InterContinental Hotels Group operating profit surge 23% in 1Q11

First quarter global RevPAR grew 6.9%, including rate growth of 1.9%, said IHG.

Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC said: "We delivered a strong set of results in the first quarter. Global revenue per available room (RevPAR) grew 6.9%, with 18.8% growth in Greater China and 8.4% in the US, the highest growth in the US since the second quarter 2006. Underlying revenue growth of 6% was converted to 23% operating profit growth, reflecting good use of our scale and the efficiency of our business model.

"Our strategy to free up capital to drive growth for our brands is on track. Post quarter end we sold two hotels in the US, with proceeds substantially above book value. We have recently committed to enter into a joint venture with Duet Hotels to take Holiday Inn Express into India, developing 19 new hotels by 2016.

"During the quarter, we welcomed The Venetian and The Palazzo Las Vegas into our system as our first InterContinental Alliance Resorts, boosting room supply by almost 7,000 and we continue to look for further opportunities of this kind.

Asia Pacific Regional Highlights

RevPAR increased 9.9%, including rate growth of 4.8%. Excluding Japan (33 hotels) where the earthquake and resultant events negatively impacted March growth, RevPAR grew 13.6%. Greater China continues to be our strongest market with RevPAR up 18.8%, including rate growth of 9.9%.

Revenue increased 16% (13% at CER) to $80m and operating profit increased 39% to $25m. This was predominantly driven by RevPAR growth and the contribution from a 6% year on year increase in rooms.

IHG signed 915 rooms (5 hotels) in the quarter, three of which were in Thailand including an InterContinental resort on the West coast of Koh Samui and a Hotel Indigo on Phuket Naithon beach. In April we signed a further 7 deals, including three in India and three in Indonesia. Key openings included the InterContinental Kuala Lumpur and Crowne Plaza West Hanoi, the first hotels opened under those brands in Malaysia and Vietnam respectively.

Total system size of 652,456 rooms (4,422 hotels), up 0.1% year on year with 15,153 rooms (53 hotels) added, including 6,986 rooms (2 hotels) from the first InterContinental Alliance Resorts; and 9,858 rooms (68 hotels) removed.

Signings of 8,399 rooms (63 hotels) were ahead of Q1 2010 and almost half were conversions. Total pipeline of 191,182 rooms (1,236 hotels) of which 26% are in Greater China.

2011 net system growth will be modest as previously disclosed due to the final Holiday Inn relaunch exits.

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