IHG increases profits by a third
The group, which operates Holiday Inn, Crowne Plaza and the InterContinental Hotel brands, said business in the United States was the strongest in five years, while China was its strongest market with revenue per available room (RevPAR) in the country growing by almost 19 per cent.
IHG’s European operations also posted an increase, although this was more modest compared to other global markets.
Figures
In the three months ending 31 March 2011, the group reported revenue of US$396m, up 9 per cent on the same period last year. Operating profit increased by 35 per cent to reach $112m.
RevPAR increased by 6.4 per cent for IHG’s hotels in the Americas, by 5.3 per cent in Asia Pacific, and by 0.5 per cent in Europe, the Middle East and Africa (EMEA). Occupancy increased by 2.7, 1.2 and 1.6 per cent respectively, while room rates increased by 1.9 per cent in the Americas and 3.4 per cent in Asia pacific, with rates in EMEA falling 2 per cent.
The quarter also saw 15,153 new rooms opening across the group’s operations, along with 9,858 closures. The bulk of these, in both cases, were in the Americas.
Business model
Outgoing chief executive Andrew Cosslett said the quarter’s results showed good use of the group’s scale and efficiency of its business model.
"Our strategy to free up capital to drive growth for our brands is on track,” he said. “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.”
Moving forward, the group expects to see further increases in performance and rates, and says it is “well positioned” to take advantage of these.
