IHG Continues to Grow Largest Pipeline in the Industry
Over 13,000 rooms added to Americas pipeline in first quarter
ATLANTA.- As reported in the IHG (InterContinental Hotels Group) [Lon: IHG; NYSE: IHG (ADRs)], first quarter 2007 earnings (to Mar. 31, 2007) stock exchange announcement issued May 9, IHG, the world’s largest hotel group by number of rooms, outperformed in its major markets and continued its pipeline growth momentum from 2006. Already possessing the largest pipeline in the industry, IHG once again expanded its pipeline by signing nearly 23,000 rooms, which increased the total number of rooms in the global pipeline to almost 170,000. The Americas region led the pipeline growth with the addition of over 13,000 rooms, of which 36 percent was from the Holiday Inn and Holiday Inn Express brands. The Americas region now has over 99,000 rooms in its development pipeline.
“The growth momentum that we created in 2006 resumed in the first quarter because owners know that our brands are sound investments,” said Kirk Kinsell, SVP and chief development officer, the Americas, IHG. “In the Americas region, our current franchised hotels profit increased nine percent to $93 million reflecting RevPAR growth of 5.4 percent. It’s momentum like this that drove over 100 license agreements being signed during the quarter.”
The market’s fastest growing U.S. upscale brand, Crowne Plaza, signed eight hotels (over 1,900 rooms) in North America in the first quarter 2007. The brand now has 158 hotels open in the Americas region and has another 28 hotels in the region’s pipeline. During the quarter, IHG announced plans for the largest new build Crowne Plaza in the U.S. near Baltimore Washington Airport. The hotel is expected to open early 2009.
Introduced two and a half years ago, IHG’s newest brand, Hotel Indigo, continued to experience tremendous growth during the first quarter adding three hotels (373 rooms) to its development pipeline. The industry’s first branded boutique hotel in the lifestyle segment now has eight properties open and 45 hotels (over 7,000 rooms) under development. Properties currently open are located in Ottawa, Canada; Scottsdale, Ariz.; Sarasota, Fla.; Dallas, Texas; Houston, Texas; Chicago, Ill. (2 properties); and Atlanta, Ga. Recently, the first Hotel Indigo, which opened in Nov. 2004 in Atlanta, sold with proceeds of approximately $23.35 million on an investment cost of approximately $15.8 million, generating an unleveraged IRR in excess of 18 percent.
The growth of Holiday Inn Express, the fastest-growing hotel brand in the limited-service category, continues as the brand leads all IHG brands with 519 properties (44,749 rooms) in the Americas development pipeline. For the quarter, Holiday Inn Express outperformed its market segment in the Americas region with RevPAR up 7.8 percent. The brand has grown to 1,527 hotels and continues to open an average of two hotels per week. During the first quarter, IHG announced the groundbreaking of the Holiday Inn Express San Jose - Forum in San Jose, Costa Rica, the first Holiday Inn Express in Central America which is scheduled to be completed in mid-March 2008.
IHG experiences great success in attracting developers not only because of the company’s strength in performance, franchising and branding, but also as a result of IHG’s proven hotel management capabilities. The Hotel Management Group, the America’s operations division of IHG, has a management pipeline of more than 4,000 rooms which will join its existing portfolio of more than 44,000 rooms.
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