InterContinental Hotels Group PLC (IHG) Q1 2014 Earnings Report, Transcript and Summary

Ladies and gentlemen, welcome to the Intercontinental Hotels Group's Interim Results Call hosted by Richard Solomons. My name is Andrea, and I'll be your coordinator for today's conference. [Operator Instructions] I'm now handing you over to Richard Solomons to begin today's conference. Please go ahead.

Thank you, Andrea. Good morning, everybody, and thanks for joining us on our first quarter trading statement conference call. This is Richard Solomons, Chief Executive of IHG. And with me on the call today is Paul Edgecliffe-Johnson, our Chief Financial Officer. So now I'll have Paul will take you through our trading performance before we open up the call for questions. But first of all, though, I wanted to cover some of this quarter's highlights. We've made an excellent start to the year with strong RevPAR performance in each of our regions, led by the Americas, where we have almost 2/3 of our rooms. At a group level, gains in both rates and occupancy drove RevPAR up 6%, and this marks our best quarterly growth for almost 2 years. This performance reflects growing preference for IHG's brands among both owners and guests, which is also demonstrated by the continued momentum in our hotel openings and signings. In fact, we've delivered our strongest underlying first quarter performance for openings since 2010 and signings since 2008. We completed the disposal of our InterContinental hotels in New York and San Francisco in March and are announcing today a special dividend of $750 million, which will be paid subject to shareholder approval in July. This reflects our clear capital allocation strategy, which has been very consistently applied since we became a standalone company in 2003. We're committed to returning surplus funds to shareholders whilst maintaining an efficient balance sheet and continuing to invest behind growth, and Paul will talk in more detail about this later on. Looking now at a few areas in a little more detail before I hand over to Paul. We delivered 2.2% net rooms growth year-on-year, taking our system size to 689,000 rooms at the end of March. 8,600 room openings reflected good performance across each of our regions. This included the Americas, where openings were in line with quarter 1 last year despite the weather-related construction delays that impacted the whole industry. More than 2/3 of our openings were for the Holiday Inn brand family, reflecting the ongoing appeal of this well-established and iconic brand to owners. We removed just under 7,000 rooms in the quarter. And as I said before, this discipline is how we ensure the ongoing quality of our system and the long-term strength of our brands. Most of the hotels that exited were in our Americas region, and these hotels were, on average, more than 25 years old and had guest satisfaction scores some 6 percentage points lower than the remainder of the estate. Looking ahead, we do now expect the quarterly run rate for removals to come down from the quarter 1 level. And for the full year, we should have a more normal removal rate, so about 2% to 3% of our opening system size. We've continued to sign more than 1 hotel a day into our pipeline into 2014, adding more than 13,000 rooms in total. This was led by the Americas, where we're seeing the benefits of continued improvements in the availability of financing, particularly for strong established brands in the upper midscale segment. In Greater China, we signed new locations for all 6 of our brands in the region. Owners in China recognize IHG's operational expertise, the strength and breadth of our brand offering and the power of our distribution systems, all built up during the 30 years we've been present in the country. As such, as well as continued strong new build signings pace, we're also starting to see good interest in conversion opportunities for Crowne Plaza and the Holiday Inn brand family in what has traditionally been a new build market for us. At the end of March, our group pipeline stood at 182,000 rooms, of which more than half are in developing markets, and our pipeline is at the highest quality, with over 45% of rooms under construction. At our educational event in November, we told you about the importance of using technology to engage with guests and enhance their experiences across the entire guest journey. Building on our long track record of industry-leading insights and innovation, we formed a strategic relationship with Amadeus, the leading provider of technology solutions to the travel industry. In doing this, we will leverage both IHG's consumer and brand insights and Amadeus' technology capability to develop innovative solutions in this area. We're now in the planning and scoping phase of the relationship, so there isn't any more we can share with you at this stage, but we do believe this could shape the future of how guests plan and experience travel. IHG Rewards Club continued to make progress since its relaunch last summer with increased levels of recognition of IHG as a brand family. Furthermore, it's been awarded second place in the inaugural J.D. Power Hotel Loyalty Report, a fantastic achievement less than 12 months after the program's relaunch. And just last week, we won 5 Freddie Awards, more than any other hotel loyalty program, and these are the most prestigious member-generated awards in the travel industry and reflect the effectiveness of IHG Rewards Club. And with more than 4,700 hotels across nearly 100 countries and territories, IHG offers unparalleled choice for guests, which is a genuine competitive advantage for us. So I'll now hand over to Paul, who will talk to you in more detail about both our recent trading performance and the balance sheet.

