TIDMIHG
RNS Number : 5347K
InterContinental Hotels Group PLC
06 May 2022
6 May 2022
InterContinental Hotels Group PLC
2022 First Quarter Trading Update
Highlights
-- Q1 group RevPAR up 61% vs 2021 and attaining 82% of 2019's level
-- Average daily rate up 27% vs 2021 and in line with 2019
-- Americas and EMEAA saw sequentially improved trading in February and March
after a challenging January
-- Greater China trading in March impacted by tightening of localised travel
restrictions
-- Gross system size growth of +4.9% YOY, +0.7% YTD; opened 6.6k rooms (45
hotels) in Q1, broadly similar to 2021
-- Net system size growth of +3.4% YOY (adjusted for Holiday Inn and Crowne
Plaza removals in 2021), +0.5% YTD
-- Global system of 885k rooms (6,028 hotels); 68% across midscale segments,
32% across upscale and luxury
-- Signed 16.6k rooms (120 hotels) in Q1, 15% more than 2021 and 2020; global
pipeline increased to 278k rooms
Keith Barr, Chief Executive Officer, IHG Hotels & Resorts,
said:
"We've seen very positive trading conditions in the first
quarter with travel demand continuing to increase in almost all of
our key markets around the world. The high level of demand we have
seen for leisure travel continues to drive increased rates and
occupancy. We also continue to see a return of business and group
travel, further supporting RevPAR improvements in many of our key
urban markets. As occupancy levels rise and due to the strength of
our brands, our hotels are seeing increased pricing power; in
March, our hotels in the US achieved leisure rates up by more than
10% on 2019 levels and rate across the whole of the US business was
4% ahead. Trading in Greater China continues to be impacted by
restrictions put in place to control rising Covid cases.
Our strategic focus on strengthening and expanding our brand
portfolio continues to drive growth. We signed 17 thousand rooms
into our development pipeline in the first quarter, 15% more than
in 2021. Our pipeline of 278 thousand rooms increased 2.4%. Of the
120 hotels signed, there was a particularly strong performance in
the Americas with a near-doubling of signings from 39 to 73. Luxury
& Lifestyle brands now account for around 20% of all signings,
and following the completion of our quality review in 2021 there
were 52 signings across the Holiday Inn brand family and 14 for
Crowne Plaza, together up 22% on last year. Our net system size is
expanding, and we are pleased with the progress towards our
ambition of delivering an industry-leading level of net rooms
growth."
Regional performance
Americas
Q1 RevPAR was down 8% vs 2019 (up 58% vs 2021). US RevPAR was
down 6% vs 2019. Across the region, occupancy was close to 60%,
down 6%pts on 2019, whilst rate was up 1%. Holiday Inn Express and
our Extended Stay brands exceeded 2019 levels of RevPAR. Demand was
boosted by a strong Spring Break vacation period, with leisure
rooms revenue 10% higher than 2019 for the quarter overall. Leisure
demand is expected to remain strong in the coming quarters.
Together with growth in corporate bookings and more group activity
and events returning, this should support further progress in both
occupancy and rate.
Gross system size growth was +2.7% YOY, with 2.2k rooms (23
hotels) opened in the quarter. Net system size growth was 1.2% YOY
on an adjusted basis (for the Holiday Inn and Crowne Plaza removals
that occurred over the balance of 2021, driven by last year's
review of the estates of these two brands). 7.8k rooms (73 hotels)
were added to the pipeline, representing a further sequential
improvement in the signings pace and exceeding the Q1 signings back
in 2019.
EMEAA
Q1 RevPAR was down 33% vs 2019 (up 122% vs 2021). Occupancy was
approaching 50%, down 21%pts on 2019, whilst rate was down just 4%.
Previous restrictions, particularly on international travel, were
generally being lifted over the course of the quarter in all
markets, though the timing of these still resulted in a broad
spread of performance within the region: Q1 RevPAR was down just 7%
vs 2019 in the Middle East and 15% in the UK, whilst it was still
38% lower in Australia, 45% in Continental Europe, 58% in South
East Asia & Korea and 64% in Japan.
