Positive Results for InterContinental Hotels Group's 1H2008

InterContinental Hotels Group's three year net rooms growth target, which was set for end 2008, has been exceeded six months ahead of schedule, with 60,490 rooms added since June 2005. 48,282 new rooms (356 hotels) were signed during the first six months of this year, bringing the pipeline to 242,349 rooms (1,788 hotels) which is 41% of the existing system size. Global constant currency Revenue per Available Room (RevPAR) grew 45. Total gross revenue from all hotels in IHG’s system in the period was $9.6 billion, up 8% in constant currency.

In Asia Pacific, a total of 2,670 net rooms were opened and another 8,922 rooms signed across the InterContinental, Crowne Plaza, Holiday Inn and Holiday Inn Express brands. RevPAR increased 5.2% across the region, driven by rate. Greater China RevPAR grew 1.7%, slowing from 3.2% in the first quarter to 0.5% in the second mainly due to the impact of the Sichuan earthquake and the introduction of international visa restrictions. Continuing revenues grew 18% to $141 million across the region, driven by 15% growth in owned and leased revenues and 27% growth in managed revenues.

Operating profit from continuing operations grew 7% to $29 million. Owned and leased hotel operating profit increased 33% to $20 million driven by 15.2% RevPAR growth at the InterContinental Hong Kong, after completion of its multi year refurbishment at the end of 2007. Managed hotel profit grew $7 million to $26 million driven by 5.1% RevPAR growth, an increased contribution from the joint venture with All Nippon Airways (ANA) and continued room expansion in Southern Asia and Greater China.

The fastest growth was seen in China, where a total of 16 IHG hotels and nearly 5,000 employees in Beijing are currently busy supporting athletes, officials and visitors during the Olympics. Today, IHG has 95 hotels open in Greater China and 116 in the pipeline.

Peter Gowers, chief executive, IHG Asia Pacific said, “We intend to continue to grow our market share in Greater China. In Beijing alone we opened seven hotels in the month leading up to the Olympics. Our current presence combined with our pipeline puts us over 20,000 rooms ahead of our nearest competitor. The Chinese government’s investment in infrastructure, along with the increase in travel – both inbound and outbound – make China a strong growth market for the foreseeable future.”

The following seven new hotels were opened in Beijing during the past several weeks:

- InterContinental Beijing Beichen 
- Crowne Plaza Sun Palace Beijing 
- Crowne Plaza International Airport Beijing 
- Holiday Inn Express Beijing Temple of Heaven 
- Holiday Inn Express Beijing Guangshun 
- Holiday Inn Express Beijing Wangjing
- Holiday Inn Express Beijing Mingzuyuan

During the first half, IHG also signed six Holiday Inn hotels in India, where the company currently has a pipeline of more than 20 hotels (5,000 rooms). The company also signed another three hotels in Vietnam, a new market with good long term potential. IHG is one of the fastest growing international operators in Vietnam, with a pipeline of seven hotels – three InterContinental hotels located in Hanoi, Ho Chi Minh City and Danang, and four Crowne Plaza hotels in Hanoi, Danang and Nha Trang.

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