InterContinental Hotels Reports 6.9 Percent Increase in Revenue

InterContinental Hotels Reports 6.9 Percent Increase in Revenue

InterContinental Hotels Group PLC reported global revenue growth of 6.9 percent, including rate growth of 1.9 percent, for the first quarter of 2011, ended March 31. Total system size of 652,456 rooms (4,422 hotels) was up 0.1 percent year on year. Added were 15,153 rooms (53 hotels), including 6,986 rooms (two hotels) from the first InterContinental Alliance Resorts, and 9,858 rooms (68 hotels) removed.

The company additionally reported signings of 8,399 rooms (63 hotels), ahead of the first quarter of 2010. Almost half were conversions. The total pipeline consists of 191,182 rooms (1,236 hotels), of which 26 percent are in Greater China. 2011 net system growth will be modest as previously disclosed due to the final Holiday Inn relaunch exits.

The relaunch is driving continued RevPAR outperformance, with the wider benefits clear as global core brand hotel signings are up 27 percent year on year. April global RevPAR was up 4.9 percent, up 6.1 percent excluding Bahrain, Egypt and Japan.

The Americas are experiencing good growth in franchise profits. RevPAR for the region increased 7.7 percent, including rate growth of 1.6 percent. U.S. RevPAR was up 8.4 percent, including rate growth of 2 percent. Revenue increased 9 percent to $194 million and operating profit increased 35 percent to $97 million.

After adjusting for the owned hotel disposals in 2010 and excluding the impact of a $10 million liquidated damages receipt in the managed business in 2011, revenue was up 9 percent and operating profit up 23 percent, primarily driven by an 11 percent increase in franchise royalties. A $3 million decline in regional costs was due to timing of costs related to the company’s self-insured healthcare benefit plan.

The company signed 6,059 rooms (50 hotels) in the first quarter, almost 1,300 rooms more than the same period in 2010, driven by Holiday Inn signings, demonstrating the continuing benefits of the relaunch. A total of 11,812 rooms (42 hotels) were opened into the system, including 6,986 rooms at the Las Vegas Sands Venetian and Palazzo InterContinental Alliance Resorts, and the 513-room Holiday Inn Toronto, the brand’s biggest hotel in Canada.