Gross system size growth was +5.7% YOY, with 3.5k rooms (17
hotels) opened in the quarter. Net system size growth was 4.2% YOY
on an adjusted basis. There were 2.3k rooms (15 hotels) added to
the pipeline, around half being conversions.
Greater China
Q1 RevPAR was down 42% vs 2019 (down 7% vs 2021). Occupancy was
36%, down 16%pts on 2019, whilst rate was down 17%. The Winter
Olympics boosted performance around Beijing, though overall Tier
2-4 cities continued to outperform Tier 1 cities. However, in
March, travel restrictions implemented following increased Covid-19
cases led to RevPAR weakening to a 53% decline vs 2019, with around
a third of the estate temporarily closed or repurposed.
Gross system size growth was +11.3% YOY, with 0.9k rooms (5
hotels) opened in the quarter. Net system size growth was 9.9% YOY
on an adjusted basis. There were 6.6k rooms (32 hotels) added to
the pipeline.
Financing update
In April, IHG entered into a new $1.35bn syndicated bank
revolving credit facility (RCF). The previous $1.275bn syndicated
facility and $75m bilateral facility have been cancelled. The
covenant amendments to the previous facility announced in December
2020, which included a relaxation of covenants for the June 2022
and December 2022 and the $400m minimum liquidity covenant, are no
longer in effect.
The new five-year RCF matures in April 2027. Two one-year
extension options are at the lenders' discretion. There are two
financial covenants: interest cover and leverage ratio. Covenants
are tested at half year and full year on a trailing 12-month basis.
Interest cover requires a ratio of Covenant EBITDA to Covenant
interest payable above 3.5:1. The leverage ratio requires Covenant
net debt to Covenant EBITDA below 4.0:1. These covenants now
include the impact of IFRS 16, Leases, which was previously
excluded due to 'frozen GAAP' treatment in the previous
agreement.
For further information, please contact:
Investor Relations: Stuart Ford (+44 (0)7823 828 739); Joe
Simpson (+44 (0)7976 862 072)
Media Relations: Amy Shields (+44 (0)7881 035 550); Claire
Scicluna (+44 (0)7776 778 808)
Conference call for analysts and institutional shareholders:
A conference call with Paul Edgecliffe-Johnson, Chief Financial
Officer and Group Head of Strategy, will commence at 9:00am (London
time) on 6 May 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: 0800 640 6441
UK local: 0203 936 2999
US: +1 855 979 6654
US local: +1 646 664 1960
All other locations: +44 203 936 2999
Passcode: 47 09 62
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: 76 80 66
Website:
The full release and supplementary data will be available on our
website from 7:00am (London time) on 6 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 17 hotel brands and IHG One Rewards , one of
the world's largest hotel loyalty programmes, IHG has around 6,000
open hotels in more than 100 countries, and more than 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 325,000 people work across IHG's hotels and corporate
offices globally.
Visit us online for more about our hotels and reservations and
IHG One Rewards . For our latest news, visit our Newsroom and
follow us on LinkedIn , Facebook and Twitter .
