IHG Hotels & Resorts has released its full-year results for 2021 and reported the following:
- Significant improvement in trading during the year, with RevPAR recovering to 70% of 2019 levels (83% in Q4)
- Particularly strong recovery in the US, resulting in Americas FY RevPAR (20)% vs 2019, with Greater China (29)% and EMEAA (52)%; in Q4, Americas improved to (7)% vs 2019, with Greater China (33)% and EMEAA (33)%
- Global Q4 RevPAR of (17)% vs 2019 reflected rate attained broadly in line with 2019 levels and occupancy 11%pts lower; Q4 occupancy was 56% (53% FY), with the US reaching 61% (61% FY)
- Operating profit from reportable segments of $534m, +144% vs 2020, (down 38% vs 2019); reported operating profit of $494m, after System Fund result of $(11)m and operating exceptionals of $(29)m
- Fee business cost savings of $75m vs 2019 achieved and sustainable in future years; additional temporary reductions in the 2021 cost base of $25m are not expected to be retained
- Net cash from operating activities of $636m (2020: $137m), with adjusted free cash flow1 of $571m (2020: $29m); result includes strong cash conversion and a System Fund inflow following an outflow in the prior year
- Leverage substantially reduced, with our net debt:adjusted EBITDA ratio now 3.0x
- Final dividend of 85.9¢ proposed, equivalent to the withdrawn final payment in respect of 2019
- Gross system growth of +5.0% YOY; net (0.6)% YOY, after 49.7k rooms removed; ~70% of removals were across Holiday Inn and Crowne Plaza, driven by the completion of the estate review for these two brands
- Opened 44.0k rooms (291 hotels) over the year, +12% vs 2020; global estate now at 880k rooms (5,991 hotels)
- Significant acceleration in signings in Q4 at 23.7k, close to levels achieved in 2019; strongest increase in EMEAA
- Signed 68.9k rooms (437 hotels) in total in 2021, +23% vs 2020; global pipeline now at 271k rooms (1,797 hotels)
- Conversions ~25% of openings; first six properties secured for new Luxury & Lifestyle brand, Vignette Collection
“Trading improved significantly in 2021, with RevPAR getting closer to pre-pandemic levels as the year went on, profitability and cash flow rebounding strongly, and signings accelerating in Q4. Working hand in hand, our colleagues and hotel owners have once again shown incredible efforts to navigate the ebbs and flows of recovery. As vaccination rates rise and restrictions are lifted around the world, we are seeing the demand for travel increase. While there may be unexpected challenges ahead, we are confident in our ability to respond and adapt to what consumers and owners need as we position IHG for strong future growth.
Through our strategic priorities, we continue to build a better, stronger company for guests and owners. Our commitment to maintaining a high-quality estate and investing in operations, service and new designs is driving the success of our established brands. The addition of attractive new brands in multiple segments has opened up further growth opportunities globally. Our loyalty programme will be transformed this year, alongside important enhancements to our digital channels and experiences, and we are committed to ensuring that as we grow around the world, we do so in the right way through our Journey to Tomorrow plan and joining campaigns such as Race to Zero.
Recognising the scale of our ambitions and the strengths and efficiencies of our distribution and technology platforms, owner interest in our brands continues to increase. Development activity was well ahead of 2020, with 437 hotel signings contributing to a global pipeline that represents more than 30% of today’s system size.
With the strong financial improvements delivered in 2021, including more than doubling our operating profit from reportable segments and substantially reducing our net debt, the Board is pleased to be recommending the reinstatement of a dividend. The signs are encouraging that we are nearing the end of the pandemic, and we are confident in the strength of IHG’s enterprise, market positioning and ability to drive attractive levels of long-term, sustainable growth.”