InterContinental Hotels Group (IHG) achieved a strong rise in profits last year, as it launched new brands and sold assets.
The world’s biggest hotel company, in terms of room inventory, generated operating profits of US$668 million in 2013, 10% higher than in 2012. This result was driven by a 4% increase in revenue, to US$1.9 billion, as occupancy and rates both climbed.
IHG also made progress with its strategy of becoming an ‘asset-light’ management company, by selling InterContinental hotels in London and New York. This effort continued in the first quarter of 2014 with the sale of the InterContinental San Francisco.
The company also launched two new brands last year – the China-focused Hualuxe Hotels & Resorts and health and fitness-driven Even Hotels.
“2013 marked IHG’s 10th anniversary as a standalone company, and was another year of strong performance. We delivered good underlying growth in revenues and profits, further reduced the capital intensity of the business and continued to generate high returns,” said IHG’s CEO, Richard Solomons.
“Over the last 12 months we entered into agreements to dispose of three owned InterContinental hotels… At the same time we are continuing to invest behind our award-winning brands and technology platforms to meet changing consumer behaviours and sustain our industry-leading position.”
IHG opened 237 hotels in 2013, taking its total portfolio to 4,697 properties with a global inventory of 687,000 rooms. It also added a further 444 hotels to its pipeline, which now stands at 1,120 hotels, or 180,000 rooms – its highest level for five years.
Key openings in 2013 included InterContinental hotels in France, Switzerland, Japan, China, Nigeria, plus Hong Kong’s first Hotel Indigo. The first ever Even hotel is due to open in the US in the first half of 2014.
In terms of operating performance, IHG’s global revenue per available room (revPAR) grew 3.8%, driven by a 1.3 percentage point rise in occupancy and 1.8% increase in rates. The Americas saw the strongest revPAR growth, at 9%, followed by Asia, Middle East & Africa (+6.1%) and Europe (+1.7%).
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