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IHG reports ‘good start’ to year

InterContinental Hotels Group is signing new hotels at its fastest rate since the economic downturn nine years ago.

The disclosure came as the hospitality giant revealed a 2.7% rise in revenue per available room in the first quarter of 2017.

The company opened 7,000 new rooms, expanding overall capacity by 3.4% year-on-year to 767,000 rooms.

IHG has also signed 112 new hotels representing 14,000 rooms as part of a future pipeline of 232,000 rooms.

The company claimed its revpar in the UK outperformed the industry in the first three months of the year, growing by almost 8%, with rate up 5% and occupancy rising by 1.8 percentage points. Revpar in London grew by 12%, helped by increased international inbound travel.

Company chief executive Richard Solomans said: “We have made a good start to 2017, with 3.4% net system size growth year-on-year and 2.7% revpar growth driven by increases in both rate and occupancy, and benefitting from the later timing of Easter.

“We continued our focus on building and leveraging scale in our priority markets, opening 49 hotels in the quarter, including our 300th for Greater China, and signing hotels into our pipeline at the fastest rate for the first quarter since 2008.

“We also strengthened our boutique portfolio with the opening of a Hotel Indigo property in downtown Los Angeles.”

He added: “Despite the uncertain economic and political environment in some markets, we remain confident in the outlook for 2017 and our ability to deliver sustainable growth into the future.”

Solomons is to retire from IHG and step down as chief executive on June 30.

He will be succeeded by chief commercial officer Keith Barr, who has worked for the company in various roles for almost 17 years.

Solomons said: “It has been a privilege to have spent the last 25 years working in such a dynamic business and alongside an outstanding executive team, talented colleagues across the business and our dedicated hotel owners.

“I am proud of the success we have achieved since IHG became a standalone business in 2003, not least completing our transition to becoming an asset-light business, launching a series of innovative new hotel brands and new concepts for our heritage brands, acquiring Kimpton Hotels & Restaurants and creating value for shareholders.

“Keith has been an outstanding leader in the business and is clearly the right person to lead IHG to continued future success.”

Barr said: “I am honoured to be appointed CEO of one of the world’s leading hotel companies and to have the opportunity to lead IHG.

“Building on Richard’s leadership and IHG’s strong performance track record, we will continue to focus on developing our portfolio of brands, delivering consistent, high-quality growth and creating value.”

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