IHG profits jump 10% in 2012

InterContinental Grand Stanford, Hong Kong

InterContinental Hotels Group (IHG) achieved a strong 10% rise in profits last year.

The company generated a full-year operating profit of US$614 million in 2012, up from US$559m in 2011. The company’s revenue per available room (revPAR) increased 5.2% year-on-year, driven by a 3.2% rise in average daily rates (ADR).

But perhaps surprisingly, IHG’s main growth market last year was the US, with revPAR in the country rising 6.3% – the strongest growth of any region. This growth even exceeded that of Greater China, where revPAR climbed 5.4%. In Asia, the Middle East & Africa (AMEA), revPAR increased 4.9%, as strong trading in Southeast Asia and Japan was offset by a slowdown in some Middle Eastern markets. AMEA’s operating profit rose 5% to US$88m while Greater China’s profits jumped 21% to US$81m.

IHG also saw a 2.7% net increase in its global room inventory in 2012, fuelled by growth in emerging markets. IHG’s chief executive, Richard Solomons, said he was pleased with the “significant progress” made by the company in 2012.

“The financing environment remained tough through 2012 in many of our key markets, but we still signed on average one hotel a day into our pipeline. This reflects the excellent relationship we enjoy with our owners and further strengthens our foundation for high quality growth,” said Solomons.

Last year, IHG signed 8,000 new rooms in the AMEA region, plus another 8,000 in Greater China. It also launched two new brands in 2012 – the China-focused Hualuxe Hotels & Resorts, and the US-led wellness brand Even Hotels. IHG now operates a total of 675,982 rooms, including 62,737 in AMEA and 61,601 in Greater China. It also has a global pipeline totalling 169,030 rooms.

“IHG’s proven strategy and resilient business model position us for further good performance in 2013, despite the challenging economic environment,” Solomons added.