3 May 2024
InterContinental Hotels Group
PLC
2024
First Quarter Trading Update
●
|
Q1 global RevPAR +2.6% YOY, with
Americas -0.3%, EMEAA +8.9% and Greater China +2.5%
|
●
|
Average daily rate +2.3%, occupancy
+0.2%pts
|
●
|
Gross system size growth +5.0% YOY,
+0.7% YTD; opened 6.3k rooms (46 hotels) in Q1, +11.1% more YOY
adjusting for Iberostar
|
●
|
Net system size growth +3.4% YOY,
+0.0% YTD; adjusting for Iberostar +3.2% YOY, +0.0% YTD
|
●
|
Global system of 946k rooms (6,368
hotels); 66% across midscale segments, 34% across upscale and
luxury
|
●
|
Signed 17.7k rooms (129 hotels) in
Q1, +7.1% YOY; global pipeline of 305k rooms (2,079 hotels), +6.6%
YOY
|
●
|
$239m of 2024's $800m share buyback
programme completed to date, reducing share count by
1.4%
|
●
|
Agreement in Germany with NOVUM
Hospitality signed in April, adding up to 17.7k rooms
(119 hotels) or +1.9% to global system growth
|
●
|
Changes to System Fund arrangements,
improving owner economics and growing IHG's ancillary fee
streams
|
Elie Maalouf, Chief Executive Officer, IHG Hotels &
Resorts, said:
"Global RevPAR in the first quarter
of 2024 continued to grow, up +2.6%, reflecting the strength of our
globally diverse footprint. There was an impressive performance in
EMEAA which was up nearly +9%. The Americas, having already
recovered very strongly, was broadly flat due to some adverse
calendar timing, and Greater China grew by +2.5% and will continue
to benefit from returning international inbound travel this year.
Global occupancy moved up to 62% and average daily rate increased
by a further +2% as pricing remained robust, reflecting the
complete return of leisure, business, and group travel.
We opened more than 6,200 rooms
across 46 hotels in the quarter, and signed nearly 18,000 rooms
across 129 properties to increase our pipeline +6.6%
year-on-year. Compared to the same quarter last year, room openings
rose +11% adjusting for Iberostar, and signings grew +7%. 'Quicker
to market' conversions generated over 35% of openings and signings
in the quarter, reflecting the attractiveness of our brands and
enterprise platform. In April, we were delighted to announce an
agreement with NOVUM Hospitality that will double IHG's presence in
Germany through even more conversions and strengthen our position
in a priority market for domestic, inbound and outbound travel. The
deal adds up to 119 hotels (17,700 rooms) or +1.9% to our global
system over the coming years. This further validates the attraction
to hotel owners of joining IHG's enterprise, and boosts confidence
for our net system growth outlook.
In our separate announcement today,
changes to our System Fund arrangements will improve economics for
our owners and the continued growth in ancillary fee streams will
deliver value through our growth algorithm, consistent with our
strategic priorities. The combined power of our platform and
efficiency of our operating model will continue to drive IHG
forward. We are excited about the future and our ability to
capitalise further on our strengths, scale and leading positions,
and on the attractive, long-term demand drivers for our
markets."
Americas
Q1 RevPAR was down -0.3% YOY, with
US RevPAR down -1.9% and up +11.3% in aggregate across Canada,
Latin America and the Caribbean. Occupancy was 63.1%, down
‑1.1%pts, and rate was up +1.5%. Groups demand was strongest,
Leisure was also ahead YOY, and Business revenue was slightly
lower. The timing of Easter led to lower demand in late March
including for Business travel, but was followed by higher demand in
April, such that trading over the last 8 weeks in aggregate has
seen US RevPAR ahead of last year.
Gross system growth was +2.3% YOY
and +0.6% YTD, with 3.1k rooms (26 hotels) opened in the quarter.
Net system size growth was +1.0% YOY and +0.0% YTD. A further 5.1k
rooms (61 hotels) were added to the pipeline, representing a
broadly similar signings pace to the same quarter last year.
Signings included 9 Garner and 8 avid hotels, 11 hotels across the
Holiday Inn Brand Family, a further 25 across our extended stay
brands and 5 across Luxury & Lifestyle.
EMEAA
Q1 RevPAR was up +8.9% YOY, with
occupancy up +2.7%pts to 66.7% and rate up +4.5%. By major
geographic markets within the region, RevPAR ranged from up +16.9%
in Japan, +10.2% in Australia, +7.4% in the Middle East, +6.2% in
Continental Europe, to +2.4% in the UK, reflecting the differing
stages of recovery already achieved by this time last
year.
Gross system growth was +7.2% YOY
and +0.4% YTD, with 1.0k rooms (10 hotels) opened in the quarter.
Net system size growth was +5.7% YOY (+4.8% adjusting for
Iberostar) and -0.2% YTD. There were 5.4k rooms (28 hotels) added
to the pipeline, up from 5.2k in the comparable quarter, with
conversions representing around 38% of all signings and which
included the first 3 Garner properties in Japan that quickly
followed the brand launch across the EMEAA region.