Thank you, Richard, and good morning, everyone. I'll start by giving you a bit more color on our quarterly trading performance by region. In the Americas, RevPAR grew 6.6% with 6.4% in the U.S., with increases in both rate and occupancy. This is driven by mid-single-digit growth in both transient and group business, helped by the better economic environment and improved business confidence. Government demand continued to be down year-on-year but showed sequential improvement through the quarter after the signing of the spending bill in mid-January. All of our brands in the U.S. drove mid- to high single-digit RevPAR growth, led by Crowne Plaza, up 7.8%; and our extended-stay brands, Staybridge Suites and Candlewood Suites, both up over 8%. Crowne Plaza outperformed its segment on a total RevPAR basis by more than 200 basis points in the quarter. This was driven by better occupancy, particularly from groups, which drove almost 40% for the brand's demand growth, which -- most of which was on weekdays. This demonstrates the ongoing benefits we are seeing from the brand's repositioning program. Staybridge Suites and Candlewood Suites both delivered mid-single-digit occupancy growth in the quarter, driving sustained benefits from a program of extensive hotel refurbishments carried out mostly during 2012. Holiday Inn had a strong quarter with RevPAR up 6.4%, driven by solid improvement in group business in both February and March. As expected, trading in March was helped by the soft Q2 comparative from last year. The Holiday Inn brand family continues to hold a significant $4.50 RevPAR premium to its industry segment. This demonstrates the extensive brand relaunch that has taken place, which has included the removal of over 1,500 substandard hotels and the additions of almost 2,100 new ones. The U.S. continues to benefit from a favorable supply-and-demand dynamic, and room nights sold have now beaten monthly records for each of the last 37 months. Occupancy for our hotels in the U.S. is over 130 basis points above the prior peak and is over the 70% level for our InterContinental, Hotel Indigo and extended-stay brands. Despite the improving financing environment, industry forecasters only expect U.S. supply growth of around 1% this year and expect it to remain below the historic 2% average for the foreseeable future. However, when supply growth does come back, which will be positive for IHG, we have 13% of the active hotel pipeline compared to 5% of industry rooms, so we will continue to take share as these rooms open. RevPAR was up 6.1% in Europe, driven by good gains in both rate and occupancy. Occupancy is now less than 200 basis points below its prior peak. But in real terms, RevPAR still has some way to recover. 11.6% RevPAR growth in the U.K., our largest market in Europe, reflects double-digit growth in both London and the regions. U.K. occupancy levels are now at 70%, our highest first quarter since 2007, reflecting the better macroeconomic conditions across the country and strong demand for IHG's brands. In Germany, RevPAR growth of 5.1% was driven by increased trade fair activity, specifically in Düsseldorf and Frankfurt, which, together, contribute more than 1/4 of IHG's total revenues in the country. France saw RevPAR down 4.4% with declines in both the provinces and in Paris, in line with the industry. Our InterContinental Paris Le Grand Hotel was disrupted by planned renovation work, which we expect to be completed during the second quarter. We've also seen encouraging performance outside of these key European markets with mid-single-digit growth in Netherlands and Switzerland and some occupancy-led RevPAR improvements in Southern Europe. Asia, Middle East and Africa is our most diverse region, with different dynamics driving each of our key markets. RevPARs for the region was up 7.1% if you exclude Thailand, Egypt and the Lebanon, where political unrest continues to have a negative impact on the overall numbers. Even when these markets are included, RevPAR in the region still grew almost 4%. Our performance was led by Southeast Asia, excluding Thailand; and Japan with both markets driving double-digit RevPAR growth. Southeast Asia is benefiting from strong demand in developing markets such as Indonesia, where pre-election spending has driven increased demand, and Vietnam, where our hotels in Hanoi, in particular, have successfully grown business from large multinationals. Japan's continued strong growth was driven by both rate and occupancy and reflects the ongoing positive economic environment. High single-digit RevPAR growth in Australia was driven by strength in Adelaide and Melbourne and also in Sydney, where our InterContinental Hotel hosted the G20 finance ministers' meeting in February. In the Middle East, our overall performance is a mix of solid trading in our 2 largest markets of the United Arab Emirates and Saudi Arabia, offset by the declines in Egypt and in Lebanon. Greater China RevPAR grew 3.9%, with IHG's scale, expertise and breadth of brands continuing to drive significant outperformance against the industry. Trading in the region was led by good RevPAR growth in Tier 1 cities and resorts with increased demand from leisure guests over the Chinese New Year period. The region does continue to experience an industry-wide reduction in spend on conferences and meetings. IHG is not reliant on any one segment, though, driving solid growth in nongovernment-related corporate business in the quarter. In addition, transient business has continued the good growth levels from 2013, and our Holiday Inn Express brand drove RevPAR up almost 8%. As Richard mentioned earlier, in March, we completed the disposal of InterContinental Mark Hopkins San Francisco and an 80% interest in InterContinental New York Barclay, with gross proceeds totaling $394 million. Both deals were structured with long-term management contracts, which will retain the InterContinental brand on these hotels for decades to come. The Barclay will close soon for its previously announced $175 million refurbishment program, 20% of which IHG will fund, in line with our share of the joint venture. Following these deals, we now have just 7 owned hotels open, to which we will add 3 when we open the EVEN Hotels, which are currently in the pipeline. Given the strength of global demand for prime hotel markets and as a further step towards continuing to reduce the capital intensity of the business, we are now reviewing opportunities for further asset sales, so we'll let you know any updates as our plans develop. The $750 million special dividend we announced today reflects not just the completion of these asset sales and the robust free cash flow generated by our fee-based model, but also our strategy to have an efficient balance sheet whilst maintaining an investment grade credit rating. Being investment grade is important to us and to the owners, who signed 20-plus-year contracts under our brand. The best proxy for this is around 2x to 2.5x net debt-to-EBITDA. That is where we feel comfortable. And in strong trading conditions, where the outlook is positive, our intention is to run towards the top end of this range. The special dividends announced today will take total funds returned to shareholders since 2003 to $10.3 billion, including $1.6 billion in ordinary dividends. This reinforces our clear, consistent capital allocation strategy, which has meant that, on top of the ordinary dividend, we have returned additional funds to shareholders in 8 of the 11 years IHG has been operating as a standalone company. Going forward, we will continue to yield additional return to shareholders based on further asset sales and the significant amount of cash that IHG's model generates. Looking ahead, current trading trends give us confidence for the rest of the year. Forward bookings remain encouraging, with increases in both rates and rooms on the books. We expect our signing and openings pace to remain strong, and we are very excited by the prospect of the first hotels for our new brand opening -- for our new brands opening, EVEN by the end of June and HUALUXE by the end of the year. And with that, Richard and I will take your questions. Thank you.

