In its earnings report for the second quarter, IHG Hotels and Resorts announced that it was launching a new luxury and lifestyle collection brand.
“We are excited to announce that we will soon be launching a new luxury and lifestyle collection brand to give guests and owners more choice,” said Keith Barr, CEO of IHG Hotels and Resorts. “Over the past four years we’ve added five new brands to create a portfolio of 16, each targeting a specific segment and increasing our market reach. The addition of a collection brand will give high quality independent hotels access to the many benefits of the IHG system while maintaining a hotel’s distinctive identity. There are currently around 1.5 million independently managed rooms in the market segments we are targeting, and we expect the collection to attract more than 100 hotels within 10 years. “
More Q2 highlights
- Significant improvement in demand over the course of the first half of the year with RevPAR (43)% compared to 2019 and + 20% compared to 2020
- Greater China recovery most advanced with Q2 RevPAR (16)% versus 2019; further improvement in America to 26%; EMEAA with (65)% still the most challenged. Regional performance reflects differences in both vaccine implementation progress and travel restrictions
- Group Q2 RevPAR (36)% from 2019, reflecting a 19% lower occupancy rate and an unchanged rate of 87% from 2019 levels; Q2 occupancy of 53% improved in the course of the quarter; June 69% in the US; 54% Greater China; and 40% EMEAA
- Reportable segment operating profit of $ 188 million, up 262% versus 2020 (-54% versus 2019); reported operating profit of $ 138 million, based on System Fund income of $ (46) million and special operating items of (4 ) Million USD
- Fee business cost reductions of approximately $ 75 million this year versus 2019 on track and sustainable while continuing to invest in growth; Much of these savings achieved in the first half of the year; higher investments expected for growth in H2
- Heavy cash conversion resulting in an adjusted free cash flow of $ 147 million (2020: outflow of $ 66 million) and a net cash flow from operating activities of $ 173 million (2020: outflow of $ 14 million Dollar) leads
- Gross system growth of + 5.1% YOY; after relocations, including the liquidation of the SVC portfolio in the fourth quarter of 2020 and the review of Holiday Inn and Crowne Plaza in the first half of 2021, net system growth + 0.1% YoY
- 4,000 rooms (132 hotels) opened in H1, + 46% compared to 2020; Global Estate now with 884,000 rooms (5,994 hotels)
- Signed 32,600 rooms (203 hotels) in H1, + 24% compared to 2020; worldwide pipeline now with 274,000 rooms (1,805 hotels)
“Trade improved significantly in the first half of 2021, and travel demand came back sharply as vaccines were introduced, restrictions eased and economic activity rebuilt,” Barr said. “It was great to see our teams welcoming more and more guests back to our hotels, with domestic vacation bookings, especially in the US and China, leading the way. Essential business travel was a key element of our resilience during the pandemic, and we are now seeing more group activities and company bookings coming back. These trends and business momentum have continued over the past few weeks, including in EMEAA, where the lifting of travel restrictions in some markets is now also leading to an improvement in demand. As occupancy and rates continue to improve, almost 50% of our hotels achieved a RevPAR above 2019 levels in July. “
He added, “As more development activities return to the industry, the strength of IHG’s portfolio of brands and the strength of our size, systems and platforms for owners will be clearly recognized. In the first half of the year we opened 132 hotels and signed 203, both of which are significant increases compared to the previous year. Our focus on the quality of our property remains extremely high and we are making rapid strides in reviewing our Holiday Inn and Crowne Plaza portfolios to ensure the consistency of these leading brands and to have them well positioned for future growth. With the actions we are taking and a pipeline that is more than 30% of our current system size, we expect to return quickly to industry-leading net space growth. “
