Holiday Inn 2012 Annual Report Download - page 24
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22 IHG Annual Report and Financial Statements 2012
Europe results
12 months ended 31 December
2012
$m
2011
$m
%
change
Revenue
Franchised 91 86 5.8
Managed 147 118 24.6
Owned and leased 198 201 (1.5)
Total 436 405 7.7
Operating profit before exceptional items
Franchised 65 65 –
Managed 32 26 23.1
Owned and leased 50 49 2.0
147 140 5.0
Regional overheads (32) (36) 11.1
Total 115 104 10.6
Europe comparable RevPAR movement on previous year
12 months ended
31 December 2012
Franchised
All brands 1.8%
Managed
All brands 1.0%
Owned and leased
InterContinental 5.2%
Revenue and operating profit before exceptional items increased
by $31m (7.7%) to $436m and by $11m (10.6%) to $115m respectively.
RevPAR increased 1.7%, with 1.2% growth in average daily rate
despite challenging economic conditions across Europe.
Franchised revenue increased by $5m (5.8%) to $91m, whilst
operating profit was flat at $65m. At constant currency, revenue
increased by $8m (9.3%) and operating profit increased by $3m
(4.6%). Growth was mainly driven by an increase in royalties of 2.7%
(7.5% at constant currency) reflecting RevPAR growth of 1.8%,
together with System size growth of 4.0%.
Managed revenue increased by $29m to $147m (24.6%) and operating
profit increased by $6m (23.1%) to $32m. Revenue and operating
profit included $80m (2011 $46m) and $2m (2011 $nil) respectively
from managed leases. Excluding properties operated under this
arrangement and on a constant currency basis, revenue decreased
by $1m (1.4%) reflecting a 4.3% decrease in System size partially
offset by RevPAR growth of 1.0%. On the same basis, operating
profit grew by $5m (19.2%).
In the owned and leased estate, revenue decreased by $3m (1.5%)
to $198m and operating profit increased by $1m (2.0%) to $50m.
At constant currency and excluding the impact of disposals,
revenue increased by $10m (5.1%) and operating profit increased
by $4m (8.3%). The InterContinental London Park Lane and the
InterContinental Paris Le Grand delivered year-on-year RevPAR
growth of 8.0% and 2.5% respectively.
Europe
Continue to grow in priority markets and across key cities, and
improve underlying margin through operational excellence over the
next three years.
2013 priorities
• Accelerate growth in our priority markets and in key cities across the region;
• continue to expand Hotel Indigo across the region in key gateway cities and localise the
Holiday Inn Express brand; and
• continue to deliver operational excellence to improve guest satisfaction and deliver market
outperformance by embedding our revenue tools, system delivery platforms, Responsible
Business practices and People Tools.
Business Review: Performance continued