[Operator Instructions] The first question comes from the line of Jamie Rollo from Morgan Stanley.

A couple of sort of questions, please, one on the very good U.S. performance. I mean, last year, you sort of underperformed the market. In Q1, it looks like you slightly outperformed upper midscale. Is that something to do with the removals in the quarter or something to do with the sort of Easter shift, which affects those big box hotels? And also, as part of the same question, when you last spoke, you seemed to imply that you thought occupancy had probably peaked for you guys. I'm just wondering how you feel about that comment now in relation to your comments about supply being quite low. And then just the other question on the asset review. Could you, please, just try and give us a feeling for maybe the combined EBITDA of Paris and Hong Kong last year? We could work out the EBIT, but I don't think you've given us the EBITDA for those hotels maybe together. And have you had any expressions of interest recently? Can you give us a feeling for the speed of any exits? Presumably, we can assume you'll keep the management contracts on those hotels.

You managed to convert 2 questions into about 6, Jamie, but let me just start from the U.S., and then Paul will pick up on occupancy and the asset questions. Look, I think -- I wouldn't agree that we underperformed last year. I think what you've got is very different dynamics in the segments, geography and so on. So clearly, in the U.S., the majority of our business is the upper midscale segment with Holiday Inn and Holiday Inn Express. But what you've seen in this quarter is you have seen some very good performance from Crowne Plaza, which, as you know, we've been in a rolling relaunch program; and also in extended stay, where with Staybridge Suites and Candlewood Suites, we're very well placed. So we have gained share in the quarter, no question. But I think it's a little bit about where the market mix is as opposed to the relative underperformance before. And I think when you're comparing us, particularly with the U.S. companies, as you know, but you have to look very carefully at where they're driving their RevPAR growth and where we are. And one of the points that we made and I think Paul made very clearly in the prelims is the underlying strength and premium from Holiday Inn has been very consistent. We didn't see the big falls, therefore we didn't see the big rises. But I think it was a good solid performance in the Americas in the first quarter and good momentum. So Paul, do you want to speak up on occupancy and the other questions?

