Good afternoon ladies and gentlemen, and welcome to the InterContinental Hotels Group Q1 Conference Call. For the duration of the call, you’ll be on listen-only. However, at the end you will have opportunity to ask questions. I will now hand over to our host David Kellett to begin. Thank you.

Thank you, Cray and good morning, everyone. This is David Kellett, Head of Investor Relations of InterContinental Hotels Group. I’m joined this morning by Paul Edgecliffe-Johnson, our Chief Financial Officer. Before I hand over to Paul for the discussion of our interim management statement, I need to remind you that in the following discussion, the company may make certain forward-looking statements as defined under U.S. law. Please check this morning’s press release and the Company’s SEC filings for factors that could lead actual results to differ materially from any such forward-looking statements. I’ll now turn the call over to Paul.

Thanks David and good morning everyone. Thank you for joining us today for our first quarter trading statement conference call. I’ll beginning with some of the key highlights in the period before covering each of our regions in term and now open the call up to questions. We did have the strong performance in the quarter across all of our regions and brands highlight in the continued momentum behind the business. We continue to execute our winning strategy and now focus on delivering preferred brand in scale markets driven global RevPAR up 5.9% on a constant currency basis. This reduce is to 1.5% on an actual currency basis, due to the continuing strength of U.S. dollar. For the rest of this call, I will focus on our constant currency results of a best demonstrate our underlying performance. We delivered net system size growth of 4.9% year-on-year, following the completion of the Kimpton acquisition in January. With our strongest third quarter for opening in five years adding 57 hotels and our strongest third quarter for signing in seven years to carrying more than 1 hotel a day. The Holiday Inn brand family already the largest brand in the industry by factor of two remains our engine for growth. Its accounted for nearly three quarters of our opening and over 9,000 room signing, which is the best performance to the brand in the first quarter since 2008. We also continue to develop the footprint of our industry leading boutique business. Hotel Indigo opened two markets Finland and Thailand and it’s now present in 14 countries. I mean already please to the progress we’ve made with expanding Kimpton since close in the acquisition in January. Opening three hotels and finding a further poll including two in Washington DC taking its combined open and…

[Operator instructions] And our first question is from the line of Christoper Agnew of MKM Partners. Please go ahead.

Thanks very much. Good morning. First of all wanted to touch on something you mentioned about potential uplift in demand from leaser gas in the summer, I just wonder how much visibility in summer booking trends you have at this point in the U.S. Thanks.

Hi Chris. Last year we saw a really strong summer with all leaser business and I think that’s an increase in the amount that people felt they had to spend and our midscale business tend to benefit from that and when we look at the dynamics such as cheaper fuel prices, history would tell us that we’re going to see the strong summer again, we can’t really see it in the booking trends yet but tend to book relatively late but is based on projections rather than looking at business on the books.

Got it. And what’s your visibility like in Europe, any difference, any more visibility particularly maybe Southern Europe. And any comments or thoughts about strength and inbound travel this year, I’m thinking about particularly strength in the dollar or maybe even the weakness of euro against sterling. Thanks.

Sure. So Southern Europe isn’t the big part of our business. Most of our European businesses in the UK and Germany and there’s a mix in the booking windows there. Some of it’s in Germany with our InterContinental for example is from the big trade fairs and so we have a reasonable amount of visibility and some of that is a bit cyclical because the big trade fairs may only happen every two years. Other than that, the booking windows are still pretty short in Europe. In terms of what might happen with currency and we’re quite strong for example, we’re quite well penetrated into the upper upscale and luxury segment, which has been weak in the first quarter, but we may see some U.S. business coming in given that the dollar has strengthened significantly against the euro, but a bit early to call that at the moment, but we’ll keep our eye on it.

And then last question around the IT investment with Amadeus. I note that Wyndham and Choice also have cloud-based GRS systems, so how much of the investment is defensive and that this is something that you have to have versus offensive? And if it’s offensive, why do you think so? And I don’t know if you can comment or talk to their systems, but I mean I’d be interested in like the differences on how investors should think about maybe the advantages of the investments you’re making? Thanks.

So I mean we’ve been working with Amadeus on that for a long time now. I think it is perhaps a little different to what some others have done in the sector. Amadeus is building out a platform that others can then put their front-end systems on which would be still personalized for each business, but it’s we’re not having to build our own back-end, that’s built and paid for by Amadeus. So what we’re building is the spoke system that we’ll put on top of that, so which I think is a differentiator for us. And I would expect that overtime we may see some of the other industry participants coming on to that as well, so there would be a common back-end, but we think this is the best way to do it. That bespoke front-end will allow us to offer more personalization and it will allow us to cross-sell better when we get that in, so we think that we’ll drive RevPARs but it’s a little while out before that will be delivered. In 2017 is when we’re going to have that new front-end system.

