InterContinental Hotels Group (IHG) posted improved financial results for the first half of 2012, driven by the strong performance of its hotels in Asia Pacific.
In its half-year results, released today (Tuesday 7 August), IHG revealed that its operating profits have climbed 6% to US$286 million, driven by a 3% increase in revenues, to US$878m. These revenues were driven by hotels in the Asia Pacific region, which outperformed those in the Americas and, most notably, Europe.
IHG’s revenue per available room (revPAR) in the Asia, Middle East & Africa region (AMEA) jumped 8.8% in the first six months of the year, following a 2.7% rise in average room rates and a 3.9% increase in occupancy levels. This was nearly matched by the performance of the Greater China region, which saw revPAR jump 7.9%, mainly driven by a 4.1% rise in room rates. This contrasts sharply to the performance of the European market, which saw revPAR edge up just 1.5%.
The AMEA and Greater China regions still lag behind the Americas and Europe in terms of profit, mainly due to the size of the company’s regional portfolios, but the speed of growth is much faster. Operating profits for IHG AMEA climbed 11.1% to US$40m in the first half of the year, while in China profits surged 20.0% to US$36m. These two regions now account for more than a quarter (26.6%) of IHG’s global income.
“We have delivered good results in the first half with revPAR growth from all regions through gains in both occupancy and rate. Our brands continue to perform well and we have achieved solid underlying margin growth, resulting in increased profits and strong cash flows,” said IHG’s CEO, Richard Solomons.
“We continue to invest for growth, strengthening both our existing and our new brands, including Even Hotels and Hualuxe Hotels & Resorts. While the global economic environment remains uncertain, IHG continues to trade well and we are confident that our strategy will deliver high quality growth into the future.”
In the AMEA region, IHG signed six hotels comprising 1,395 rooms in the half of 2012, and opened seven hotels (1,868 rooms), including the region’s first Crowne Plaza resort, located in Phuket, and Southeast Asia’s first Holiday Inn Express hotel in Bangkok. In Greater China, the company signed 19 new hotels comprising almost 5,000 rooms in the first half of the year, and opened eight.