Yes. Thanks, Jamie, for the question. As I said, the occupancy in the U.S. is 130 basis points above the prior period and over 70% for our InterContinental Hotel and extended-stay brands. Obviously, what that means is that, on the busier side, it's running much higher and a little slower on Saturday and Sunday nights. So there is a -- but there's a limit to how much you can continue to grow that. But then, as you get more demand coming on earlier, so you've got a stronger base business, it allows us to yield the hotels better. And that's really when our tools that we offer our franchisees really come into play to allow them to yield management best -- yield manage best to get the possible returns out. So we're focusing an awful lot on that, and so we think that, that will allow to continue to outperform there. But you're hard to continue to get occupancy much beyond that. And in terms of your questions around the disposal, the DA from the -- sort of the depreciation and amortization on the 2 hotels, about $22 million. And in terms of your expressions of interest, et cetera, and will we keep the management contracts, yes, we expect to get the management contracts. We do that almost invariably. And we've announced that we have a strategic review ongoing, and we'll say more when we have more to say on it, but nothing to say today on that.

Thank you, Paul.

The next question comes from the line of Tim Barrett from Nomura.

Two quick questions, as well, please. And you mentioned that the exits are skewed towards America, and I guess we can see that in the numbers. And is that related to a liquidated damages portfolio? Or is it just a wider, more disparate number of hotels? And then on CapEx, are you still comfortable with the $250 million to $350 million guidance? And how are you getting on with spending that? Will it be second half or first half weighted?

Yes. Paul, do you want to...?

Sure. Tim, the exits in the Americas, there's one hotel that we've got to liquidate damages from, but it's a small hotel. It's a not high key account hotel, that one. So no, this was just, as we said, continuing to take out some of those Holiday Inns, mainly, at a lower quality level. And very comfortable with that. In terms of CapEx, yes, we said before, next few years, we're going to run towards the top end of our previous guidance, $250 million to $350 million. First quarter, actually, the amount spent of that was quite low, which is often the case in the first quarter. And it will be -- first, second half, difficult to call right now. Might be a little bit more weighted to the second half, but we'll see when some of the money goes out.

Okay. And on the Americas, do you think that will mean you get into net growth in the Americas this year, or will the growth be more emerging market driven?

Just typically, it is more emerging market driven, but we do hope to grow the Americas just in signings.

I think it's important to look at the momentum we've got on signings, particularly in the Americas. And it was a very good quarter for signing in the Americas, and particularly for the Holiday Inn brand family. I think a lot of great opportunity there, and it's hard to predict quarter-by-quarter. But we drive up the quality of the estate, and we are driving up the performance, so we feel good about where we're at.

The next question comes from the line of Ian Rennardson from Jefferies.

I have 2 questions. One, on the timing of Easter, what benefit to your RevPAR did that give? And do you expect that to sort of reverse in Q2? And secondly, if we talk about disposals in France, in particular, are there any tax or sort of HR reasons to stop you doing that sooner rather than later?

Okay. Paul, why don't...

Sure. In terms of the Easter impact, Ian, obviously, it's the Americas and Europe only, and it's a very low single-digit benefit in the first quarter from that. And so yes, you will see, in April, a reverse in that. But it's not a big number. In terms of anything that would prevent us from a tax or HR perspective of being able to make further disposals, no. But there are procedures that have to be followed, but there's nothing that will prevent us from being able to do what we wanted to do.

The next question comes from the line of Vicki Gedge from PIMCO.

First one is on the financial policy. You mentioned the 2x to 2.5x leverage target. Can you just clarify whether you said you expect to stay at the upper end of that? Clearly, the special dividend puts you there. Second question is, on the special dividend, the $750 million, sort of why is it this large given, that you haven't announced any more asset disposals? I'm looking at the cash on balance sheet of $134 million at the year end. The proceeds, I understand, will be sort of around the $300 million in from the disposals agreed. How do you expect to fund the remainder? Will you back in the bond market? And on the -- finally, on the investment grade rating. You mentioned this is important. I think, previously, you'd said a strong investment grade rating, which you'd indicated was the mid-BBB at S&P. Can you just confirm whether you mean you're happy to go down to BBB-?

