ΔΙΕΘΝΗΣ ΕΛΛΗΝΙΚΗ ΗΛΕΚΤΡΟΝΙΚΗ ΕΦΗΜΕΡΙΔΑ ΠΟΙΚΙΛΗΣ ΥΛΗΣ - ΕΔΡΑ: ΑΘΗΝΑ

Ει βούλει καλώς ακούειν, μάθε καλώς λέγειν, μαθών δε καλώς λέγειν, πειρώ καλώς πράττειν, και ούτω καρπώση το καλώς ακούειν. (Επίκτητος)

(Αν θέλεις να σε επαινούν, μάθε πρώτα να λες καλά λόγια, και αφού μάθεις να λες καλά λόγια, να κάνεις καλές πράξεις, και τότε θα ακούς καλά λόγια για εσένα).

Τετάρτη 10 Αυγούστου 2022

IHG reports 50.7% H1 RevPAR increase

 

IHG Hotels & Resorts, during the first half ended June 30, reported a group RevPAR increase of 50.7% versus the same period a year ago, but down 10.5% versus the same period in 2019. However, Q2 RevPAR was up 3.5% vs. the same period in 2019.

“We saw continued strong trading in the first half of 2022 with increased demand for travel in most of our markets,” said Keith Barr, CEO, IHG Hotels & Resorts. “This brought group RevPAR very close to pre-pandemic levels in the second quarter. Alongside leisure stays, the return of business and group travel demand continued to build over the period, and our hotels are seeing increased pricing power due to the strength of IHG’s brands, loyalty program and technology platform.”

He continued, “The recovery in demand and pricing led to group profit more than doubling versus 2021, with profitability in the Americas now ahead of 2019. The EMEAA region also saw excellent improvement in performance. While Greater China had a tough period as COVID-related travel restrictions were tightened, we have since seen a strong recovery in the most recent months, although risk of further volatility in trading in the region still remains.”

Highlights:

  • Americas Q2 RevPAR vs 2019 +3.5%, strong sequential improvement also in EMEAA to (10.3)%; Greater China (48.9)% due to localized travel restrictions
  • H1 ADR +24% vs 2021, up +4% vs 2019; occupancy +10% pts vs 2021, (10)%pts vs 2019
  • Gross system growth +4.8% YOY, net +3.0% YOY (adjusted for Holiday Inn and Crowne Plaza removals in H2 2021, and the impact of exiting Russia in H1 2022)
  • Opened 14,900 rooms (96 hotels) in H1; global estate now at 883,000 rooms (6,028 hotels)
  • Signed 30,700 rooms (210 hotels) in H1; global pipeline now at 278,00 rooms (1,858 hotels)
  • Luxury & Lifestyle portfolio now 445 hotels, 12% of system size; a further 287 hotels represent 19% of group pipeline
  • Operating profit from reportable segments of $377 million, +101% vs 2021, (down (8)% vs 2019); reported operating profit of $361 million, after System Fund result of $3 million and operating exceptionals of $(19) million
  • Net cash from operating activities of $175 million (2021: $173 million), with adjusted free cash flow of $142 million (2021: $147 million); net debt reduction of $163 million since the start of the year includes $227 million of net foreign exchange benefit
  • Trailing 12-month adjusted EBITDA of $812 million, +78% on a year earlier; net debt: adjusted EBITDA reduced to 2.1x

“Our overall performance reflects a continued focus to build a stronger business for our guests and owners,” Barr said. “We have significantly enhanced and expanded our brand portfolio in recent years, and invested in our enterprise platform to drive performance and accelerate our growth. The investments we have made to innovate our technology and distribution channels continue to drive improvements in both the guest experience and owner returns. Some of the biggest achievements this year include the critical step of transforming our loyalty program, IHG One Rewards, and the redesign of our mobile app and digital channels to deliver a faster, simpler booking experience.”

He added, “We opened almost 100 hotels in the half, passing the 6,000 milestone globally, and signed more than 200 properties to take our pipeline to 1,858, representing more than 30% of today’s system size. We continue to see growing interest in conversion opportunities which represented more than a quarter of openings in the period. This illustrates the increasing appeal to hotel owners of accessing IHG’s brands and the significant scale and demand delivery capability of our enterprise platform.

