SECURITIES
AND EXCHANGE COMMISSION
Washington
DC 20549
FORM 6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 AND 15d-16
OF
THE
SECURITIES EXCHANGE ACT OF 1934
For 23
October 2020
InterContinental Hotels Group PLC
(Registrant's
name)
Broadwater
Park, Denham, Buckinghamshire, UB9 5HJ, United Kingdom
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F
Form 40-F
Indicate
by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes
No
If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): Not
applicable
EXHIBIT
INDEX
99.1
|
2020
Third Quarter Trading Update dated 23 October 2020
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|
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Exhibit
No: 99.1
23
October 2020
InterContinental Hotels Group PLC
2020
Third Quarter Trading Update
●
Group Q3 RevPAR down 53.4%; continued outperformance in key
markets; YTD down 52.3%
●
RevPAR
reflects a 30%pts reduction in occupancy YoY, with rate holding at
~80% of prior year levels
●
Occupancy
improved to 44% from 25% in Q2; 199 hotels (3% of estate) remained
closed at 30 September
●
Net
system size growth of 2.9% YoY; global estate now 890k rooms (5,977
hotels)
●
11k
rooms opened (82 hotels), 23k YTD; 6.7k added across mainstream
brands, 4.2k in upscale and luxury
●
Signed
a further 14k rooms (82 hotels), 40k YTD; total pipeline now 286k
rooms (1,899 hotels)
●
Fee
Business costs on track to reduce by ~$150m in 2020; targeting half
this level to be sustainable into 2021
●
Positive
cash flow in Q3, leading to total available liquidity at end of
September increasing to $2.1bn
●
After
issuance of new bonds and partial repayment of 2022 bonds in early
October, on a pro forma basis, liquidity increased further to
$2.9bn
Keith
Barr, Chief Executive Officer, InterContinental Hotels Group PLC,
said:
|
“Trading
improved in the third quarter, although progress continues to vary
by region. RevPAR declined 53%, compared to a 75% decline in the
prior quarter, while occupancy was 44%, up from 25% in Q2. Domestic
mainstream travel remains the most resilient, and our
industry-leading Holiday Inn Brand Family positions us well to meet
that demand as it slowly returns. I want to thank all our
incredible colleagues and hotel owners for their dedication to
creating a clean, safe stay experience that every one of our guests
can count on in these uncertain times.
Despite
the challenges we’ve faced, we have continued to open new
hotels and sign more into our pipeline. This is recognition of
consumer preference for our brands and strong owner relationships,
and also the long-term attractiveness of the markets we operate in
and the relative resilience of our business model. We signed 82
hotels in the quarter, taking us to 263 year-to-date, more than a
quarter of which are conversions. As we continue to invest in
growth initiatives, we do so with a strict focus on cost reduction
and an unwavering commitment to act responsibly for our people,
guests, owners and local communities.
A full
industry recovery will take time and uncertainty remains regarding
the potential for further improvement in the short term, but we
take confidence from the steps taken to protect and support our
owners and drive demand back to our hotels as guests feel safe to
travel. Our actions have resulted in ongoing industry
outperformance in our key markets, and we remain focused on
leveraging the strength of our brands, scale and market positioning
to recover strongly and drive future growth.”
Americas
RevPAR
was down 49.8% in Q3. Occupancy was 46%, compared to 28% in Q2. US
RevPAR was down 47.3%, with our performance continuing to be ahead
of the industry. The US franchised estate, which benefits from a
weighting towards domestic demand-driven mainstream hotels,
declined by 43% in the third quarter, whilst the US managed estate
declined by 71% due to its weighting to luxury and upscale hotels
in urban locations. There was sequential improvement in each month
in the quarter, though the pace of improvement slowed. In early
September, road trip ‘staycation’ demand saw occupancy
on the Saturday of Labor Day weekend reach 69%.
We had
98% of our estate open at the end of September across the Americas.
Of the 92 hotels that remain temporarily closed, the proportion of
upscale and luxury hotels and those in the managed estate continues
to result in an adverse mix impact.
We
opened 6k rooms (57 hotels) and removed 2.9k rooms (17 hotels) in
the quarter, with our net system size growing 1.7% YoY. Development
activity saw ground broken on 30 hotels and 2.5k rooms (27 hotels)
signed, including nine across the Holiday Inn Brand Family, three
avid hotels and two Atwell Suites. Momentum continues to build for
the voco brand that we brought to the region earlier in the year,
with three conversions already signed.
Europe, Middle East, Asia & Africa
Q3
RevPAR declined 70.4%, with Europe down 72%, Australia 66% and the
Middle East 65%. Occupancy was 31% for the quarter overall. As
government-mandated closures and travel restrictions partially
eased, leisure-related demand led to the rate of RevPAR decline
improving in July and August, before weakening in September.
Performance continued to be more challenging in the managed estate
and particularly in the portfolio of 18 owned, leased and managed
lease hotels in the region, with eight reopened over the course of
the quarter but six still remained closed. In total, 105 hotels or
9% of the EMEAA estate remained temporarily closed at the end of
September.
