SIX CONTINENTS HOTELS ANNOUNCES BUSINESS IN LINE WITH EXPECTATIONS

Six Continents Hotels, the world’s most global hotel company, today announced that it has performed in line with expectations in the first 48 weeks of the year and that revenue per available room (RevPAR) has held up well against the backdrop of weakening market conditions.

Six Continents Hotels owns, manages or franchises leading hotel brands including Inter-Continental Hotels and Resorts, Crowne Plaza, Holiday Inn, Express by Holiday Inn and Staybridge Suites in six continents around the world.

Thomas R. Oliver, Six Continents Hotels’ chief executive, commented that it was too early to quantify what impact the tragic events of September 11 will have in the immediate future. “The thoughts and prayers of all of us at Six Continents Hotels are with the families and friends of the victims of these unprecedented acts of terrorism. It’s far too soon for us to assess how this will affect people’s travel plans, or our business.

“Looking back on the first 48 weeks of the year, I have been very pleased with our progress” he continued. “As we outlined in May this year, we reacted swiftly and effectively to the downturn in the US and London hotel markets through a combination of cost management and increased marketing effort”.

Six Continents Hotels has expanded its total portfolio by nearly 25,000 rooms in the year to date, and now has 516,000 rooms. This has been driven predominantly by Express by Holiday Inn (10,000 rooms) and Crowne Plaza (4,000 rooms) as well as the acquisition of Posthouse Hotels (12,000 rooms).

More than a quarter of the 65,000 hotel rooms in the development pipeline are now for Six Continents’ upscale brands, Inter-Continental Hotels and Resorts and Crowne Plaza.

Refurbishment of 10 Inter-Continental hotels also remains in line, with the largest element of the work taking place in Europe next year.

The Posthouse conversion programme is proceeding to plan with over 23 hotels already converted to the Holiday Inn brand and a further 40 to be converted by the end of October. Six Continents has concluded that its original estimate of 15 hotels that would be sold was too high and now expects to sell no more than 10. The acquisition of the former Regent Hotel in Hong Kong was completed in August as planned.

In the Americas, Inter-Continental has high exposure to the cities worst affected by the economic slowdown, namely New York, Chicago and San Francisco, and has had over 10% of its rooms closed for refurbishment. Consequently, RevPAR in owned and leased hotels was down 14% in the first 48 weeks whilst in the Crowne Plaza owned and leased business RevPAR was down 2.0%. Total system RevPAR for Holiday Inn was down 0.9% and Holiday Inn Express up 1.9% with both these brands outperforming their relevant sectors in recent months.

In EMEA RevPAR for owned and leased Inter-Continental and Crowne Plaza hotels was up 0.7% and 1.6% respectively. Total system RevPAR for Holiday Inn was up 3% and Express by Holiday Inn was up over 5%.

The Group believes that the balance of its business between owned hotels, where less than 10 per cent of group operating profits come from owned US hotels, together with a significantly less geared US franchise system which delivers 20 per cent of profit, combined with a strong UK retail operation means that it will have some protection against the full impact of the current crisis.

Commenting on the future, Tim Clarke, chief executive of Six Continents PLC said “The Group will benefit from its hotel and retail balance but our concern remains on the overall effect that diminished consumer confidence in air travel will have on the industry as a whole. However, as the world’s leading hotel company, we will continue to offer the exceptional levels of service and comfort that our guests have come to expect of Six Continents.”