Americas
H1 Comparable RevPAR was up +45% vs 2021 (down 1.6% vs 2019). Trading in January was challenging given the initial impacts on travel volumes as a result of the Omicron variant of COVID-19; sequential improvements in RevPAR resumed in February. Leisure demand continued to be strongest, with business demand strengthening as the period went on with more corporate bookings and group activity and events returning. Q2 RevPAR was up +37% vs 2021 (up +3.5% vs 2019) with occupancy of 70%; occupancy was four percentage points lower than 2019, which was more than offset by rate 9% higher than 2019 levels. U.S. Q2 RevPARb was up +3.9% vs 2019, with occupancy four percentage points lower and rate 9% higher than 2019 levels. As the recovery has broadened, the range of performance has narrowed. Across the U.S. franchised estate, which is weighted to domestic demand in upper-midscale hotels, Q2 RevPAR increased by +5% vs 2019. The U.S. managed estate, weighted to upscale and luxury hotels in urban locations, declined by (2)% vs 2019.

Revenue from the reportable segments in H1 increased by $146 million (+45%) to $471 million (a decrease of $49 million or 9% vs 2019). Operating profit increased by $131 million to $351 million, driven by the increase in revenue. Operating profit from the reportable segments increased by $127 million (+57%) to $351 million (an increase of $7 million or 2% vs 2019). There were $7 million of incentive management fees recorded for the period (2021: $4 million; 2019: $7 million).

Fee business revenues increased by $117 million (+40%) to $413 million. Fee business operating profits increased by $106 million (+45%) to $342 million, driven by the improvement in trading. Also benefiting from the prior delivery of sustainable fee business cost savings, H1 fee margins increased to 82.8%, compared to 79.7% in 2021 and 77.3% in 2019. Operating profit from the reportable segment included $2 million of ongoing support received in the form of tax credits which relate to the group’s corporate office presence in certain locations, down from $5 million benefit in the comparable period.

Owned, leased and managed lease revenue increased by $29 million to $58 million, with comparable RevPAR up 120% (down 23% vs 2019) leading to an owned, leased and managed leased operating profit of $9 million compared to a $12 million loss in the comparable period. Excluding the results of three owned EVEN hotels which were disposed and retained under franchise contracts in November 2021, revenue increased by $34 million and operating profit improved by $17 million.

Gross system size growth was +2.3% year-on-year. IHG opened 4,300 rooms (42 hotels) during the first half, including 25 hotels across the Holiday Inn brand family. There were five avid hotels opened, including Fort Lauderdale Airport, and four Hotel Indigo properties. The first two Atwell Suites properties opened in Miami and Denver. There were 2,200 rooms (17 hotels) removed in the first half.

Net system size declined 1.8% year-on-year; on an adjusted basis (for the Holiday Inn and Crowne Plaza removals that occurred in the second half of 2021, driven by last year’s review of the estates of these two brands), net system size growth was +0.6%.

There were 11,500 rooms (108 hotels) signed during the first half (including 3,700 (35 hotels) during Q2). There were 45 hotel signings across the Holiday Inn brand family and 38 across Staybridge Suites and Candlewood Suites. Other notable signings included a strong period for Kimpton with four signings, nine further avid hotels and four further Atwell Suites.

The pipeline stands at 100,400 rooms (959 hotels), which represents 20% of the current system size in the region.

