IHG's strong Q4 led by growth in Americas, focus on China

(InterContinental confirms breach at 12 hotels)

2016 was a positive year for InterContinental Hotels Group, with strong underlying revenue growth and a good number of openings in some top markets.

In 2016, IHG saw its global comparable RevPAR increase by 1.8 percent, led by rate up 1.2 percent, and record occupancy levels. It also reported net room growth of 3.1 percent, including 8.8 percent in Greater China. Total gross revenue for the year reached $24.5 billion, an increase of 2 percent year-over-year.

The company opened 40,000 guestrooms, 90 percent of which were in its “priority markets,” and signed 76,000 rooms in more than 500 new hotels, the highest number of deals signed since 2008. The pipeline has 230,000 rooms, up 8 percent. A full 45 percent of these are under construction and 90 percent are in IHG’s the priority markets.

“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,” Richard Solomons, CEO of InterContinental Hotels Group PLC, said in a statement. “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,” Solomons continued. “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.”

Brand by Brand

Over the last year, IHG added eight new InterContinental Hotels & Resorts to the brands portfolio—including five alone in Greater China—and had the most room signings since the pre-recession days of 2008. Six Kimpton hotels opened, including the company’s first outside of the U.S. in Grand Cayman. Three Even hotels opened (including two in New York, and the brand’s first franchise) and the 75th Hotel Indigo. 

As noted in June, IHG is investing $200 million to grow its Crowne Plaza brand in the Americas over the next three years. The company also signed 20 Holiday Inn Express hotels in Greater China in just eight months as part of the new tailored franchising model, taking the total signed for the brand in the region to 47 hotels.

Region by Region

In the Americas, IHG opened 24,000 rooms in 188 hotels, the company’s highest level of openings in five years, with more than half driven by the Holiday Inn brand family. At the same time, IHG removed 15,000 rooms from its portfolio, dropping 103 hotels from the brand. 

The company signed 37,000 rooms in 332 hotels, including 9,000 rooms in 93 hotels for its extended stay brands, and 2,000 rooms in 19 hotels across its boutique brands, including a Kimpton in Grenada, IHG’s first foray into the country.

In Europe, IHG opened 4,000 rooms in 24 hotels, including the 706-guestroom Holiday Inn Kensington London. The company signed almost 10,000 rooms in 60 hotels, the largest number of rooms signed since 2007. This included a record 17 properties in Germany, a third consecutive record year for the country, where IHG now has more than 100 properties open or in the pipeline.

In Asia, the Middle East and Africa, IHG opened 4,000 rooms in 17 hotels, including two hotels in Singapore, the first Hotel Indigo in the region and a 451-guestroom Holiday Inn Express—the company’s largest for the brand in the region. Openings also included the first Holiday Inn Express in Australia, the first of a larger portfolio development across Australasia. A full 11,000 rooms in 42 hotels were signed, and IHG entered into an agreement to develop a portfolio of EVEN Hotels in Australia and New Zealand.

The Greater China region, an area of intense focus, got 8,000 new guestrooms in 29 new hotels last year. Five of these hotels were under the InterContinental Hotels & Resorts flag, including the third InterContinental in Beijing and the fifth in Shanghai, now the most in any city globally. IHG also opened its fourth Hualuxe hotel and signed 19,000 guestrooms in 82 hotels, including 20 franchised Holiday Inn Express hotels since launching the new China franchise model in May.