Holiday Inn 2008 Annual Report Download - page 18

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16 IHG Annual Report and Financial Statements 2008
Business review continued
Asia Pacific
Asia Pacific results
12 months ended 31 December
2008 2007 %
$m $m change
Revenue
Owned and leased 159 145 9.7
Managed 113 99 14.1
Franchised 18 16 12.5
Total 290 260 11.5
Operating profit before exceptional items
Owned and leased 43 36 19.4
Managed 55 46 19.6
Franchised 86 33.3
106 88 20.5
Regional overheads (38) (25) (52.0)
Total 68 63 7.9
Asia Pacific comparable RevPAR movement on previous year
12 months ended
31 December 2008
Owned and leased
InterContinental 7.2%
All ownership types
Greater China (1.6)%
Asia Pacific revenue and operating profit before exceptional items
increased by 11.5% to $290m and 7.9% to $68m respectively.
The region achieved strong RevPAR growth across all brands,
with the strongest growth in the owned and leased portfolio,
and continued its strategic expansion in China. Good profit growth
was achieved, although the continuing operating profit margin
declined by 0.8 percentage points to 23.4% as a result of further
investment to support expansion.
In the owned and leased estate, revenue increased by 9.7% to
$159m as RevPAR growth continued at the InterContinental Hong
Kong despite a slowdown during the fourth quarter. The hotel’s
revenue growth combined with profit margin gains drove the
estate’s operating profit growth of 19.4% to $43m.
Managed revenue increased by 14.1% to $113m as a result of the
increased room count in Greater China and comparable RevPAR
growth of 10.7% in Beijing boosted by the Olympic period. Further
strong growth occurred in South East Asia with RevPAR growth of
9.9% in the region, and the joint venture with All Nippon Airways
(ANA) further increased revenues. Operating profit increased by
19.6% to $55m as revenue gains were partially offset by continued
infrastructure investment in China and Southern Asia.
Franchised revenues increased from $16m to $18m driven by the
receipt of $4m of liquidated damages relating to the settlement of
one franchise contract in the region. Excluding this receipt, operating
profit declined by $2m, primarily as a result of reduced fee income
in India due to the removal of non-brand compliant hotels.
After a further $5m of the previously announced $10m investment
to support the launch of the ANA Crowne Plaza brand in Japan and
the non-recurrence of a $2m favourable legal settlement in 2007,
Asia Pacific regional overheads increased by $6m to support the
rapid growth in the region.
Hotels Rooms
Change Change
At 31 December 2008 over 2007 2008 over 2007
Analysed by brand
InterContinental 40 315,398 1,272
Crowne Plaza 66 11 21,529 3,578
Holiday Inn 101 727,875 2,017
Holiday Inn Express 24 13 6,206 3,606
Other 20 (1) 5,646 (494)
Total 251 33 76,654 9,979
Analysed by ownership type
Owned and leased 2–693 –
Managed 207 32 66,140 10,026
Franchised 42 19,821 (47)
Total 251 33 76,654 9,979
Asia Pacific hotel and room count increased by 33 hotels
(9,979 rooms) to 251 hotels (76,654 rooms). The net growth
included 31 hotels (9,806 rooms) in Greater China reflecting
continued expansion in one of IHG’s strategic markets,
including the opening of IHG’s 100th hotel in the People’s
Republic of China, the Crowne Plaza Beijing Zhongguancun.
Asia Pacific hotel and room count