TIDMIHG
RNS Number : 7356Q
InterContinental Hotels Group PLC
20 October 2023
20 October 2023
InterContinental Hotels Group PLC
2023 Third Quarter Trading Update
Highlights
-- Q3 group RevPAR +10.5% vs 2022, with Americas +4.1%, EMEAA +15.9%
and Greater China +43.2%
-- Q3 group RevPAR +12.8% vs 2019, with Americas +13.8%, EMEAA +17.5%
and Greater China +9.3%
-- Average daily rate +4.1% vs 2022, +14.8% vs 2019; occupancy +4.1%pts
vs 2022, (1.3)%pts vs 2019
-- Gross system size growth +6.2% YOY, +3.1% YTD; opened 7.7k rooms (50
hotels) in Q3, similar to 2022
-- Net system size growth +4.7% YOY, +2.0% YTD; excluding Iberostar,
+2.9% YOY, +1.6% YTD
-- Global system of 930k rooms (6,261 hotels); 67% across midscale segments,
33% across upscale and luxury
-- Signed 16.8k rooms (123 hotels) in Q3, +27% vs 2022; global pipeline
of 292k rooms (1,978 hotels), +5.1% YOY
-- On track to have returned $1.0bn to shareholders in 2023 through share
buybacks and dividend payments
Elie Maalouf, Chief Executive Officer, IHG Hotels & Resorts,
said:
"Travel demand remained very healthy during the quarter, and I
would like to thank all our teams for supporting another strong
trading period. Q3 RevPAR increased 10% versus 2022 and 13% versus
2019, representing the fifth quarter of sequential improvement
exceeding pre-pandemic highs. Greater China continued its excellent
rebound with RevPAR now above 2019, which the Americas achieved in
the second quarter of last year and EMEAA in the fourth quarter.
Group-wide occupancy was 72%, just one percentage point behind 2019
which further confirms the near-complete return to pre--Covid
levels of demand. Pricing remained very robust. As well as
year--on--year RevPAR growth in each of our three regions, it was
also pleasing to see rooms revenue growth for each of leisure,
business and group travel.
We opened nearly eight thousand rooms across 50 hotels in the
quarter, and added 17 thousand rooms to our pipeline across 123
properties. Year to date, signings are up by 16%. Reflecting the
breadth and attractiveness of our portfolio, 'quicker to market'
conversions have increased this year to be over one-third of
openings and signings. This will soon be further boosted by our new
midscale conversion brand, Garner, which became franchise--ready in
September. There was good development progress across all our
categories, and our six Luxury & Lifestyle brands continue to
represent a growing proportion of IHG with over 800 open and
pipeline hotels in that category.
As IHG powers forward to provide industry-leading advantages for
our guests and hotels owners across our brand portfolio, loyalty
programme and entire enterprise platform, we expect to close-out
2023 with very strong financial performance. Looking further ahead,
whilst there are macro-economic uncertainties and some short-term
financing challenges holding back new hotel development, I am
excited about the future for IHG and the attractive, long-term
demand drivers for our markets. As such, we're confident in the
strengths of IHG's business model, scale and in our strategic
priorities to capture sustainable, profitable growth."
Regional performance
Americas
Q3 RevPAR was up +4.1% vs 2022 (up +13.8% vs 2019), with US
RevPAR up +3.1% (up +11.8% vs 2019). Occupancy was 72%, up +0.7%pts
on last year (down (0.6)%pts vs 2019), whilst rate was up +3.1% (up
+14.8% vs 2019). Leisure rooms revenue in Q3 for the total estate
was +3% higher than last year, and up +22% on 2019 levels, driven
by another strong summer vacation period.
Gross system size growth was +3.9% YOY, with 2.0k rooms (18
hotels) opened in the quarter. Net system size growth was +2.9%
YOY. A further 5.1k rooms (55 hotels) were added to the pipeline.
Signings included eight avid hotels, 16 hotels across the Holiday
Inn Brand Family, and a further 26 across our extended stay
brands.
