Welcome to the InterContinental Hotels Interim Results 2015 Conference Call hosted by Richard Solomons, CEO. My name is Andrea and I will be your coordinator for today's conference [Operator Instructions]. I'm now handing you over to Mr. Solomons to begin today's conference. Please go ahead.

Okay, good morning, everyone and I am here with Paul Edgecliffe-Johnson, our CFO. So thanks for joining us, welcome to our 2015 interim results presentation which as you'll have noticed, we're holding by webcast this year which is designed to make life a little easier for you given the very busy schedule of results announcements that are going on today. So for those not logged in to view the presentation, just be aware that we will reference the slides a number of times to demonstrate some of our latest openings and innovations. So before I hand over to Paul, I'd just like to start with some of the highlights and our perspectives on the market. So we delivered strong underlying financial performance in the first half, driving global RevPAR growth of 5.1% and signing over 40,000 rooms, our best signings performance for seven years. The integration of Kimpton is progressing well and we continue to lead the industry with technology innovations and brand developments deeply rooted in our guest insight. July marks a significant milestone for us as we finalized our major owned asset disposal program with the agreement to sell InterContinental Hong Kong for $938 million. This is an excellent deal with a well-capitalized supportive owner. Once the transaction completes, over 95% of our operating profit will be generated through our fee business where the vast majority of earnings are tied to hotel revenues. And I'll talk later about how we're growing this revenue through our winning model, but first I'd like to step back and consider the broader market environment. As we've seen for some time, sector tailwinds remain very favorable with continued GDP growth driving the globalization of travel and a growing number of outbound travelers from emerging markets. International trips from China alone increased to 68 million in 2014 and are expected to reach approximately 100 million by 2023. Meanwhile in our largest market, the U.S., economic growth is leading to record levels of room night demand. I'll now hand over to Paul who'll talk in more detail about our financial performance so far this year and I'll return later to discuss execution against our broader strategy, particularly focusing on progress of our brands, building lifetime relationships with our guests and innovating through technology. Paul.

Thank you, Richard and good morning, everyone. We're pleased to report another strong financial performance in the half year with solid growth in fee revenues across each of our four regions, as global demand for hotels operating under IHG's brands increased once again. As in previous years, the year-on-year comparability of our total revenue and operating profit are distorted by the impact of owned hotel sales, significant liquidated damages, the performance of managed leases and foreign exchange movements, details of these items are included on slides 36 and slide 37 of today's presentation. I will focus my attention this morning on our underlying performance using constant exchange rates to provide the best explanation of our financial performance. On that basis, we increased our fee revenue by 9% and underlying profit by 10% through careful cost management. Our fee-based margin for the half of 46.8% increased 180 basis points year-on-year reflecting the benefits of our global scale, but also that our costs this year will be weighted more towards the second half. Consequently, we expect our fee-based margin to normalize to reflect an approximate 100 basis points increase for the full year. Higher interest charges were offset by an 8% reduction in weighted average shares and in aggregate this enabled us to deliver 25% growth in underlying earnings per share, year on year. Our underlying 9% growth in fee revenue was a result of continued increases in both RevPAR and net system size, in each of our four regions which grew by 5.1% and 4.5% respectively. That 5.1% RevPAR growth is on a comparable basis, so excludes the impact of our new hotels that are still ramping up. Including those in lower RevPAR developing markets such as Asia, the Middle East and Africa and Greater China, our total RevPAR growth, including…

Thank you, Paul. So our winning model remains at the core of our success and continues to deliver high quality growth. Preferred brands, a leading loyalty program and effective channel management are key components of the model and form the basis of our commercial strategy which I introduced to you this time last year. Effective commercial execution ensures a superior guest experience and we've made significant progress across all three of our focus areas, as well as continuing to innovate with our digital solutions and developing a market-leading guest reservation system or GRS. Before I talk more about technology I'll touch on the progress we're continuing to make with our brands. I'll start with Holiday Inn and Holiday Inn Express, the world's only truly global mainstream brands which we relaunched eight years ago and have made significant strategic progress since then. The brand refresh remains the world's largest ever achieved with the $1 billion investment program continuing to provide a platform for market outperformance and accelerated global growth. Since the refresh started we've relaunched 3,300 hotels, opened a further 1,500 and removed over 1,000, reducing the average age of the estate to lower than all of our major competitors. The positive outcome from these actions and our emphasis on quality has driven guest satisfaction levels to an all-time high and this has been recognized across the industry with Holiday Inn winning the prestigious J D Power award for guest satisfaction in mid-scale full service, four years in a row. Our focus on guest experience has driven market-leading financial returns to our owners and since the refresh launch we've driven consistent industry outperformance, growing the brands' RevPAR premium by more than 5 percentage points in the U.S. It is this delivery which makes the brand family so attractive to guests and…