Greater China
Q1 RevPAR was up +2.5% YOY, with
occupancy up +0.7%pts to 53.5% and rate up +1.3%. Tier 1 cities saw
RevPAR up +7.3%, reflecting the continued return of international
travel. The performance in Tier 2-4 cities was down -2.1%, given
tougher comparatives from resurgent demand this time last year and
expanded outbound travel to South East Asia.
Gross system growth was +10.4% YOY
and +1.2% YTD, with 2.1k rooms (10 hotels) opened in the quarter.
Net system size growth was +7.9% YOY. A further 7.2k rooms (40
hotels) were added to the pipeline. Development activity continues
to gain momentum following the extended period of Covid-related
restrictions, with signings up +22% YOY.
At the time of reporting our 2023
full year results on 20 February 2024, IHG announced a new $800m
share buyback programme to return surplus capital to shareholders
in 2024. This follows the $750m programme in 2023 and the $500m
programme announced in 2022 which already reduced the total number
of voting rights in the Company by 6.1% and 5.0%, respectively. The
2024 programme is 30% complete with $239m (£190m) having been
cumulatively spent to date, repurchasing 2.3 million shares. The
2024 programme to date has therefore reduced the total number of
voting rights in the Company by a further 1.4% to 162.9 million as
at market close on Thursday 2 May 2024.
IHG's 2024 share buyback programme
and ordinary dividend payments are expected to return over $1bn to
shareholders during the year. This is equivalent to 7% of IHG's
$14.9bn (£11.7bn) market capitalisation at the start of 2024, and
6.5% of IHG's most recent $16.1bn (£12.8bn) market
capitalisation.
New
agreement that doubles IHG's hotel presence in
Germany
IHG and NOVUM Hospitality announced
on 15 April 2024 a long-term agreement under which 108 open hotels
(15,334 rooms) and 11 hotels under development (2,369 rooms)
are expected to join IHG's system between 2024 and 2028. Conversion
of the open hotels will happen in phases beginning in 2024, with
the majority to take place over the next 24 months. This will
increase IHG's global system size by up to 1.9% over the coming
years. 52 of the hotels will join through a distinctive
collaboration between Holiday Inn and 'the niu', NOVUM Hospitality's stylish,
flagship upper midscale brand. 56 hotels will convert to Garner and
11 to Candlewood Suites, representing European debuts for these two
brands.
Germany is one of Europe's largest
hotel markets, with strong domestic consumption, inbound and
outbound travel. In 2022, there were over 450 million overnight
stays in Germany, the second highest in Europe, and the country
generated the highest number of international outbound travellers
globally, around 100 million.
IHG's growth in Germany will be
supported by continued investment in building localised commercial
platforms, such as the recent introduction of loyalty partnerships
and improved booking systems. IHG expects its increased scale to
bring significant benefits to NOVUM Hospitality and other IHG
owners, including higher brand awareness, direct bookings and
loyalty engagement, to capture both domestic demand and German
outbound business. It will also drive the development of IHG's
brands across more locations.
NOVUM Hospitality will adopt IHG
brands and systems for this entire portfolio, becoming one of IHG's
largest franchisees globally, with access to IHG's powerful
commercial engine and technology platforms to drive hotel
performance, efficient hotel operations and customer experience.
The agreement also includes an exclusivity arrangement for future
NOVUM Hospitality hotels to join IHG's leading brands and
enterprise system.
For further details the full
announcement can be read
here.
Changes to System Fund arrangements
As separately announced today, given
the highly successful growth and development of the IHG One Rewards
loyalty programme, IHG has established new terms that govern
assessment fees that owners pay into the System Fund ('the Fund')
and the sharing arrangements for ancillary fee streams such as
those related to the sale of loyalty points. The Fund is not
managed to a profit or loss for IHG over the longer term, but for
the benefit of hotels in the IHG system. System Fund revenues in
2023 totalled $1,564m, 27% more than five years earlier.
Following a review of IHG's owner
charges, IHG is lowering its standard loyalty assessment fee that
owners pay into the Fund. IHG is also today announcing to owners
other marketing and loyalty programme benefits, including
increasing certain Reward Night reimbursements that owners receive
back out of the Fund when points are redeemed for stays, which will
additionally improve IHG's overall owner offer and owner
economics.
The Fund has received a growing
stream of ancillary revenues such as those from the sale of IHG One
Rewards loyalty points. Historically, IHG
has allowed the full revenue generated on the sale of loyalty
points to be included in the System Fund. A portion of the revenue
from the sale of certain loyalty points, together with certain
other ancillary revenues, will now be recognised by IHG within its
results from reportable segments. Initially 50% of this will be
recognised by IHG in 2024, which is estimated to deliver
approximately $25m incrementally to revenue and operating profit
from reportable segments. This will annualise in 2025 when 100%
will be recognised by IHG. There is also expected to be further
growth in future years as the number of points sold continues to
grow, and due to the ramp-up effect of the IFRS 15 accounting
standard which defers revenue recognition until consumption of the
points previously sold.