There
were 2.7k rooms (15 hotels) opened and 1.4k rooms (four hotels)
removed in the quarter, resulting in net system size growth of 2.6%
YoY. We signed 3.0k rooms (18 hotels) in the region.
Greater China
RevPAR
reduced 23.0% in Q3. Occupancy improved to 57%, having been 32% in
Q2 and less than 10% in February. In Mainland China, RevPAR was
down 32% in Tier 1 cities, whilst Tier 2-4 cities, which are more
weighted to domestic and leisure demand, performed better with a
decline of 12%. Over 20% of the portfolio achieved positive RevPAR
growth for the quarter, which included resort destinations that
benefited from ‘staycation’ demand over the summer
months.
We
opened 2.2k new rooms (10 hotels) in the quarter, with net rooms
growth of 8.1% YoY. Signings totalled 8.1k rooms (37 hotels),
representing an increase in development activity on the same
quarter last year. Additions to the pipeline included 24 franchise
signings across our Holiday Inn Express, Holiday Inn and Crowne
Plaza brands, and 13 signings of management contracts including
those across other brands.
Other
updates on cost actions, liquidity and financing
|
●
We remain on
track to reduce Fee Business costs by ~$150m in 2020 and with our
target for around half of this level to be sustainable into 2021,
whilst continuing to invest appropriately in growth
initiatives.
●
Gross capital
expenditure is expected to be ~$150m for 2020, a saving of ~$100m
versus 2019.
●
Our cost and cash
preservation actions, strong focus on working capital and the
improvement in trading led to positive free cash flow in
Q3.
●
Invoices paid by
our owners within 90 days of due date increased to ~90% in the
Americas.
●
Total available
liquidity increased to $2.1bn at the end of September, having been
broadly unchanged at $2.0bn between April and July.
●
To optimise our
staggered bond maturity profile, in early October we issued
€500m 1.625% bonds and £400m 3.375% bonds maturing in
2024 and 2028 respectively; we subsequently repaid early £227m
of our £400m 3.875% bonds maturing in November
2022.
●
Our next bond
maturity is the £173m that remains to be repaid in November
2022, with no further bond maturities until Q4 2024.
●
On a pro forma
basis for the bonds subsequently issued and repaid, our $2.1bn of
total available liquidity at the end of September increased to
$2.9bn.
Appendix 1: third quarter RevPAR movement summary
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Q3 2020
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Q3 YTD 2020
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RevPAR
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ADR
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Occupancy
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RevPAR
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ADR
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Occupancy
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Group
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(53.4)%
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(21.2)%
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(30.2)%pts
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(52.3)%
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(15.5)%
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(30.4)%pts
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Americas
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(49.8)%
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(19.5)%
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(27.8)%pts
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(48.3)%
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(15.0)%
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(27.6)%pts
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EMEAA
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(70.4)%
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(24.3)%
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(47.6)%pts
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(62.9)%
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(16.8)%
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(40.8)%pts
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G.
China
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(23.0)%
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(11.8)%
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(8.3)%pts
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(48.0)%
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(15.2)%
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(23.4)%pts
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Appendix 2: RevPAR movement at constant exchange rates (CER) vs.
actual exchange rates (AER)
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Q3 2020
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Q3 YTD 2020
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CER
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AER
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Difference
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CER
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AER
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Difference
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Group
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(53.4)%
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(53.2)%
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0.2%pts
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(52.3)%
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(52.4)%
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(0.1)%pts
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Americas
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(49.8)%
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(49.9)%
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(0.1)%pts
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(48.3)%
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(48.5)%
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(0.2)%pts
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EMEAA
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(70.4)%
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(69.7)%
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0.7%pts
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(62.9)%
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(63.0)%
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(0.1)%pts
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G.
China
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(23.0)%
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(21.8)%
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1.2%pts
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(48.0)%
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(48.5)%
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(0.5)%pts
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Appendix 3: monthly RevPAR
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Jan
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Feb
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Mar
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Apr
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May
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Jun
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Jul
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Aug
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Sep
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Group
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(1.5)%
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(10.8)%
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(55.1)%
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(81.9)%
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(75.6)%
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(67.4)%
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(58.1)%
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(51.0)%
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(50.9)%
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Americas
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0.2%
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(0.9)%
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(49.0)%
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(80.1)%
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(72.5)%
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(62.0)%
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(54.0)%
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(48.6)%
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(46.4)%
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EMEAA
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2.1%
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(11.3)%
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(62.7)%
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(89.3)%
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(88.5)%
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(85.3)%
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(74.7)%
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(66.3)%
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(69.9)%
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G.
China
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(24.6)%
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(89.3)%
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(81.4)%
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(71.2)%
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(57.1)%
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(48.6)%
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(35.9)%
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(20.2)%
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(11.0)%
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Appendix 4: Q3 system and pipeline summary (rooms)
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System
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Pipeline
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Openings
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Removals
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Net
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Total
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YoY%
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Signings
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Total
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Group
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10,853
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(4,635)
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6,218
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889,582
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2.9%
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13,596
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285,508
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Americas
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6,028
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(2,902)
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3,126
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526,624
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1.7%
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2,522
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109,245
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EMEAA
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2,660
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(1,366)
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1,294
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222,486
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2.6%
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2,998
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80,490
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G.
