8th May 2015 08:19
LONDON (Alliance News) - InterContinental Hotels Group PLC Friday reported growth in global revenue per available room in the first quarter of 2015, boosted by a strong performance in all of its operating regions, as it continues to expand its pipeline with the highest number of first quarter hotel signings in seven years.
The hotel operator, which owns brands including Holiday Inn, Crowne Plaza and InterContinental Hotels, said global revenue per available room grew 5.9% in the first quarter, driven by an increased rate of 3.4% and growth in all four of the regions it operates in.
It said RevPAR was up 6.2% in the Americas, with growth in the US and Mexico partially offset by softer trading in Canada and Latin America. The US continues to benefit from record levels of demand and low levels of supply, with occupancy the highest it has ever recorded in the first quarter, IHG said.
In Europe, RevPAR was up 5.8% driven by solid growth in the UK and Germany, two of its priority markets. UK growth of 7.7% was helped by rate increases as the "economic environment continues to improve", while difficult trading conditions persist in Russia and the Commonwealth of Independent States, the group said.
Meanwhile RevPAR rose 6.2% in Asia, the Middle East and Africa, particularly supported by a strong performance in the Middle East and Japan, while Greater China grew 2.4%. In China, IHG continued to outperform the overall industry, with RevPAR five percentage points ahead of the market against a "backdrop of continuing government austerity".
IHG said it has a net system size of 723,000 rooms, up 4.9% year-on-year. 14,000 rooms were signed into its 201,000 room pipeline, which is the highest number of first quarter hotel signings in seven years. 7,000 rooms, or 57 hotels, were opened in the quarter, while 6,000 rooms, or 38 hotels, were removed. The group now has a total of 4,921 hotels.
Hotel Indigo opened its first hotels in Thailand and Finland, with two new signings secured in Bali, and the group's biggest brand, Holiday Inn, opened in its 75th country.
IHG bought Kimpton Hotels and Restaurants earlier in the year and since acquisition has opened three sites in the US and signed a further four, growing the brand's room count by almost 5%.
Chief Financial Officer Paul Edgecliffe-Johnson told journalists that there is "great potential" to expand Kimpton internationally outside of the US, although no plans have been made yet. Johnson said the brand is "performing really strongly", adding that IHG is "very pleased with what we've bought".
IHG added that the sale of InterContinental Paris - Le Grand for EUR330 million is expected to complete in the first half of 2015, and said its strategic review of InterContinental Hong Kong is "ongoing".
The hotel group said its gross capital expenditure guidance for the year remains unchanged at up to USD350 million.
"With our current trading performance and the strong momentum behind our brands we remain confident that our winning strategy will continue to deliver sustainable high quality growth," Chief Executive Richard Solomons said in a statement.
Shares in IHG were trading up 1.5% at 2,801.00 pence Friday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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