EMEAA
Q3 RevPAR was up +15.9% vs 2022 (up +17.5% vs 2019). Occupancy
was 73%, up +4.7%pts on last year (and down (4.0)%pts vs 2019),
whilst rate was up +8.6% (up +23.9% vs 2019). By major geographic
markets within the region, Q3 RevPAR vs 2019 ranged from up +31% in
Continental Europe, +18% in the UK, and +16% in Australia, to down
just (1)% in the Middle East and (4)% in Japan.
Gross system size growth was +10.0% YOY, with 2.0k rooms (11
hotels) opened in the quarter. Net system size growth was +8.4% YOY
(+5.2% excluding Iberostar). There were 4.8k rooms (31 hotels)
added to the pipeline, with conversions representing around 40% of
these. Luxury & Lifestyle brands performed strongly, also
representing 40% of all signings.
Greater China
Q3 RevPAR was up +43.2% vs 2022 (up +9.3% vs 2019). Occupancy
was 67%, up +14.1%pts (and up +2.3%pts vs 2019), whilst rate was up
+13.0% (up +5.6% vs 2019). Tier 1 cities saw RevPAR vs 2019 down
(3)%, reflecting the more gradual return of international travel;
the performance was stronger across Tier 2-4 cities which were up
+13%.
Gross system size growth was +8.1% YOY, with 3.6k rooms (21
hotels) opened in the quarter. Net system size growth was +5.5%
YOY. A further 6.9k rooms (37 hotels) were added to the pipeline.
As development activity continues to improve following the extended
period last year of Covid-related restrictions in the region, this
was the highest quarterly signings performance since 2021.
Share buyback and capital allocation update
As announced in February 2023, a $750m share buyback programme
is returning surplus capital to shareholders. This follows the
$500m programme announced in 2022 which already reduced the total
number of voting rights in the Company by 5.0%. The current 2023
programme is 94% complete with $704.7m (GBP561.2m) having been
cumulatively spent to date, repurchasing 10.1 million shares at an
average price of GBP55.76 per share. The 2023 programme to date has
therefore reduced the total number of voting rights in the Company
by a further 5.7% to 165.3 million as at market close on Thursday
19 October 2023.
IHG's 2023 share buyback programme, together with ordinary
dividend payments, will have returned $1.0bn to shareholders during
the year. This is equivalent to 10% of IHG's $10.0bn (GBP8.3bn)
market capitalisation at the start of 2023, and more than 8% of
IHG's most recent $12.4bn (GBP10.2bn) market capitalisation.
IHG's perspectives on the uses of cash generated by the business
remain unchanged: ensuring the business is investing to optimise
growth that will drive long-term shareholder value creation,
funding a sustainably growing dividend, and then returning surplus
capital to shareholders, whilst targeting our leverage ratio within
a range of 2.5-3.0x net debt:adjusted EBITDA to maintain an
investment grade credit rating. Having already returned $500m of
surplus capital via the 2022 programme and $750m which is being
returned over the course of 2023, the highly cash generative nature
of our business model means we expect to have significant ongoing
capacity to return further surplus capital to shareholders, both in
the ordinary course and as we look to move leverage into our target
range over time. The Board's next assessment in relation to the
amounts, mechanisms and timings of future capital returns will be
carried out in early 2024, taking into account macro-economic
conditions and the trading outlook at that time. Our next capital
allocation update will therefore be communicated as part of the
2023 Full Year Results to be announced on Tuesday 20 February
2024.
