TIDMIHG
RNS Number : 8801P
InterContinental Hotels Group PLC
22 October 2021
22 October 2021
InterContinental Hotels Group PLC
2021 Third Quarter Trading Update
Highlights
-- Significant improvement in trading, leading to Q3 group RevPAR (21)%
vs 2019 (+66% vs 2020)
-- Average daily rate attained in line with 2019 levels; occupancy of
60% achieved
-- Gross system growth of +5.2% YOY; opened 12.3k rooms (79 hotels) in
Q3; opened 29.6k YTD, +30% vs 2020
-- Review of around 200 Holiday Inn and Crowne Plaza hotels on track;
over 90 hotels exited already or with an exit confirmed, and more
than 40 committed to improvement plans or scopes of work
-- Of 26.5k rooms removed YTD, 17.1k relate to Holiday Inn and Crowne
Plaza in Americas and EMEAA
-- Net system growth flat YOY (+1.9% excluding the SVC portfolio termination
in Q4 2020)
-- Global system of 889k rooms (6,031 hotels); 68% across midscale segments,
32% across upscale and luxury
-- Signed 12.6k rooms (91 hotels) in Q3; signed 45.2k YTD, +13% vs 2020;
global pipeline 270k rooms
-- Fee business cost savings of $75m vs 2019 on track and sustainable
in future years whilst still investing for growth
-- Additional temporary cost savings in 2021 of $25m
Keith Barr, Chief Executive Officer, IHG Hotels & Resorts,
said:
"Trading continued to improve significantly in the third
quarter. RevPAR recovered closer towards pre-pandemic levels as
more and more guests returned to our hotels around the world.
Domestic leisure demand was particularly strong in a number of
markets over the summer, where occupancy and rate climbed back to
2019 levels. Discretionary business travel, group bookings and
international trips have also shown increasingly encouraging signs,
on top of continuing good levels of essential business demand.
We continue to grow rapidly, opening 79 hotels in the quarter
and signing another 91 in to our pipeline of 1,800 properties, and
we expect development activity to pick up further over the
remainder of the year. Across our portfolio of 17 brands, owner
interest is strong both for those brands recently launched or
acquired, in addition to our well--established and industry-leading
brands. The rapid progress we are making with the review of the
Holiday Inn and Crowne Plaza portfolios is also ensuring that we
are well positioned for future growth.
While we remain vigilant to fluctuating Covid restrictions in
different markets, the pace of returning demand is very encouraging
as travel increasingly re-opens in every region. The strength of
our brands, platforms and scale gives us confidence in IHG's future
prospects and of both exceeding prior levels of profitability and
delivering industry-leading net system size growth in the coming
years."
Regional performance
Americas
Q3 RevPAR was down 10% vs 2019 (up 76% vs 2020). US RevPAR was
down 7% vs 2019. Across the region, occupancy was 66%, up from 60%
in the prior quarter. Holiday Inn Express saw occupancy rise to
70%, while our Extended Stay brands achieved 80%, exceeding 2019
levels. Demand was particularly strong over the peak summer
vacation period - in July, across our near-3,000 US hotels in
non-urban locations, RevPAR was up 2% vs 2019. Across our US
franchised estate, which is weighted to domestic demand in upper
midscale hotels, Q3 RevPAR declined by 4% vs 2019; the US managed
estate, weighted to upscale and luxury hotels in urban locations,
declined by 31%. We have continued to see more group activity and
corporate bookings in recent months; during September, there was
sequential weekly improvement in demand, with particular strength
from construction, logistics and technology business customers.
Gross system growth was +3.3% YOY, with 2.9k rooms (30 hotels)
opened in the quarter. Net system reduction was 3.6% YOY (or 0.5%
excluding the SVC portfolio termination in Q4 2020); there were
5.7k rooms (32 hotels) removed in the quarter, which included 3.3k
Holiday Inn and Crowne Plaza rooms (16 hotels). 4.1k rooms (43
hotels) were added to the pipeline in the quarter, representing a
further sequential improvement in the signings pace.
EMEAA
Q3 RevPAR was down 43% vs 2019 (up 86% vs 2020). Occupancy rose
to 49%, improving from 34% in Q2. Reflecting the differing levels
of market restrictions, particularly on international travel, there
was a broad spread of performance within the region: Q3 RevPAR was
down 22% vs 2019 in the UK, 48% in Continental Europe, 39% in the
Middle East, 57% in Japan, and 68% in both South East Asia &
Korea and Australia.
Hotels continued to reopen across the region; just 28 or 2%
remained temporarily closed at the end of September, compared to
215 at the start of the year.