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

I have three questions, first. First, on Kimpton, you've lost a few hotels, you've given us modernization guidance, through the synergies you've mentioned, lots of moving parts, could you just help us give a range of annualized run rates of EBIT, at the end of this year, please? The H1 contribution was quite big, because of the LDs. Secondly, I may have missed it, because I jumped on late, but the - your OTA mix, I think when you last reported you said that your direct channels were starting to take a bit of share. Could you give us an update on those numbers, please? And finally, just the inevitable question on industry consolidation; do you have any comments you could specifically with regards to Starwood? And do you have any specific interest in either Fairmont, Raffles or Interstate? Thank you.

Why don't I take the last two and Paul will pick up the first one. So just in terms of industry consolidation, we never comment on speculation, of which over the years there has been lots, as you well know. But I do think on consolidation, the thing is that the focus for us and actually for many of our competitors, has been on effectively organic consolidation. And if you think about the fact that we have 5% of the world's rooms, 13% of the future pipeline, we're driving considerable organic share. And the level of signings that we've seen in the first half, higher than we've seen for seven years, I think demonstrates that we've got enormous growth prospects as a standalone business. As far as OTA mix goes, I think I did reference, we've focused a lot on driving our direct channel business, because I think that works for a lot of guests and it certainly works for owners, in terms of returns. And the results have been very strong. I mentioned the pilot for what we've been doing in the UK which is about driving value for guests and helping them understand what they get direct. So we absolutely have continued to see that our direct channel growth has been exceeding our OTA growth. But having said that, I think our view about OTAs, is they are an important channel, relatively small for us, but an important channel and where the business is incremental and profitable to owners, we're very happy to have it. But clearly for a lot of our guests, booking direct is the most effective way. And clearly the relationships that we're building up through our various innovations, including through Rewards Club, creates very sustainable, very valuable guests. So we'll continue to push that, but continue to work all of the channels. Paul, do you want to pick up on the Kimpton question?

Yes sure. So, Jamie, there are a few moving parts in this and we tried to pull them out in this release. And there is a liquidated damages receipt and the amortization is starting to come through now. If you look at the half year, less the liquidated damage receipt and you were to annualize that, for the full year, then you're going to come to about the right number. There's a few moving parts in that, but overall it wouldn't take you to anything that was materially out.

And, Richard, just back on your comment about consolidation, does the focus on organic mean that you would not be interested in a bigger transaction were one to come around?

Look, I said, I don't want to be drawn on speculation. We obviously acquired Kimpton earlier in the year and I think if we talk about strategic gaps in the portfolio, we'll look at different ways of filling it. But certainly our focus is on organic.

Presumably bolt-on deals are therefore judged to be more organic?

Well, Kimpton was a bolt-on deal, so I think we're always looking to grow the business, we're always looking to service the guests through a portfolio of brands. But I don't think anything more specific I'd say on that.

Perhaps you could remind us where the brand gaps might be, if other brands came up for sale or where your key focus--?

There is nothing standing out. I think if you look, we've seen good revenue growth and good signings and system growth really, around the world. So I think we're not in super luxury, we're not in economy, we're where all the revenues are. So I think in a way, anything that enhances the overall portfolio is what makes sense to us. And ,obviously, the insights that we have in the marketplace, led to us to launch HUALUXE and to launch EVEN and Kimpton was a very effective add-on to our existing boutique business. So I think we look at it - we look at anything in the way we look at growing our business where our customers are.

The next question comes from the line of Tim Ramskill from Credit Suisse. Please go ahead.

Three questions from me, please. The first is just around exits. I guess a couple of things. The pace of exits in the first half does seem quite significant. I wasn't quite sure whether the Kimpton - the seven Kimpton disposals you've talked about, were in that number or not. And then more broadly, I guess we were probably led to believe that exits were going to reduce. Thinking back a couple of years, when there were a lot of things exiting Holiday Inn, that now seems to have stepped back up to a 2% to 3% consistent expectation. I just wonder if you could comment on what changed in your thinking over that couple of year period? Secondly, I'm going to also ask a question about consolidation; maybe you could share with us your thoughts as to how there may be revenue synergies from combining two larger players. In particular, as to whether having full representation across all segments is helpful. Do you see that as a potential source of upside for those who don't have that? And then the final question was just in terms of the overall U.S. RevPAR performance. I know you've had a little bit of exposure to some of the oil and gas states that have been quite effective, but I'm struggling to see who's reporting numbers out there, that are as good as the STR at the moment, for Q2. So, I just wondered if you had any thoughts on the differential between your 4.8% and the STR numbers of 6.5%.

