Six Continents PLC Trading Update

1st Oct 2002

Six Continents PLC today announces that trading in the year to September 2002 is in line with expectations.

In Hotels, our results represent an improving performance within what has remained a weak market. Our increased focus on sales and marketing earlier in the year has led to many of our brands improving their relative performance and outperforming their respective markets over the summer.

We remain cautious as to the extent and timing of any recovery in the hotel market. Nevertheless, we are continuing to make both capital and revenue investments in the business to ensure we gain maximum benefit from any improvement in the market.

In Retail we have achieved good profits growth, continued to gain market share and have defended operating margins despite significant regulatory cost increases. Excellent sales growth has been achieved in food, wine, soft drinks and accommodation.

The brand conversion strategy for the estate continues to drive strong sales and profits uplifts. A strong performance in suburban pubs and restaurants was partially offset by difficult trading conditions in London, and a competitive high street.


Britvic, our Soft Drinks business, has again been very successful, increasing both market share and profits.

HOTELS: In all regions RevPAR (revenue per available room) performed better in the second half of the year to 31 August 2002 than in the first half.

In the Americas our newly renovated InterContinental hotels have outperformed the market in the key cities in which they operate. The total owned Americas InterContinental RevPAR is down only 4.2% in the second half to 31 August.

In the same period, Holiday Inn Express continued to outperform its relative market with RevPAR up 0.1%, while Holiday Inn continues to perform in line with its relative market with RevPAR down -4.4%, demonstrating the strength and resilience of our mid-scale brands despite our exposure to the business travel market.

Our EMEA mid-scale brands had a strong performance with total system RevPAR for Holiday Inn and Holiday Inn Express up 0.3% and 8.7% respectively in the second half to 31 August. The investment in marketing, sales and IT in Holiday Inn UK which we outlined at our Interim results is now beginning to yield benefits. Holiday Inn UK outperformed its relative market over the summer even though some 1,600 rooms were being refurbished.

However, in our EMEA upscale hotels, RevPAR remained depressed due to the high dependency on US guests. RevPAR for owned and leased InterContinental and Crowne Plaza hotels was down 9.9% and 10.5% respectively in the second half to 31 August.

September remains a very important month for our hotel business, accounting for between 10% and 15% of annual profits. The first two weeks of September were poor compared with last year but this pattern was reversed in the second two weeks due to easier comparables.

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