EMEAA
H1 Comparable RevPAR was up +138% vs 2021 (down 20.9% vs 2019). The industry faced some renewed challenges to travel volumes at the start of the year from the Omicron variant of COVID-19. However, from February and over subsequent months, easing of previous restrictions on international travel contributed to strong sequential improvements in RevPAR. Leisure stays and transient business were the strongest categories, with corporate bookings and group activity picking up in their pace of recovery as the period went on. Q2 RevPAR was up +147% vs 2021 (down 10.3% vs 2019) with occupancy of 64%; occupancy was 10 percentage points lower relative to 2019, partially offset by rate 4% higher than 2019 levels. Variance in performance within the region continued to predominantly reflect the timing of the lifting of restrictions. The U.K., which saw one of the earlier easings of restrictions, saw RevPAR down (8)% in H1 vs 2019 and down 2% in Q2 vs 2019. Strong improvements in London trading saw Q2 RevPAR down 10% vs 2019, rapidly closing the performance gap with the provinces which saw RevPAR up +1% vs 2019. Elsewhere, Q2 RevPAR vs 2019 was down 3% in Australia, 6% in Continental Europe, 8% in the Middle East, 34% in South East Asia & Korea and 50% in Japan.

Revenue from the reportable segments in H1 increased by $155 million (+185%) to $239 million (a decrease of $99 million or 29% vs 2019). Operating profit increased by $67 million to a $40 million profit, driven by the increase in revenue, partially offset by $19 million of operating exceptional charges relating to ceasing all operations in Russia. Operating profit from the reportable segments increased by $86 million to a $59 million profit (a decrease of $29 million vs 2019). There were $25 million of incentive management fees recorded for the period (2021: $11 million; 2019: $41 million). Revenue and operating profit from the reportable segments also included the benefit of a $7 million individually significant liquidated damages settlement.

Fee business revenues increased by $68 million (+128%) to $121 million. Fee business operating profits increased to a $63 million profit from a $3 million loss in the comparable period, driven by the improvement in trading. Together with the prior delivery of sustainable fee business cost savings, H1 fee margins was 49.1%, compared to -5.7% in 2021 and 57.8% in 2019.

Owned, leased and managed lease revenue sharply increased by $87 million to $118 million, with comparable RevPAR up 423% (down 36% vs 2019) leading to an owned, leased and managed leased operating loss that decreased to $4 million compared to a $24 million loss in the comparable period. The lifting of travel restrictions, predominantly in the U.K., began to ease the trading challenges on this largely urban-centered portfolio. Excluding the result of one InterContinental hotel which was disposed of in January, revenue increased by $91 million and operating loss decreased to $6 million.

Gross system size growth was +7.3% year-on-year. IHG opened 6,800 rooms (35 hotels) during the first half. There were 16 openings across the Holiday Inn brand family, including resort locations such as Holiday Inn Resort Ho Tram Beach (Vietnam) and Holiday Inn & Suites Sydney Bondi Junction, and urban locations such as Holiday Inn Express Auckland City Centre (Australia) and at Cambridge West in the U.K. There were eight voco properties opened, including Doha West Bay, Johannesburg and a flagship new-build at Melbourne Central. Other notable openings included InterContinental properties in Bali, Ras Al Khaimah and Appi Kogen Resort, Japan, and the first Vignette Collection hotel to open in Asia at Sindhorn Midtown Hotel Bangkok. There were 8,800 rooms (36 hotels) removed in the first half, of which 6,500 (28 hotels) related to our ceasing of operations in Russia.

Net system size declined 0.6% year-on-year; on an adjusted basis (for the Holiday Inn and Crowne Plaza removals that occurred in the second half of 2021, driven by last year’s review of the estates of these two brands, and also adjusting for the removal of hotels in Russia following IHG’s announcement regarding ceasing all operations in that country), net system size growth was +5.2%.

There were 8,100 rooms (49 hotels) signed during the first half (including 5,800 (34 hotels) during Q2). This included 14 across the Holiday Inn brand family and a particularly strong period for the InterContinental brand with seven signings. Other notable signings included the fourth Kimpton in Thailand with Kimpton Hua Hin Resort, voco Osaka Central (the first for the brand in Japan) and a three-brand portfolio signing in Vietnam, bringing the Hotel Indigo, Crowne Plaza and Holiday Inn Express brands to Hoi An and its UNESCO world heritage site.

The pipeline stands at 80,100 rooms (425 hotels), which represents 36% of the current system size in the region.

Tags: first-half results, Holiday Inn Resort Ho Tram Beach, IHG Hotels & Resorts, Keith Barr, Quarterly Results