As previously set out within the
Company's update on strategic priorities in February 2024, IHG is
actively developing opportunities to grow ancillary fee streams
such as points sales. These also enhance fee margin, and are in
addition to the 100-150bps annual improvement in fee margin on
average over the medium to long term that IHG expects to be
achieved through operational leverage.
IHG's hotel owners benefit from the
substantial scale and efficiency of the System Fund and will
continue to do so as it further grows and as the overall enterprise
achieves new levels of strength. Across all the changes being made
to the System Fund arrangements, IHG and the IHG Owners Association
have worked together to ensure that the overall capacity and
effectiveness of the Fund to invest and spend on behalf of all IHG
system hotels remains strong, and that the operation of the Fund
continues to be on a net nil surplus/deficit basis over the longer
term.
For further details the full
announcement can be read
here.
For
further information, please contact:
Investor
Relations: Stuart
Ford (+44 (0)7823 828 739); Aleksandar Milenkovic (+44 (0)7469 905
720);
Joe Simpson (+44 (0)7976 862 072)
Media Relations:
Neil
Maidment (+44 (0)7970 668 250); Mike Ward (+44 (0)7795 257
407)
Conference call for analysts and institutional
shareholders:
Elie Maalouf, Chief Executive
Officer, and Michael Glover, Chief Financial Officer, will host a
call commencing at 8:30am (London time) on 3 May. The live
listen-only audio webcast can be accessed directly at
https://www.investis-live.com/ihg/660c292172fa7d1300205ced/qgaaa
or via
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:
|
0207 107 0613
|
US:
|
631 570 5613
|
Other international
numbers:
|
|
Passcode:
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43 84 30 99
|
An archived replay is expected to be
available within 24 hours and will remain available, accessed
at www.ihgplc.com/en/investors/results-and-presentations.
Website:
The full release and supplementary
data will be available on our website from 7:00am (London time) on
3 May. 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 19 hotel brands and IHG One
Rewards, one of the world's
largest hotel loyalty programmes, IHG has more than 6,300 open
hotels in over 100 countries, and a development pipeline of over
2,000 properties.
· 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 Express,
Holiday Inn Hotels & Resorts, Garner
hotels,
avid hotels
· Suites:
Atwell Suites,
Staybridge Suites,
Holiday Inn Club Vacations,
Candlewood Suites
· Exclusive
Partners: Iberostar
Beachfront Resorts
InterContinental Hotels Group PLC is
the Group's holding company and is incorporated and registered in
England and Wales. Approximately 345,000 people work across IHG's
hotels and corporate offices globally.
Visit us online for more about
our
hotels and reservations and IHG One
Rewards. To download the new IHG One Rewards app, visit the
Apple App or
Google Play stores.
For our latest news, visit
our
Newsroom and follow us on
LinkedIn.
Appendix 1:
RevPARa movement summary at constant exchange rates
(CER)
|
Q1 2024 vs 2023
(YOY)
|
|
RevPAR
|
ADR
|
Occupancy
|
Global
|
+2.6%
|
+2.3%
|
+0.2%pts
|
Americas
|
-0.3%
|
+1.5%
|
-1.1%pts
|
EMEAA
|
+8.9%
|
+4.5%
|
+2.7%pts
|
Greater
China
|
+2.5%
|
+1.3%
|
+0.7%pts
|
Appendix 2:
RevPARa movement at CER vs actual exchange rates
(AER)
|
Q1 2024 vs 2023
(YOY)
|
|
CER (as
above)
|
AER
|
Difference
|
Global
|
+2.6%
|
+1.9%
|
-0.7%pts
|
Americas
|
-0.3%
|
-0.2%
|
+0.1%pts
|
EMEAA
|
+8.9%
|
+7.8%
|
-1.1%pts
|
Greater
China
|
+2.5%
|
-2.0%
|
-4.6%pts
|
Appendix 3: System and pipeline summary of Q1 2024 YTD and YOY
growths, and closing positions (rooms)
|
System
|
Pipeline
|
|
Openings
|
Removals
|
Net
|
Total
|
YTD%
|
YOY%
|
Signings
|
Total
|
Global
|
6,275
|
(6,096)
|
179
|
946,382
|
+0.0%
|
+3.4%
|
17,666
|
305,405
|
Americas
|
3,101
|
(2,929)
|
172
|
519,766
|
+0.0%
|
+1.0%
|
5,072
|
110,034
|
EMEAA
|
1,042
|
(1,414)
|
(372)
|
246,895
|
-0.2%
|
+5.7%
|
5,371
|
84,682
|
Greater China
|
2,132
|
(1,753)
|
379
|
179,721
|
+0.2%
|
+7.9%
|
7,223
|
110,689
|
a. RevPAR (revenue per available room), ADR (average daily rate)
and occupancy are on a comparable basis, based on comparability as
at 31 March 2024 and includes hotels that have traded in all months
in both the current and the prior year. The principal exclusions in
deriving these measures are new openings, properties under major
refurbishments and removals. See 'Use of key performance measures
and non-GAAP measures' in IHG's full year and half year results
announcements for further information on the
definitions.
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.