Here is InterContinental Hotels Group CEO Andy Cosslett's second blog post, written exclusively for Hotel Check-In. Cosslett started his day in London by announcing IHG's fourth-quarter and full-year 2009 results. In his own words (with my emphasis in bold)...
We announced our full year financials this morning and although we posted an expected drop in operating profit of 34%, mainly driven by a drop in global revenue per available room (revpar) of almost 15% ,we're ahead of where most of our shareholders thought we would be - and crucially ahead of the competition.
We opened 439 new hotel in 2009 - a record for us and a huge achievement given the state of the economy. And key for us, we removed 187 poorer performing hotels, really driving up the quality of our estate around the world, especially in our Holiday Inn brand, as part of our global relaunch.
The two big questions of the day have been: are we seeing an improvement in business travel and when do we think the downturn will become an upturn. So let me try my best to answer these.
Business travelers have been scarce throughout 2009. It's been the lack of business travelers that led to the drop in prices across the industry I spoke about yesterday. Now, we're beginning to see early signs that the business traveler is coming back. It's a trickle at this point, not a stream. But it's a start. On the downside, corporate companies tend to set travel policies on an annual basis, so even if the economy begins to pick up, the hotel industry will lag behind the recovery.
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On the upside, it's clear you can't manage people effectively through phone calls and teleconferences. Face to face contact, get togethers and meetings are the lifeblood of industry and this recession has again proven this to be the case. So, it's not a case of if the business traveler will return; it's a case of when. And I'm afraid I don't have a crystal ball, but the early signs are promising. As for the upturn, again, no crystal ball, but there are a few factors we can look at and I'll start with
Our revenue per available room for Asia Pacific in January is up over 11% compared to Europe down 3% and the
So why does
The answer is pretty similar to why the
And it doesn't stop there.
And what about the rest of the world? There are definitely early signs of recovery and in the