InterContinental sees profits rise despite challenging environment

InterContinental sees profits rise despite challenging environment

InterContinental Hotels Group has reported strong underlying revenue growth for financial 2016, driven by growth in both RevPAR and rooms.

Global comparable RevPAR was up 1.8 per cent, while the company recorded $24.5 billion in total gross revenue from hotels in its system during the year.

Net room growth of 3.1 per cent was recorded for the year, including 8.8 per cent in Greater China.

Some 40,000 additional rooms were opened during the year, with some 90 per cent in priority markets.

IHG recorded operating profit of $707 million for 2016, up four per cent from $680 million last year.

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Richard Solomons, chief executive, InterContinental Hotels Group, said: “Our results clearly demonstrate our strong operational performance and the success of IHG’s long-term strategy, which have delivered a 9.5 per cent increase in underlying profit and a 23 per cent increase in underlying EPS.

“Our cash generative business model underpins our decision to announce a $400 million special dividend and to propose an 11 per cent increase in the total dividend for the year.

“We continued our focus on enhancing the long-term sustainability of our competitive advantage by evolving our brand portfolio and by driving innovation in our digital and loyalty offer. 

“We rolled out new formats across our Holiday Inn Brand Family which deliver significant uplifts in guest satisfaction and improved returns for owners, built momentum for our Hualuxe and Even Hotels brands, and took Kimpton Hotels & Restaurants and Hotel Indigo into new markets.

“The fundamentals for the hospitality industry remain compelling.

“Despite the uncertain environment in some markets, we remain confident in the outlook for the year ahead, as well as our ability to deliver sustainable growth into the future.”

IHG will return $400 million shareholders via a special dividend with share consolidation, to be paid in quarter two of this year.

Total returns since 2003 now stand at $12.8 billion, nearly $5 billion of which is from underlying operations.