Mark Debenham:
+44 (0)1895 512 097
+44 (0)7527 424 046
Presentation for analysts and shareholders
UK conference call and Q&A: 9.30am London time, 4.30am New York time
A conference call and webcast presented by Keith Barr, Chief Executive Officer, and Paul Edgecliffe-Johnson, Chief Financial Officer & Group Head of Strategy, will commence at 9:30am London time on Tuesday, 10 August. There will be an opportunity to ask questions.
A live webcast will be available here. For those wishing to ask questions, please use the dial in details below, which will have a Q&A facility. The webcast replay will be available on the website on the day of results and will remain there for the foreseeable future.
UK Local: |
0203 936 2999 |
UK: |
0800 640 6441 |
US: | +1 855 9796 654 |
International dial-in: | +44 (0) 203 936 2999 |
Passcode: | 27 88 30 |
Conference call and Q&A - REPLAY:
A recording of the conference call will be available for 7 days from 11.30am London time.
UK: |
020 3936 3001 |
US: | +1 845 709 8569 |
International dial-in: | + 44 (0) 203 936 3001 |
Passcode: | 82 83 10 |