IHG sees annual gross revenue rise to 6.6%

Hotel giant, IHG has released its preliminary results for the year to 31 December 2018, showing total gross revenue came to £21.2bn, up 6.6% in like-for-likes.

The company reported operating profit of £518.5m, a 7% fall, with global Full Year RevPAR of 2.5% (Q4 stood at 1.9%).

During the period, there was 4.8% net system growth to 837k rooms, 99k signings; and 271k rooms in the pipeline.

The brands saw key updates and expansion:
- Holiday Inn Express new guest room designs now open or committed to in >50% estate globally.
- Holiday Inn “Open Lobby” public space design now open or committed to in 80% of Europe estate.
- Crowne Plaza renovation completed or on-going across one-third of the US estate.
- Kimpton: continued global expansion, presence secured in 14 countries, with 18 deals signed in the year.

CEO Keith Barr said, 'We have made excellent progress in 2018 executing against the strategic initiatives I set out a year ago to accelerate our growth, whilst delivering a strong financial performance.

'The investments we have made have had a significant impact, allowing us to further evolve our established brands, move quickly to strengthen our portfolio both organically and by acquisition, and create real momentum in our business. We have made further progress in 2019 with the acquisition of the top-tier luxury brand Six Senses and the planned launch of a new all-suites upper midscale brand.

'Our strategic focus on accelerating our net rooms growth helped drive a net system size increase of 4.8%, and our best performance for both openings and signings in a decade, leaving us well positioned for future growth.'

Barr continued, 'Global RevPAR increased 2.5%, with underlying operating profit growing 6%. This, combined with a 19% rise in underlying EPS, underpins our decision to raise the total dividend for the year by 10% and follows the payment of a $500m special dividend in January 2019, taking total shareholder returns announced for the year to over $700m.

'The investments we have made have been funded through our group efficiency programme which is on track to deliver $125m of annual savings by 2020. We have successfully implemented a more efficient and agile organisational structure whilst building resources and capabilities focused on the most attractive growth opportunities.

'We also further strengthened our owner proposition and revenue delivery enterprise, with the successful global roll-out of IHG Concerto, featuring our innovative new Guest Reservation System. This gives IHG the most sophisticated, cloud-based platform in the industry, with further enhancements set to be deployed in 2019.'

Barr concluded, 'The fundamentals of our business remain strong, and while there are macro-economic and geopolitical uncertainties in some markets, we are confident in the year ahead and that our strategy will deliver industry-leading net rooms growth over the medium term.'