Let me say a couple of words, and then I'll let Paul pick it up. I mean, I think we've always been very consistent about 2x to 2.5x as a proxy for investment grade. I don't think we've changed anything on that. In terms of the size of the dividend, Paul had said in his sort of words that we've never made -- we've never sort of effectively just returned the proceeds from disposals if you look back over the history of our returns. And clearly, we're looking at, yes, cash proceeds from disposals. And we said at the year end, we were going to wait until we have those proceeds in. We've just almost finished our buyback. We've got about $11 million, I think, to go on that. And obviously, trading has had a strong start to the year. So as we look at that in the round and we look at our level of leverage, then that seems like an appropriate amount and not inconsistent with the way we looked at it before. Paul, do you want to pick up the other part...

Yes, sure. Thanks, Vicki. In terms of the question around how would we be funding this, we do obviously have a bank facility, which is undrawn, and it's very cheap money at the moment. And so we've got $398 million [ph] all from the disposals and -- a fair portion of which is currently sitting as cash on the balance sheet to be used, and then we'll be using existing facilities. And in terms of your commenting on S&P, et cetera, yes, we've said the investment grade is very important to us. I think we've been very consistent on that.

Your next question comes from the line of Wyn Ellis from Numis.

A couple of very quick questions from me. First of all, on Hong Kong, there's just a lot of redevelopment going around the hotel at the moment. When will that be completed? So give us, I guess, some idea of timing for when you might be wanting to sell the hotel. And then secondly, on extended stay where you've had a very good performance in the U.S., what do you think is behind that, and does it change your strategy in extended stay any?

Let me pick up the extended stay one, and then Paul will talk about Hong Kong. Look, I think, with both the brands, at Candlewood and Staybridge, they've become very well established and grown very fast in what has been a fast-growing sector. So they're certainly the leading brands in that sector. We've seen J.D. Power Awards and a lot of signings and shares. So I think it's a sector we're strong in and we perform well. Particularly around Staybridge, we had a series of refurbishments -- actually on Candlewood, too, from some of our key owners there, which clearly helped. And those are things, obviously, they funded but we planned with them, and than we leveraged that in terms of yield management pushing the performance. So I don't think it changes anything, as such. I think it's just a demonstration, again, of our ability to push the performance of our brands and gain share, both in supply and revenue. As we look internationally and as Staybridge has had a few signings outside of the U.S., not huge relative to the size of the U.S. market because it's not an industry segment that's high growth outside the U.S., but we'll continue to push on that. So I think it's more steady as she goes and, again, a demonstration of the way our brands perform in the marketplace. Paul?

Thanks, Wyn. The location of the InterContinental in Hong Kong is a fantastic area. There is some redevelopment work going on around it from some of the other owners, but it's not a big impact on our ability to decide what we would do with our assets at the moment. So that's not a driver of our decision-making process. Let's just see what happens.

The next question comes from the line of Tim Ramskill from Crédit Suisse.

Three questions, if that's okay. Just first one, as regards the asset review, and appreciate that, that sort of process is just getting underway. But big picture, are the Paris and Hong Kong assets sort of as well invested as you'd like them, or would you put them on the spectrum of kind of London, which was kind of ready to go, versus New York, which obviously needed a bit of a repositioning exercise? Second question is, in your repaired comments, you talked about decent levels of group business activity in the Americas. I just wondered if you could share with us your thoughts on the outlook for group for the rest of the year. And then third question, as we're seeing a sort of continued improvement in performance across many markets, but in particular, in the Americas, just a quick reminder on where we're at in terms of incentive fees and perhaps how much further RevPAR might need to improve before that becomes more of a driver?

Okay, I'll pick up the trading one again and ask Paul to pick up the asset one. In terms of -- I'll start at the end. In terms of incentive fees, those are not as big a driver of our numbers, nor are they as significantly geared as some of the major U.S. competitors. So actually, we're getting incentive fees on well over half of our estate today. And I think, as we see RevPAR growth and profitability growth, those will continue to grow. But it's broadly in line. It's not a spike in the way you've seen in some of the other companies. As far as groups and meetings, again, because of the nature of our portfolio, we have fewer very large big-box hotels in the city centers. So that segment's a little bit smaller versus our peers. But it's actually been very positive, and we're seeing bookings up, really, around 25% as we look to the 6 months out compared to the prior year. So again, good momentum there. And I think it just supports the overall picture that we're seeing from a trading perspective. So Paul, do you want to just pick up on the asset view?