Tim, look, on consolidation, say, I don't think there's anything really to talk about. I think I covered that all in my conversation with Jamie. Paul, do you want to pick up the other two questions?

Yes, sure. So, Tim, in terms of the exits, I think what we've seen in the first half is similar to what we saw last year, in that you'll see that a few more of the exits in the first half and a bit more of the openings coming through in the second half. So, yes, we called that out particularly last year, because it was a bit more unevenly weighted. But it will be more weighted to the first and the second half again this year, not quite to the same extent. In terms of our position on quality, I don't think that's really changed over the years. We try and give you guidance and say, look, it'll vary a bit year on year, as when hotels come up to the end of their contract and we decide whether or not to keep them. But 2% to 3% is a decent range to work to. In this current environment, when we're signing so many hotels, it does give us the opportunity to up-weight the overall quality of the estate. And you think that we signed 41,000 signings in the first half, our largest number since 2008 and we've got 214,000 rooms waiting to come on stream, then it does give us a little bit more confidence to take out some rooms, knowing that they're going to be replaced, because we want to have the highest possible brand portfolio that will drive up long-term guest love. In terms of the U.S. RevPAR performance; yes, I commented on the mix of our business. About 13% of our hotels are in those oil-producing states which is more than the industry which is about 10%. So we're a little bit overweight there. In terms of who is beating the average, I guess, what you've got at this point in the cycle is some of the economy brands and I guess some of the unbranded operators, who may have low occupancy and low RevPAR and are perhaps not guests' first choice. But with occupancy of our brand so high, maybe sometimes guests are having to go to their fourth, fifth, choice brand. So I think that's what we're seeing, it's consistent to what we saw at the first quarter.

And so were those - on Kimpton, were those exits in the first half or were they--?

I'm sorry, Tim. No, that's not in the first half numbers.

And can you expand on what that issue was, because it's losing 10% of the business you just acquired, it doesn't sound like that was part of the plan. So what's caused that to happen?

When we bought the business, there were some properties that we took a perspective on as to whether or not they'd stay with us longer term which is what you'd expect in an acquisition like that. And these are some of those that we identified as might decide not to stay with us. And so they've moved on for a location-specific issue that has nothing to do with the brand, has nothing to do with IHG really. So it is localized. And it's specific to that one circumstance, so nothing really more to say on it, Tim.

But they were profitable, but you wanted to get rid of them or--?

I think it's a situation that is local to those hotels. And it's not representative of the broader business. So nothing more I can really say on that.

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

Can I start on RevPAR, please? Thinking of that America's 4.7% in Q2, some of your competitors, I think, have been talking about Q3 being slower, citing things like city wides and Jewish holidays. Is that your expectation as well? Or does that apply to you guys? And then, I guess, in terms of the closure of the Hong Kong deal, do you think it will take as long as the nine months that Paris took? And if an opportunity to spend the money came up before then, would you temporarily stretch your leverage target? Thank you.

We're less distributed, as we've talked about before, into some of the big group cities, so New York and some of the others where some of our competitors have very large group boxes. And they do tend to then get impacted a little bit more by some of the holiday movements. So, I wouldn't expect us to be impacted in quite the same way there, no. And in terms of Hong Kong, we've said that we expect it to close in the second half. The Paris closure was particularly long because of the regulatory process you have to go through in France and consultation with works councils, etc. which is abnormal. And if you look at our normal pattern of disposals, it's normally much quicker. So I wouldn't expect that it's going to be another nine months' delay.

And in terms of how you might apply the funds if you needed to before the end of the second half?

We never really comment on what we might do with funds before we've received them. I think that's just - that's not our policy. So we've said that when it comes round to prelims we'll say more then.

The next question comes from the line of Nick Edelman from Goldman Sachs. Your line is open.

A few questions, please, firstly just again coming on to the outlook for U.S. RevPAR. Obviously, as well as the points before, the growth rate last year steps up quite significantly as we move into the second half. Are you broadly anticipating a slowing RevPAR trend to continue here? Second question is around the pilot of the price promise in the UK. In terms of the 10% lower price your members have, is that still a pilot stage? Are you testing that and seeing where the right level is? Or is that a confirmed lever and then you'll look at whether you roll that out more broadly? And thirdly on CapEx, even taking into account the system fund CapEx being $100 million and key money being weighted for the second half, it still looks like you'll be lower than your $350 million gross CapEx guidance. Is that fair? Or is there just more CapEx to come through second half versus first? Thank you.

