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IHG reports 10% growth in Operating profits and 4.4% growth in fee revenues

Reports market outperforming growth in India market

Wednesday, February 22, 2017, 11:25 Hrs  [IST]
HBI Staff |New Delhi

InterContinental Hotel Group (IHG), world’s leading hotel companies, has reported “strong performance” for the 12 months ended on December 31, 2016, with their asset-light business model continuing to deliver results.

According to company’s provisional report for the year, RevPAR (revenue per available room) grew 1.8%, with underlying fee revenue rising 4.4% to $1.4 billion and underlying operating profit increasing by almost 10% to $702 million.

Alongside an 11% increase in total annual dividend, the company announced a $400 million special dividend, taking total returns to shareholders to $12.8 billion since it became a standalone business in 2003.

Among the regional markets, while IHG’s Asia, Middle East & Africa (AMEA) region saw a RevPAR decrease of 0.2%. Performance outside the Middle East remained strong, particularly in India, where, according to the report, the IHG hotels continued to “outperform the market.”

IHG’s largest region, the Americas, saw comparable RevPAR growth of 2.1%, driven by a 2.0% rate growth. US RevPAR increased by 1.8%. In Europe, comparable RevPAR grew by 1.7%. UK RevPAR increased by 2.6%, led by a robust fourth quarter. In Germany, RevPAR was up 6.8%, the report says.

 In Greater China, RevPAR increased by 2.2%, with growth of 3.9% in mainland China.

Richard Solomons, Chief Executive Officer, IHG, commented: “Our results clearly demonstrate our strong operational performance and the success of IHG’s long-term strategy, which have delivered a 9.5% increase in underlying profit and a 23% increase in underlying EPS. Our cash generative business model underpins our decision to announce a $400 million special dividend and to propose an 11% increase in the total dividend for the year.

We continued our focus on enhancing the long-term sustainability of our competitive advantage by evolving our brand portfolio and by driving innovation in our digital and loyalty offer. We rolled out new formats across our Holiday Inn Brand Family which deliver significant uplifts in guest satisfaction and improved returns for owners, built momentum for our HUALUXE and EVEN Hotels brands, and took Kimpton Hotels & Restaurants and Hotel Indigo into new markets. We also strengthened our loyalty proposition through initiatives including ‘Your Rate’ helping to drive a 16% increase in member enrolments.

The fundamentals for the hospitality industry remain compelling. Despite the uncertain environment in some markets, we remain confident in the outlook for the year ahead, as well as our ability to deliver sustainable growth into the future.”

 
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