
IHG reports double digit operating profit growth in 2012, together with new hotel openings and pipeline developments.
IHG’s RevPAR increased by over 5% in 2012, generating €1.35 billion revenue.Coupled with a 2.7% increase in system size (the number of rooms operating under the company’s brands), this allowed fee revenue to grow by 6.8%, and converted into a 10% increase in operating profit. In addition, the UK based group announced 226 new hotels and the launch of two new brands as further milestones achieved.“2012 was another year of significant progress for IHG with our preferred brands driving RevPAR up 5.2%. Along with a 2.7% increase in our room count, increasingly fuelled by expansion in developing markets, we’ve been able to deliver a significant rise in fee revenue - the key measure of success in our core business of franchising and managing hotels,” comments Chief Executive, IHG, Richard Solomons.The Americas, home to 77% of IHG’s hotels, performed particularly well, increasing system size by 2% and outperforming the industry in RevPAR growth in the US, despite uncertainty created by the presidential election and the dangers of the so called fiscal’ cliff. In Europe, RevPAR increased 1.7% overall, with revenues up 8%. The UK outperformed the industry with a 2.5% growth in RevPAR. Germany also performed well, with RevPAR up 5.4%, on the back of a strong trade fair schedule. Greater China produced a 21% increase in operating profit – the result of new hotels opening and RevPAR growth of 5.4% (significantly outperforming the industry). Meanwhile, across Asia, Middle East and Africa RevPAR grew 4.9%. South East Asia, Saudi Arabia and the UAE were the strongest performing markets, with RevPAR up 8.3%, 8% and 5.5% respectively.With regards to new hotel openings and signings, 226 new hotels (34,000 rooms) were opened, taking IHG’s global hotel count to 4,602 (676,000 rooms). 2012 also saw a number of important achievements on this front including the launch of two innovative new concepts never previously seen in the hotel industry; HUALUXE Hotels & Resorts and EVEN Hotels.Future growth prospects also remain strong with the company signing nearly one hotel a day (356 hotels, 54,000 rooms) into their development pipeline. Global development pipeline now stands at 1,053 hotels (169,000 rooms), giving the company a 12% share of all active hotel projects worldwide. According to the group, this will also create 90,000 new jobs worldwide.Part of this includes expansion in India, announcing it has signed 13 new hotels, boosting its existing pipeline in the country to 47. The announcement was made in a trade mission to India with British Prime Minister David Cameron to boost trade ties between the two countries. “India is an extremely important market for IHG. We have our second largest pipeline in Asia Pacific here after China. With international tourism increasing year on year and the continued strength of domestic tourism, we see incredible opportunities for growth,” explains chief executive officer, IHG Asia, Jan Smits.IHG currently has a 5% share of global hotel rooms, highlighting the increase in market share the company can expect over the coming years. 50% of these hotels are in developing markets, compared to just 19% of rooms currently open, highlighting the shift in business mix towards developing markets where demand is growing at its fastest.“Whilst the global economy continues to present challenges in the immediate future, IHG has an exceptionally strong platform for sustained high quality growth in the future. Thanks to our preferred brands, strong delivery systems and hard-working colleagues around the world, I’ve got every confidence that IHG’s next ten years will be just as successful as our first decade,” adds Solomons.