Okay. Thank you. Our next question is from the line of Steven Kent from Goldman Sachs. Please go ahead.

Got a couple questions for you. First, just on RevPAR, it looks like you modestly underperformed some of the industry data and some of your peers. Can you just talk to a little bit of why that's the case? Is it that Holiday Inn recovered and Holiday Inn Express recovered earlier? Is there some resistance to pricing, given the very high occupancies you're getting? And then look there's obviously lots of discussion about mergers and consolidation and opportunities, can you just give us how IHG thinks about these kinds of opportunities at the Management and at the Board level?

Hey Steve, thanks for the questions. So in terms of our U.S. RevPAR performance, we’re pleased with it and 6.6% growth mainly rate led. And if you look at what the other major peers did, there’s a slight outperformance to help and pretty much in line with where Marriott were. If you look at the industry as a whole, I think that it is averaged up a little bit more, but that’s really coming from some of the last-fill brands benefiting at this point in the cycle from the fact that the first choice brands are full. So if you look at what’s happening with independents and with some of the brands that are operating in a much lower price point and much lower occupancy than us, then they do benefit at this point in the cycle with all-time high occupancies. So I think you got to look behind some of the averaging in the industry and see what’s really happening there. So then in terms of your questions around and how we think about mergers, acquisitions, opportunities et cetera, over the last 11 years we’ve got a good track record of creating value through focusing on our brands, expanding those out organically, launching new brand, taking our brand into new markets, putting some capital behind that where we think it’s appropriate. We did that with Staybridge, we did that with EVEN, we’re building out some hotels and then recycling that capital and that’s also the preferred business model. We always do a buy versus build analysis when we see a new customer segment and taking that as an opportunity for us to deliver to guest in that segment and so we did that and that’s what helped us identify Kimpton as a business that we really wanted to acquire last year. We thought it wasn’t practical for us to get into that through just building that out and so we’re delighted that we managed to buy Kimpton and bring that into our table of brands and frankly there’s another opportunity exactly like Kimpton and we’re looking on another business like that because it’s got such high guest preference and it’s got such great position for its hotels that we think that’s a real asset to us, so that’s how we think about it. If we can, we’ll build out a business a sales road where there’s an opportunity to get something that has got really attractive then and if the value works then we’ll go after that. And in terms of anything that’s going on in the industry more broadly I know where your question is going around that, but we can’t really comment on any specific situations as I’m sure you’d expect.

Thank you ladies and gentlemen. [Operator Instructions] And our next question is from the line of Shaun Kelley from Merrill Lynch. Please go ahead.

Maybe just to follow up on that last question a little bit. You talked at length about the sort of buy versus build and I think it's an interesting way to kind of think about the opportunities in lodging. So I was curious, could you just elaborate a little bit further for us in terms of how you think about that? Is it really how long or how much ownerinvested capital would be necessary to build out like a luxury or a full service or in Kimpton's case I guess a boutique type of brand? Is that what you're kind of thinking about when you say the build versus buy or just help us think about that a little bit more?

So if you think about how long Kimpton’s been going and the locations that they’ve got for their hotels. I mean they got fabulous locations in some cities, it’s really hard to get your hotels in these days. So if you wanted to go out and replicate what Kimpton’s got, it would extremely difficult to do so even if you had you want to use out unlimited amounts of key money. The hotels aren’t necessary, it’s going to take you a long time to build that up. And then of course you got to build the customer preference and Kimpton is a brand which is really recognized by the guests who love that brand. So we were delighted to get that one and it would take a very long time to try and recreate that, so when we evaluate it what was the best to be in that boutique segment, we’ve done it with Indigo which we launched back in 2003 and over the last 12 years, we’ve taken that up to be in the largest brand of its type in the boutique segment and now in 14 countries, but that’s taken us 12 years so far. Kimpton was a great opportunity to get in and leverage what their previous management had managed to achieve over 20 years plus and so we brought it into the stable of brands.

Thank you. [Operator Instructions] We have no further questions coming through.

I will say thank you and thank you everybody for joining us today and of course if anybody does have any questions, please don’t hesitate to reach out to us, we’re always delighted to talk to you and look forward to catching up soon. Bye for now.

Thank you for joining today’s call. You may now place your handset.