Yes, I mean, just briefly, Tim, our hotels in Paris and Hong Kong are very high-quality assets. We are doing some work, as we've talked before, at Salon Opera in Paris, which was some remedial work on the ceiling, which we'd flagged, and we're doing some of the rooms at the same time. But really, that's the sum of what we're doing on those assets. So there's nothing that would need to be done beyond that before we'd be able to look at all options.

So you don't want to reposition? You're fairly comfortable with where they stand?

I think that if there was a transaction on those, then a new owner might consider what they wanted to do. But in terms of what we're doing, we're doing Salon Opera and some rooms.

You're talking about -- it's a very different proposition to New York, which wasn't for repositioning. We saw that opportunity. These are very good hotels, well placed, well position in the marketplace, very different to the New York proposition.

And sorry, which was your 25% stat on group, was that not a U.S. stat?

Yes.

Your next question comes from the line of Jarrod Castle from UBS.

Two, if I may. Just in terms of the pipeline, some very good signings. Clearly, you've pointed to the momentum of the business and your brands. But overall, in terms of the industry, do you see other hotel chains kind of seeing an acceleration in terms of their signings going forward? And then kind of, I guess, total supply -- future total supply related to that. And then secondly, China, clearly, strong outperformance relative to the market. Do you see that continuing? And I guess, your RevPAR, current, call it, 4% run rate, would that see some acceleration in terms of what you're seeing at the moment on forward bookings?

Thanks. I'll pick up on China, and then I'll have Paul talk to you about signings. Look, I think, in China, it's a long-term gain in China. We've always talked about that. We've been there 30 years, longer than any other global hotel company. We're bigger than any other global hotel company there. And what you're seeing is the benefit of that. And so the systems that we have, the distribution channels that we have, the processes that we have -- and it's a managed estate in that the very high-quality operations that we have there, they've all driven that market outperformance that we've seen consistently for several years now as the benefits of our scale really, really kick in. And you've really seen that, again, this quarter. I think it's very hard to predict the future in China. And we don't give guidance, as you know. Our focus is on market outperformance, and the breadth of our business geographically within brand segments, a lot of the growth we're seeing there has been Holiday Inn, is now Crowne Plaza and Express in the upscale and upper midscale segments. And also the fact that because of the scale of what we have, whereas there has been a reduction in government business, no question, we've been extremely well placed to pick up other business and fill the hotels in different ways. So I think the GDP growth has been strong in China. Infrastructure investment has been strong. Clearly, the austerity program has impacted us. But I think, overall, very, very pleased with our outperformance and the profitability of continuing to see a growing China. Paul?

Hi, Jarrod. In terms of pipeline, yes, we had a really good quarter for signings in the North American market. And U.S. financing is better, which is helping us if you've got the brands and if they're brands that are really going to deliver. And particularly in the upper midscale, as you know, we're the strongest player by a long, long way. In terms of your question about what's that going to do to supply, at the moment, we're only running around 1%. And most industry forecasters don't see that changing in the short term. But if it does, then we've got 13% of the active pipeline and 5% of rooms open. So as hotels come on, we'll take more than our fair share and continue to grow our business. So either way, we have a reason to be happy.

The next question comes from the line of Guillaume Rascoussier from Exane.

Yes, 2 questions, if I may. One, on the China pipeline. Can -- have you seen any sign of longer delays? I think Starwood mentioned some, Marriott even, I think. So I wanted to get your feeling on it. And a second question on Amadeus. Can you at least give us some idea of the timing before you can reach first new product launch or refurbishment of your platforms, please?

Yes. Look, in terms of China, no, we haven't seen delays. I think. In any of these markets, there are sort of winners and losers. And we're very, very careful to choose the right partners who are well financed and have a long-term view. And therefore, we really haven't seen it. There was a little bit of a slowdown a month or 2 last year, but this year, absolutely not. And our signings rate has continued to be very good. In fact, we signed, I think, a hotel a week in China in the first quarter. So a lot of momentum there. And in terms of Amadeus, no, no, we signed an overall agreement. We're working with them, looking at opportunities, and certainly that would go on for at least a quarter of this year. So when we've got something to say, we will. But nothing more right now.

[Operator Instructions]

Okay, Andrea. Thank you, everybody. Appreciate the questions. Appreciate you listening. And obviously, if you have any more questions, you know where the team is. Give us a call, but thanks very much.

Thanks, all.

Thank you for joining today's conference call. You may now replace your handsets.