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 9:00am (London
time) on 20 October. The live listen-only audio webcast can be
accessed directly at
https://www.investis-live.com/ihg/65083b4e6dedf60c006bf2d6/xowlw 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 local: 0207 107 0613
US local: 631 570 5613
Other international Click here
numbers:
Passcode: 42 73 27 07
An audio replay will also be available for 7 days using the
following details:
UK local: 0203 608 8021
US local: 412 317 0088
Other locations: +44 203 608 8021
Passcode: 20 23 03 54#
Website:
The full release and supplementary data will be available on our
website from 7:00am (London time) on 20 October. 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 over 6,200
open hotels in more than 100 countries, and nearly 2,000 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 , 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 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: RevPAR(a) movement summary at constant exchange
rates (CER)
Q3 2023 vs 2022 Q3 2023 vs 2019
RevPAR ADR Occupancy RevPAR ADR Occupancy
Group 10.5% 4.1% 4.1%pts 12.8% 14.8% (1.3)%pts
Americas 4.1% 3.1% 0.7 %pts 13.8% 14.8% (0.6) %pts
EMEAA 15.9% 8.6% 4.7 %pts 17.5% 23.9% (4.0) %pts
Greater
China 43.2% 13.0% 14.1 %pts 9.3% 5.6% 2.3 %pts
Q3 YTD 2023 vs 2022 Q3 YTD 2023 vs 2019
RevPAR ADR Occupancy RevPAR ADR Occupancy
Group 18.9% 6.1% 7.4%pts 10.2% 12.2% (1.3)%pts
Americas 8.7% 5.0% 2.4 %pts 12.6% 12.7% 0.0 %pts
EMEAA 31.0% 12.8% 9.7 %pts 14.1% 20.9% (4.1) %pts
Greater
China 71.3% 17.4% 19.4 %pts 0.8% (0.5)% 0.8 %pts
Appendix 2: RevPAR(a) movement at CER vs actual exchange rates
(AER)
Q3 2023 vs 2022 Q3 2023 vs 2019
CER (as AER Difference CER (as AER Difference
above) above)
Group 10.5% 11.0% 0.5%pts 12.8% 10.3% (2.5)%pts
Americas 4.1% 4.4% 0.3 %pts 13.8% 13.6% (0.2) %pts
EMEAA 15.9% 19.1% 3.2 %pts 17.5% 10.4% (7.1) %pts
Greater
China 43.2% 35.5% (7.7) %pts 9.3% 6.1% (3.2) %pts
Q3 YTD 2023 vs 2022 Q3 YTD 2023 vs 2019
CER (as AER Difference CER (as AER Difference
above) above)
Group 18.9% 18.3% (0.6)%pts 10.2% 7.6% (2.6)%pts
Americas 8.7% 8.8% 0.1 %pts 12.6% 12.2% (0.4) %pts
EMEAA 31.0% 30.0% (1.0) %pts 14.1% 6.9% (7.2) %pts
Greater
China 71.3% 61.9% (9.4) %pts 0.8% (1.4)% (2.2) %pts
Appendix 3: Monthly RevPAR(a) (CER)
2023 vs Jan Feb Mar Apr May Jun Jul Aug Sep
2022
Group 40.8% 33.5% 27.2% 21.7% 17.0% 13.3% 9.5% 10.4% 11.6%
5.9 6.9 4.7 2.8 3.9 5.7
Americas 24.5% 18.3% 13.8% % % % % % %
36.7 22.7 16.1 15.7
EMEAA 84.0% 71.9% 44.5% % 24.2% % 16.1% % %
Greater 171.4 106.9 68.4 40.5 38.5 54.2
China 53.3% 54.2% 125.2% % % % % % %
2023 vs Jan Feb Mar Apr May Jun Jul Aug Sep
2019
Group 4.2% 6.7% 9.2% 9.5% 9.3% 10.9% 12.8% 11.1% 14.5%
11.5 11.8 13.0 12.5 10.9 18.2
Americas 8.8% 11.0% 13.1% % % % % % %
12.6 15.6 16.7 19.0 17.0 16.6
EMEAA 8.2% 7.7% 13.0% % % % % % %
Greater 5.0 (6.4) (0.1) 14.0 9.3 3.3
China (16.6)% (3.8)% (6.6)% % % % % % %
Appendix 4: System and pipeline summary of Q3 2023 YTD and YOY
growths, and closing positions (rooms)
System Pipeline
Openings Removals Net Total YTD% YOY% Signings Total
Group 28,688 (10,328) 18,360 929,987 +2.0% +4.7% 50,940 292,467
Americas 6,210 (4,744) 1,466 516,962 +0.3% +2.9% 18,416 106,788
EMEAA 14,372 (2,898) 11,474 241,138 +5.0% +8.4% 14,766 79,256
Greater
China 8,106 (2,686) 5,420 171,887 +3.3% +5.5% 17,758 106,423
(a.) RevPAR (revenue per available room), ADR (average daily
rate) and occupancy are on a comparable basis, based on
comparability as at 30 September 2023 and includes hotels that have
traded in all months in both the current and the prior year. This
same group of hotels is also used to compare RevPAR performance for
2023 vs 2019. 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.
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