IHG Announces Regional Restructuring and Cost Saving Programme
June 30, 2009: InterContinental Hotels Group PLC [LON: IHG; NYSE: IHG] announces a significant cost saving programme including the restructuring of IHG's Asia Pacific region.
IHG has experienced rapid growth in the Asia Pacific region in recent years, in particular in the Greater China region where IHG is the largest international hotel company, with 115 hotels open and 127 in the development pipeline. Consistent investment in its core operations has grown IHG´s leadership position in the region.
The Asia Pacific organisation is now being restructured and streamlined while giving greater focus to individual parts of the region. IHG´s operations in Greater China are now of sufficient scale that they will become a separate business unit under the leadership of Keith Barr, Regional Managing Director based in Shanghai, reporting directly to Andy Cosslett, IHG´s Chief Executive. A second business unit comprising IHG´s operations in Southern Asia, Japan, Korea and the Pacific will be led by Jan Smits, Regional Managing Director based in Singapore. Mr. Smits will also report to Andy Cosslett.
As a result of the changes, Peter Gowers, currently Chief Executive Officer, Asia Pacific will leave the business on 31 July.
This change is part of a broader cost saving programme involving streamlining various parts of the global organisation, discretionary cost control, improved efficiency and effectiveness and making greater use of IHG´s scale to achieve purchasing savings.
The programme will generate enduring cost savings, in addition to the initial $30m of 2009 cost savings identified in February 2009. The details of the savings will be reported with IHG´s interim results for the six months to 30 June 2009 on 11 August, together with the one-off cost of implementing the programme. The ongoing cost saving programme will be led by Richard Solomons, who assumes the role of Head of Commercial Development in addition to his duties as Chief Financial Officer.
Andrew Cosslett, Chief Executive, said: ´We have grown rapidly over the last few years and worked hard to align the business. This allows us to accelerate the programme we have been working on to drive efficiency across the business.
´Asia remains a key long term growth driver for IHG. We have a strong infrastructure and a talented group of operators in the region. Today´s restructuring will ensure we maintain our leadership position.
´Peter Gowers has made a significant contribution to IHG over the last 10 years across key parts of the business including brand development and the Asia Pacific region. We thank him and wish him the very best for the future.´