Gross system growth was +5.3% YOY. In the quarter, 4.1k rooms
(22 hotels) were opened, while 1.3k rooms (7 hotels) were removed
(which included 0.9k Holiday Inn and Crowne Plaza rooms), leading
to net growth of +1.7% YOY. We signed 2.2k rooms (14 hotels) in the
quarter, half of which were conversions.
Greater China
Q3 RevPAR was down 30% vs 2019 (down 8% vs 2020), with occupancy
of 49% for the quarter. In July, RevPAR was just 6% lower than 2019
levels, driven by a continuation of the recovery seen in the prior
quarter and strong domestic leisure demand. However, increases in
Covid-19 cases and the reintroduction of temporary restrictions
resulted in RevPAR weakening to a 55% decline in August, though the
recovery resumed once again in September with the RevPAR decline
improving to 26%. In Mainland China, Q3 RevPAR was down 28% vs
2019, and in July was flat. As seen in previous quarters, Tier 2-4
cities performed better than Tier 1 cities, particularly Tier 4
which saw RevPAR up 42% on 2019 levels in July due to high demand
in resort destinations.
Gross system growth was +12.2% YOY. In the quarter, 5.3k rooms
(27 hotels) were opened, while 565 rooms (3 hotels) were removed,
leading to net growth of +10.6% YOY. We signed 6.3k rooms (34
hotels) in the quarter. Covid restrictions impacted development
activity in the period, with the pace of signings expected to pick
up in the fourth quarter.
For further information, please contact:
Investor Relations (Stuart Ford; Rakesh Patel; Kavita
Tatla) +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
------------------------------------------------------- -------------------- --------------------
Conference call for analysts and shareholders:
A conference call with Paul Edgecliffe-Johnson, Chief Financial
Officer and Group Head of Strategy, will commence at 9:00am (London
time) on 22 October and can be accessed at
www.ihgplc.com/en/investors/results-and-presentations .
Analysts and institutional shareholders wishing to ask questions
should use the following dial-in details for a Q&A
facility:
UK local: 0203 936 2999
UK: 0800 640 6441
US: +1 646 664 1960
All other locations: +44 203 936 2999
Passcode: 70 77 30
An audio replay will also be available for 7 days using the
following details:
UK: 0203 936 3001
All other locations: +44 203 936 3001
Passcode: 36 49 47
Website:
The full release and supplementary data will be available on our
website from 7:00am (London time) on 22 October. The web address is
www.ihgplc.com/en/investors/results-and-presentations .
About IHG Hotels & Resorts:
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 .
Appendix 1: RevPAR(1) movement summary
Q3 2021 vs 2019 Q3 2021 vs 2020
RevPAR ADR Occupancy RevPAR ADR Occupancy
-------- ------- ----------- ------- ------ ----------
Group (20.9)% (1.2)% (14.8)%pts 65.9% 24.2% 14.8%pts
Americas (9.9)% 1.3% (8.2)%pts 76.3% 24.2% 19.4%pts
EMEAA (43.1)% (9.5)% (29.2)%pts 86.0% 18.3% 17.8%pts
G. China (29.9)% (6.6)% (16.3)%pts (8.4)% 6.7% (8.1)%pts
-------- ------- ----------- ------- ------ ----------
Q3 YTD 2021 vs 2019 Q3 YTD 2021 vs 2020
RevPAR ADR Occupancy RevPAR ADR Occupancy
-------- -------- ----------- ------- ------- ----------
Group (34.6)% (10.7)% (18.7)%pts 37.1% 5.2% 11.9%pts
Americas (24.9)% (8.1)% (12.9)%pts 45.3% 7.5% 15.0%pts
EMEAA (58.6)% (18.3)% (36.4)%pts 10.9% (2.1)% 4.3%pts
G. China (27.4)% (11.4)% (10.9)%pts 40.7% 4.7% 12.6%pts
-------- -------- ----------- ------- ------- ----------
Appendix 2: RevPAR(1) movement at constant exchange rates (CER)
vs. actual exchange rates (AER)
Q3 2021 vs 2019 Q3 2021 vs 2020
CER AER Difference CER AER Difference
-------- -------- ----------- ------- ------- -----------
Group (20.9)% (19.5)% 1.4%pts 65.9% 68.4% 2.5%pts
Americas (9.9)% (10.0)% (0.1)%pts 76.3% 76.9% 0.6%pts
EMEAA (43.1)% (40.5)% 2.6%pts 86.0% 90.3% 4.3%pts
G. China (29.9)% (24.3)% 5.6%pts (8.4)% (2.3)% 6.1%pts
-------- -------- ----------- ------- ------- -----------
Q3 YTD 2021 vs 2019 Q3 YTD 2021 vs 2020
CER AER Difference CER AER Difference