I'll just take the one on the price promise and then Paul will pick up the other ones. Actually, what I said was up to 10%. So we've been piloting different things. The research is very interesting as to why consumers go to online travel agents or why they go direct. And there's obviously many aspects to it. One of the key aspects is they believe they get a better price on the online travel agents which is to do with, obviously, the billions of dollars that the online travel agents spend telling them they get a better price. The reality is they don't get a better price because of the price promise we already have. So what you're talking about is once consumers get confident that the price promise on our own website is real, then they believe it and they carry on booking with us. So you're talking about, depending on the circumstances, depending on the hotel, some better price. But if you think about the level of commission that the online travel agents charge for the hotel owners, it can still be much more profitable to offer a better price to a closed user group which is why it's done through - to actually Rewards Club members. So what this - this may have an impact on headline pricing, but it has actually a very positive impact on hotel profitability. So it's a very good thing overall. So I think what you get is, on the one hand if you believe that the price is as good as or lower, on the direct website, then you'll want to book there. The second thing is there's real value in the loyalty program. And with a combination of those two are very powerful in terms of delivering a proposition to customers who want value. And value is partly about price, but also about other things that they get. And so as I said, I think what we're seeing is a very, very, positive uplift on that UK pilot. The circumstances are different in other markets but the concept will be broadly the same. And I think, where there are customers who want something, in terms of an overall experience with the brand, it will work very well. So don't forget, the online travel agents are predominantly focused on price-sensitive leisure travel which is never going to be cost effective for us to try and bid for. But we can effectively target through the OTA. So I think what you're doing is stratifying your channel mix much more sharply which is obviously what's good for the brand and good for the owners. So I think it's an interesting pilot that's performed, probably ahead of our expectations and extremely well. Paul, do you want to pick up the other two?

Yes, sure. Nick, thanks, your comment on CapEx; I've talked before about the three individual buckets within which we spend our CapEx. And in terms of the permanent CapEx bucket of maintenance and key money, I think that will cycle through to around our guidance of $150 million for the year. Then we have the recyclable CapEx which goes behind joint ventures and things like our EVEN hotels that we're building and then we'll move on at some point. That can be a bit more variable year on year. And that may come in a little lower. We'll see what happens, where opportunities come up in the second half. And then we have the system-funded CapEx and I think that will be in line with our guidance. But I think you will always see more volatility in that recyclable CapEx line. Some years we'll get more in as we make some disposals; and some years we'll put more out there. In terms of U.S. RevPAR and yes, you'll have seen last year's numbers, obviously, so you can see that the RevPAR accelerated through the third and fourth quarter. We're really now in a point of the cycle in the U.S., where you've got record levels of occupancy, so you're trying to maximize rate growth which we do through our rate-optimization technology, so that we take the strong demand and then try to get the best possible rate for it. So, with the level of occupancy that we're seeing, yes, we can still push rates and summer is normally pretty good for us. But as you note, the second half last year was very strong, so we'll have to see how the numbers come out for the second half of this year. But no particular guidance that we can give, more than what I've said already.

The next question comes from the line of Patrick Coffey from Barclays. Please go ahead.

A few of my questions have been asked, but just a quick one. You talked about America's RevPAR and the exposure to oil and gas. Could you just quantify that, so what percentage is exposed to oil and gas states in any way? Thanks.

So, about 13% of our revenues are from oil and gas producing areas. And the industry as a whole is around 10%. So we're a little bit overweight to those areas. And they've been broadly flat in the first half which has been a little bit of a headwind on the performance which otherwise for the Americas would have been at - for the U.S. would have been at 6.5%. So we do try and pull that out just so people can see the underlying performance.

The next question comes from the line of Jarrod Castle from UBS. Please go ahead.

Three questions if I may, please. Just on the signings, obviously a very, very strong first half. And as you said, since 2008 you hadn't seen such strong signings. So two things; one is, do you think people are seeing that across the market; and secondly, does it say anything about the - where we're in terms of the cycle overall? Second question, can you just give a bit of color in terms of Greater China, the split between Hong Kong, Macau and Mainland, just in terms of the mix, if you can? And then, just to get some views in terms of - we've spoken a lot about OTAs, but just about the metasearch providers and just also in terms of instant booking that TripAdvisor's providing. A number of brands have joined it, some brands haven't. Can you give your views on that? Thanks.