China
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2,165
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(367)
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1,798
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140,472
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8.1%
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8,076
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95,773
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Appendix 5: definitions
RevPAR, ADR and occupancy: RevPAR (revenue per available
room), ADR (average daily rate) and occupancy are on a comparable
basis, based on comparability as at 30 September 2020 and hotels
that have traded in all months in both the current and prior year.
The principal exclusions in deriving these measures are new
openings, properties under major refurbishment and removals. These
measures include the adverse impact of hotels temporarily closed as
a result of Covid-19. Monthly RevPAR reflects those hotels which
have been designated as comparable at the end of the respective
quarterly period.
AER: actual exchange rates used for each respective
period.
CER: constant exchange rates with 2020 exchange rates
applied to each comparable period in 2019.
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For further information, please contact:
Investor
Relations (Stuart Ford; Rakesh Patel; Kavita Tatla)
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+44
(0)1895 512 176
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+44
(0)7527 419 431
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Media
Relations (Yasmin Diamond; Mark Debenham)
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+44
(0)1895 512 097
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+44
(0)7527 424 046
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Conference call for analysts and shareholders:
A
conference call with Paul Edgecliffe-Johnson, Chief Financial
Officer and Group Head of Strategy, will commence at 9:00am (London
time) on 23 October 2020 and can be accessed at www.ihgplc.com/en/investors/results-and-presentations.
For
analysts and shareholders wishing to ask questions, please use the
dial-in details below which will have a Q&A
facility:
UK
local:
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0203
936 2999
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UK:
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0800
640 6441
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US:
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+1 855
979 6654
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All
other locations:
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+44 203
936 2999
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Passcode:
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19 66
11
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A
recording of the conference call will be available for 7 days from
approximately 11.30am London time; details are below:
UK:
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0203
936 3001
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US:
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+1 845
709 8569
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All
other locations:
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+44 203
936 3001
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Passcode:
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85 10
72
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Website:
The
full release and supplementary data will be available on our
website from 7:00am (London time) on 23 October. The web address is
www.ihgplc.com/en/investors/results-and-presentations.
Notes to Editors:
IHG®
(InterContinental Hotels
Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation
with a broad portfolio of hotel brands, including Six Senses Hotels Resorts
Spas, Regent Hotels & Resorts,
InterContinental®
Hotels &
Resorts, Kimpton®
Hotels &
Restaurants, Hotel
Indigo®,
EVEN®
Hotels,
HUALUXE®
Hotels and Resorts,
Crowne
Plaza®
Hotels &
Resorts, voco™, Holiday Inn®
Hotels &
Resorts ,
Holiday Inn
Express®,
Holiday Inn Club
Vacations®,
avid™ hotels,
Staybridge
Suites®,
Atwell
Suites™, and Candlewood Suites®.
IHG
franchises, leases, manages or owns nearly 6,000 hotels and 890,000
guest rooms in more than 100 countries, with approximately 1,900
hotels in its development pipeline. IHG also manages IHG®
Rewards Club, our
global loyalty programme, which has more than 100 million enrolled
members.
InterContinental Hotels Group PLC is the Group’s
holding company and is incorporated in Great Britain and registered
in England and Wales. Approximately 400,000 people work across IHG’s hotels and
corporate offices globally.
Visit
www.ihg.com for
hotel information and reservations and www.ihgrewardsclub.com for more
on IHG Rewards Club. For our latest news, visit: https://www.ihgplc.com/en/news-and-media
and follow us on social media at: https://twitter.com/ihgcorporate,
www.facebook.com/ihgcorporate
and www.linkedin.com/company/intercontinental-hotels-group.
Cautionary note regarding forward-looking statements:
This
announcement contains certain forward-looking statements as defined
under United States law (Section 21E of the Securities Exchange Act
of 1934) and otherwise. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as ‘anticipate’, ‘target’,
‘expect’, ‘estimate’, ‘intend’,
‘plan’, ‘goal’, ‘believe’ or
other words of similar meaning. These statements are based on
assumptions and assessments made by InterContinental Hotels Group
PLC’s management in light of their experience and their
perception of historical trends, current conditions, expected
future developments and other factors they believe to be
appropriate. By their nature, forward-looking statements are
inherently predictive, speculative and involve risk and
uncertainty. There are a number of factors that could cause actual
results and developments to differ materially from those expressed
in or implied by, such forward-looking statements. The main factors
that could affect the business and the financial results are
described in the ‘Risk Factors’ section in the current
InterContinental Hotels Group PLC’s Annual report and Form
20-F filed with the United States Securities and Exchange
Commission.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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InterContinental Hotels Group PLC
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(Registrant)
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By:
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/s/ F.
Cuttell
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Name:
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F.
CUTTELL
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Title:
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ASSISTANT
COMPANY SECRETARY
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Date:
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23 October 2020
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