-------- -------- ----------- ------ ------ -----------
Group (34.6)% (33.6)% 1.0%pts 37.1% 39.5% 2.4%pts
Americas (24.9)% (25.0)% (0.1)%pts 45.3% 45.7% 0.4%pts
EMEAA (58.6)% (56.8)% 1.8%pts 10.9% 15.4% 4.5%pts
G. China (27.4)% (23.2)% 4.2%pts 40.7% 51.1% 10.4%pts
-------- -------- ----------- ------ ------ -----------
Appendix 3: Monthly RevPAR(1) (CER)
2021 vs Jan Feb Mar Apr May Jun Jul Aug Sep
2019
------- ------- ------- ------- ------- ------- ------- -------
Group (52.5)% (53.8)% (46.6)% (41.4)% (37.1)% (31.0)% (18.4)% (23.0)% (21.5)%
Americas (45.1)% (45.4)% (39.4)% (32.3)% (27.8)% (19.7)% (7.3)% (12.1)% (10.6)%
EMEAA (71.1)% (72.7)% (70.6)% (70.1)% (65.8)% (59.4)% (48.2)% (38.2)% (42.8)%
G. China (41.5)% (51.1)% (23.2)% (14.9)% (12.0)% (21.5)% (6.4)% (55.2)% (25.9)%
------- ------- ------- ------- ------- ------- ------- ------- -------
2021 vs Jan Feb Mar Apr May Jun Jul Aug Sep
2020
------- ------- ------- ------ ------ ------ ------ -------
Group (51.7)% (47.7)% 20.8% 228.0% 156.7% 108.4% 91.9% 52.8% 55.7%
Americas (44.2)% (44.2)% 20.7% 245.3% 160.4% 108.0% 98.6% 68.3% 63.0%
EMEAA (72.2)% (69.7)% (21.5)% 183.4% 194.1% 165.4% 100.9% 77.8% 82.4%
G. China (21.9)% 335.0% 288.6% 199.6% 107.5% 51.3% 45.3% (43.0)% (15.6)%
------- ------- ------- ------ ------ ------ ------ ------- -------
2020 vs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2019
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Group (1.5)% (10.8)% (55.1)% (81.9)% (75.6)% (67.4)% (58.1)% (51.0)% (50.9)% (51.9)% (55.3)% (52.4)%
Americas 0.2% (0.9)% (49.0)% (80.1)% (72.5)% (62.0)% (54.0)% (48.6)% (46.4)% (48.0)% (51.4)% (49.5)%
EMEAA 2.1% (11.3)% (62.7)% (89.3)% (88.5)% (85.3)% (74.7)% (66.3)% (69.9)% (70.5)% (72.4)% (68.6)%
G. China (24.6)% (89.3)% (81.4)% (71.2)% (57.1)% (48.6)% (35.9)% (20.2)% (11.0)% (16.9)% (22.5)% (15.1)%
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(1.) RevPAR is presented on a comparable basis, comprising
groupings of hotels that have traded in all months in both years
being compared. Comparable hotel groupings will be different for
comparisons between 2021 vs 2019, 2021 vs 2020 and 2020 vs 2019.
See 'Use of non-GAAP measures' in IHG's half year and full year
results announcements for further information on the definition of
RevPAR.
Appendix 4: System and pipeline summary of Q3 YTD 2021 movements
and total closing position (rooms):
System Pipeline
Openings Removals Net Total YTD% YOY%* Signings Total
--------- --------- -------- -------- ------- -------- --------- --------
Group 29,625 (26,497) 3,128 889,164 +0.4% 0.0%* 45,197 270,274
Americas 11,647 (18,138) (6,491) 507,521 (1.3)% (3.6)%* 11,870 96,701
EMEAA 5,653 (7,248) (1,595) 226,254 (0.7)% +1.7% 11,043 77,127
G. China 12,325 (1,111) 11,214 155,389 +7.8% +10.6% 22,284 96,446
--------- --------- -------- -------- ------- -------- --------- --------
* If the SVC portfolio termination of 16.7k rooms (102 hotels)
in Q4 2020 was excluded, net system growth YOY was +1.9% for the
Group and (0.5)% for Americas
Cautionary note regarding forward-looking statements:
This announcement contains certain forward-looking statements as
defined under United States law (Section 21E of the Securities
Exchange Act of 1934) and otherwise. These forward-looking
statements can be identified by the fact that they do not relate
only 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. These statements are based on assumptions and
assessments made by InterContinental Hotels Group PLC's management
in light of their experience and their perception of historical
trends, current conditions, expected future developments and other
factors they believe to be appropriate. 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. The main factors that could affect the
business and the financial results are described in the 'Risk
Factors' section in the current InterContinental Hotels Group PLC's
Annual report and Form 20-F filed with the United States Securities
and Exchange Commission.
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