Appendix 1: RevPAR(a) (CER) movement summary
Q1 2022 vs 2021 Q1 2022 vs 2019
RevPAR ADR Occupancy RevPAR ADR Occupancy
------- ------ ---------- -------- -------- -----------
Group 60.8% 26.7% 11.1%pts (17.7)% (0.5)% (11.1)%pts
Americas 57.9% 26.1% 11.8%pts (7.7)% 1.3% (5.7)%pts
EMEAA 122.0% 34.8% 18.8%pts (33.1)% (4.0)% (21.0)%pts
G. China (7.4)% 2.2% (3.8)%pts (41.8)% (16.6)% (16.3)%pts
------- ------ ---------- -------- -------- -----------
Appendix 2: RevPAR(a) movement at constant exchange rates (CER)
vs actual exchange rates (AER)
Q1 2022 vs 2021 Q1 2022 vs 2019
CER AER Difference CER AER Difference
------- ------- ----------- -------- -------- -----------
Group 60.8% 59.9% (0.9)%pts (17.7)% (17.9)% (0.2)%pts
Americas 57.9% 58.0% 0.1%pts (7.7)% (8.2)% (0.5)%pts
EMEAA 122.0% 112.8% (9.2)%pts (33.1)% (34.2)% (1.1)%pts
G. China (7.4)% (5.6)% 1.8%pts (41.8)% (38.5)% 3.3%pts
------- ------- ----------- -------- -------- -----------
Appendix 3: Monthly RevPAR(a) (CER)
2022 vs Jan Feb Mar
2021
----- ------
Group 54.8% 72.3% 56.9%
Americas 53.7% 65.1% 55.7%
EMEAA 92.7% 122.7% 146.1%
G. China 5.6% 36.9% (39.8)%
----- ------ -------
2022 vs Jan Feb Mar
2019
------- -------
Group (24.4)% (18.1)% (12.1)%
Americas (14.2)% (8.2)% (2.6)%
EMEAA (41.9)% (36.6)% (22.5)%
G. China (38.4)% (31.7)% (53.1)%
------- ------- -------
2021 vs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2020
------- ------- ------- ------ ------ ------ ------ ------- ------- ------ -------
Group (51.7)% (47.7)% 20.8% 228.0% 156.7% 108.4% 91.9% 52.8% 55.7% 62.8% 75.8% 77.9%
Americas (44.2)% (44.2)% 20.7% 245.3% 160.4% 108.0% 98.6% 68.3% 63.0% 67.2% 84.7% 92.0%
EMEAA (72.2)% (69.7)% (21.5)% 183.4% 194.1% 165.4% 100.9% 77.8% 82.4% 107.9% 137.1% 112.0%
G. China (21.9)% 335.0% 288.6% 199.6% 107.5% 51.3% 45.3% (43.0)% (15.6)% (8.7)% (30.4)% (14.6)%
------- ------- ------- ------ ------ ------ ------ ------- ------- ------ ------- -------
2021 vs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2019
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Group (52.5)% (53.8)% (46.6)% (41.4)% (37.1)% (31.0)% (18.4)% (23.0)% (21.5)% (19.2)% (19.1)% (12.1)%
Americas (45.1)% (45.4)% (39.4)% (32.3)% (27.8)% (19.7)% (7.3)% (12.1)% (10.6)% (10.5)% (7.4)% 0.4%
EMEAA (71.1)% (72.7)% (70.6)% (70.1)% (65.8)% (59.4)% (48.2)% (38.2)% (42.8)% (36.3)% (33.2)% (30.2)%
G. China (41.5)% (51.1)% (23.2)% (14.9)% (12.0)% (21.5)% (6.4)% (55.2)% (25.9)% (24.6)% (46.3)% (28.1)%
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
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)%
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(a) 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 2022 vs 2021, 2022 vs 2019, 2021 vs 2020, 2021
vs 2019 and 2020 vs 2019. See 'Use of non-GAAP measures' in IHG's
full year results announcement for further information on the
definition of RevPAR.
Appendix 4: System and pipeline summary of Q1 YTD 2022 movements
and total closing position (rooms):
System Pipeline
Openings Removals Net Total YTD% YOY% Adjusted Signings Total
YOY%(b)
--------- --------- ------ -------- ------ ------- --------- --------
Group 6,600 (2,107) 4,493 884,820 +0.5% +0.1% +3.4% 16,628 277,503
Americas 2,204 (260) 1,944 501,033 +0.4% (1.9)% +1.2% 7,759 100,299
EMEAA 3,468 (951) 2,517 226,717 +1.1% +0.1% +4.2% 2,287 79,706
G. China 928 (896) 32 157,070 +0.0% +7.3% +9.9% 6,582 97,498
--------- --------- ------ -------- ------ ------- --------- --------- --------
(b) Adjusting for the removals of Holiday Inn and Crowne Plaza
rooms that occurred later in 2021, driven by the review that was
completed that year with 34.3k (151 hotels) exiting IHG's system
for these two brands for the year as a whole, of which 6.3k (31
hotels) exited in Q1 2021 and 28.0k (120 hotels) exited in the
balance of the year.
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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