Annual report and summary financial statements 2006 

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Operating and financial review

Asia Pacific

Asia Pacific results   12 months ended 31 December
2006
$m
2005
$m
%
change
*Discontinued operations are all owned and leased.
Revenue:        
Owned and leased   131 108 21.3
Managed   65 45 44.4
Franchised   8 6 33.3
Continuing operations   204 159 28.3
Discontinued operations*   98
Total $m 204 257 (20.6)
         
Sterling equivalent m 111 141 (21.3)
         
Operating profit before other operating income and expenses:
Owned and leased   31 20 55.0
Managed   39 29 34.5
Franchised   5 5
    75 54 38.9
Regional overheads   (23) (15) 53.3
Continuing operations   52 39 33.3
Discontinued operations*   20
Total $m 52 59 (11.9)
Sterling equivalent m 29 32 (9.4)

Revenue and operating profit from continuing operations increased by 28.3% to $204m and 33.3% to $52m respectively during 2006. Including discontinued operations, revenue and operating profit declined by 20.6% and 11.9% respectively, reflecting the sale of 10 owned and leased hotels in Australasia and Fiji during 2005.

Continuing owned and leased operating profit increased by 55.0% to $31m driven by trading at the InterContinental Hong Kong which achieved rate-led RevPAR growth of over 30.0%. The hotel also benefited from a rooms refurbishment programme and the prior year repositioning of its food and beverage operations.

The managed estate achieved revenue growth of 44.4%, increasing from $45m to $65m, due to the retention of management contracts on the 10 owned and leased hotels sold in 2005 combined with strong underlying trading in Greater China where comparable RevPAR increased by 12.1% over 2005.

Figure 14

Asia Pacific hotel
and room count
at 31 December
Hotels Rooms
2006 Change
over 2005
2006 Change
over 2005
Analysed by brand:        
InterContinental 33 6 11,651 2,190
Crowne Plaza 52 14 16,588 4,289
Holiday Inn 91 3 23,775 1,907
Holiday Inn Express 8 4 1,755 982
Other 4 (1) 968 (139)
Total 188 26 54,737 9,229
Analysed by ownership type:        
Owned and leased 2 693
Managed 149 29 45,282 9,050
Franchised 37 (3) 8,762 179
Total 188 26 54,737 9,229

Figure 15

Asia Pacific pipeline
at 31 December
Hotels Rooms
2006 Change
over 2005
2006 Change
over 2005
Analysed by brand:        
InterContinental 20 9 7,727 4,458
Crowne Plaza 21 2 7,607 1,582
Holiday Inn 33 10 10,390 3,262
Holiday Inn Express 12 9 4,525 3,578
Total 86 30 30,249 12,880
Analysed by ownership type:        
Managed 86 30 30,249 12,880
Total 86 30 30,249 12,880

Regional overheads increased by $8m to $23m. The increase reflects infrastructure and development costs including additional headcount, office facility and IT costs, all associated with ongoing expansion in the region.

Net hotel and room count in Asia Pacific increased by 26 hotels (9,229 rooms) (see figure 14). The net growth includes 14 hotels (3,628 rooms) in Greater China reflecting continued expansion in one of IHG’s strategic markets and 13 hotels (4,937 rooms) in Japan that joined the system as part of the IHG ANA transaction.

The pipeline in Asia Pacific increased by 30 hotels (12,880 rooms) to 86 hotels (30,249 rooms). The substantial growth indicates the demand for IHG’s brands in the Chinese market where signings of 16,445 rooms were more than double 2005 signings.

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