ATLANTA—InterContinental Hotels Group (IHG) has reported its year-end 2019 results, citing revenue growth and record pipeline numbers, growing its estate by 5.6%.
Keith Barr, CEO, IHG, said, “Our performance in 2019 reflects the continued successful execution of our strategy, with the investments we’re making in our brands, owner offer and enterprise capabilities accelerating net room openings and supporting sustainable long-term growth. These investments are being funded by our group-wide efficiency program, which is on track to deliver $125 million of annual savings, with the majority already realized and being reinvested across the business.
“During the year, we grew our estate by 5.6%, our highest rate in more than a decade, which helped deliver a 6% increase in underlying operating profit in a weaker RevPAR environment,” he said. “We increased our ordinary dividend by 10%, and remain committed to returning surplus cash to our shareholders.”
- Net system size growth of 5.6% (5.0% excluding Sands partnership in Macau SAR), the strongest in more than a decade, with 65,000 room additions. Ongoing focus on the long-term health of established brands drove 18,000 removals, leaving 884,000 rooms across the global estate.
- Operating profit from reportable segments up 4%; operating profit up 8% after System Fund result and exceptional items, which in 2019 include impairment charges to the U.K. leased portfolio and Kimpton management agreements.
- FY Comparable RevPAR: Global = 0.3%; Americas = 0.1%; U.S. = 0.2%; EMEAA = 0.3%; Greater China = 4.5%. Performance was impacted by macro and geopolitical factors, increased supply growth ahead of demand in some markets, and ongoing unrest in Hong Kong SAR.
- Full-year signings of 98,000 rooms (down 1% YoY), which includes record performance in Greater China and EMEAA. Total pipeline now stands at 283,000 rooms.
Six Senses grew at pace with 10 signings since the acquisition in February 2019; 18 properties are now open. Kimpton signed 11 further deals, growing its portfolio to almost 100 open and pipeline hotels. Crowne Plaza launched six flagship properties in key cities with new room and public space designs. Voco signed 33 hotels across 16 countries since its launch, with 12 open and plans to continue global expansion in 2020. Holiday Inn opened more than 13,000 rooms, offering the best ever full-year performance for the brand. Holiday Inn Express has new guestroom and public space designs open or committed to in more than 1,600 hotels. Avid has 10 properties now open, with more than 80 more under construction or with planning approved.
“Led by strong demand for our established brands, we opened a record number of rooms, including our best ever performance for the Holiday Inn brand family, and we increased our share of signings in key markets globally. Future rooms growth will be further supported by our newer brands, with Avid, Atwell Suites, Regent and Six Senses all attracting strong interest, and Voco set to continue its global expansion in 2020, following an excellent performance in EMEAA,” Barr said.
He continued, “Given the ongoing impact of coronavirus following the outbreak in China, our top priority remains the health and safety of our colleagues, guests and our partners on the ground, and we are doing all we can to support them at this difficult time. The fundamentals of our industry remain strong, and our cash-generative, resilient fee-based model, underpinned by a commitment to operate a responsible business, gives us confidence to continue making the strategic investments that will drive our long-term growth.”