Holiday Inn 2007 Annual Report Download - page 20

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18 IHG Annual Report and Financial Statements 2007
Business review continued
12 months ended 31 December
2007 2006 %
$m $m change
Revenue
Owned and leased 145 131 10.7
Managed 99 65 52.3
Franchised 16 8 100.0
Total $m 260 204 27.5
Sterling equivalent £m 130 111 17.1
Operating profit before exceptional items
Owned and leased 36 31 16.1
Managed 46 39 17.9
Franchised 65 20.0
88 75 17.3
Regional overheads (25) (23) (8.7)
Total $m 63 52 21.2
Sterling equivalent £m 31 29 6.9
Asia Pacific comparable RevPAR movement on previous year
12 months ended
31 December 2007
Owned and leased
InterContinental 7.3%
All ownership types
Greater China 7.0%
Asia Pacific revenue increased by 27.5% to $260m whilst
operating profit increased by 21.2% to $63m.
The region achieved strong RevPAR growth across all brands and
ownership types and continued its strategic expansion in China
and Japan. Strong growth in total profit was achieved; however,
revenue conversion was impacted by continued investment to
support expansion, resulting in a 1.3 percentage point reduction
in operating profit margins to 24.2%.
In the owned and leased estate, revenue increased by 10.7% to
$145m due to the combined impact of strong room and food and
beverage trading at the InterContinental Hong Kong, despite the
impact of renovation works throughout a significant part of the
year. The hotel’s revenue growth combined with profit margin
gains drove the estate’s operating profit growth of 16.1% to $36m.
Managed revenues increased by 52.3% to $99m as a result of
the full year contribution from the hotels which joined the system
in 2006 as part of the IHG ANA joint venture in Japan, continued
organic expansion in China and solid RevPAR growth across
Southern Asia and Australia. Operating profit increased by
17.9% to $46m as revenue gains were offset by integration
and ongoing costs associated with the ANA joint venture and
continued infrastructure investment in China.
Franchised revenues doubled from $8m to $16m, primarily driven
by hotels in the IHG ANA joint venture. Similar to the managed
operations, growth in profitability was impacted by ANA
integration and ongoing costs.
Regional overheads increased by $2m to $25m primarily as a
result of investment in technology and corporate infrastructure
in China and Japan and included the favourable impact of a
legal settlement.
Asia Pacific
Asia Pacific results