Let me take your first and Paul will pick up and talk a bit about China. I think in terms of signing, effectively what you're seeing is people investing in the industry because they see long-term growth prospects. And financing is a little more available. I wouldn't say that the floodgates are in any way opened and so we've been seeing quite, consistently now, both in China and U.S. and other parts of the world, an uptick in signings. But I do think you're seeing some polarization here and you go back and look at my comment about the 5% as supply 13% of the pipeline and frankly, if you look at the other big players, we're all broadly in the same shape. So this polarization in the industry where capital is moving towards the big brands that can, not guarantee returns, but give you much higher surety of returns, is continued. And so the share gains that the big players are making will, I think, continue. And our view is that the - certainly from our perspective, the quality of the deals that we're signing now are higher than they were in - pre-Lehman and when money was so easily available that almost anybody could get money. So I think going forward with 200 and - over 200,000 rooms in the pipeline, 100,000 of them are under construction. So these are real deals happening. So I think it is somewhat brand-specific and we're certainly benefiting from the flight of capital to quality which is what we're seeing. Just your point on metasearch, instant booking and so on, it is a very complex arena, the online channels. It's just - there are so many players now. It's almost hard to keep up for the average punter which is one of…

We've talked before about how the China business for us is really split into the Tier 1 market, where you've got strong demand but supply is really slowing down. And then the Tier 2 and Tier 3 cities where there's all the supply coming through which a lot is us, demand's good as well but you just got that - the combination of supply and demand making it harder to push RevPAR. And we saw that again in the first half and through the second quarter. So, our comparable RevPAR across the Greater China region was up 1.5%; but the Mainland China business was up 4.8%; and the Hong Kong and Macau RevPAR was down 10%. And just to give you an idea of some proportionality, we've got about 6% of our rooms in the region in Hong Kong; and about 3% of those in Macau. But that does average us down. And as you look at those numbers, you will I'm sure pull out that they are a long way ahead of the industry which we've seen for some time now. So it's about a 5% RevPAR industry outperformance, based on the greater competency and the greater brand recognition that we have over there and built up over the years. And so that's one of the numbers we really focus on and the owners really focus on as well. So all goes well for our future growth there.

And maybe just one more quickly, if I may, just on digital channels. Any changed thinking in terms of shared accommodation and the threat to your business? There has been some changes in terms of Airbnb's listings have nearly doubled in the last 12 months. I see your previous CFO now is working at onefinestay. And secondly, some of your competitors have started to take investment in the space, namely Hyatt in that platform. But you're still quite relaxed about life and the potential disruption?

We're never relaxed about life. But look, I think it is an area we take a lot of interest in. We're very, very plugged in to what's going on and we know a lot of the players, if I just leave it at that. But the reality is that the misnamed sharing economy, because obviously it's a business, is here to stay. At the moment it's very, very small, it's very leisure focused. Airbnb are making a lot of noise, obviously, because of the Silicon Valley dollars, looking to have a successful IPO. Don't forget that HomeAway which has been around for a long time, is significantly bigger. Wyndham is very heavily in that business, has consolidated heavily and basically room rental or property rental. So this is not a new business, at all. At the moment, as I say, it's very small relative to us. I think if you think about the attributes to that business which is about having a clever, powerful reservation system, effective routes to market, big reach and the ability to handle a brand, that's what we do. So I think our approach to it is, again, keeping a close eye on it. If it's a business where we think our guests and our ability to deliver is valuable, then it's something we'll look at and we'd obviously be able to do very effectively. But as a source of competition it's small in a market that is growing heavily. I think if you look at, other than the need for accommodation, hospitality, we've got the hotel sector, we've got our heavily growing vacation ownership sector, we've got a fast-growing cruise sector in terms of vacations. So I think what you've got is, this is just a new dynamic and obviously because of the model, Airbnb are making an awful lot of noise, but it's not a new competitor. And of course, a large number of people for very many legitimate reasons, want hotels. There is a small cross-over at this point of people who actually want to be in an apartment. And, of course, the whole unregulated nature of that market is attracting the attention more and more of regulators. You'll have seen all the stuff around Uber. And I think it is important that consumers are protected and there is some real dangers, particularly with the Airbnb model, of a lack of regulation and a consumer misunderstanding which I think we're hearing governments talk more and more about. But it remains - that said, I think it remains an interesting business opportunity potentially, albeit at the margin right now.

The next question comes from the line of Geof Collyer from Deutsche Bank. Please go ahead.

Three completely unrelated questions, I normally only ask two. So I thought I was being quite good today. They're all quite - well two of them I think are quite short. Did you say that people that stay in your resorts in the U.S. spend 70% more than the average U.S. guest and have you been able to track how that works outside the U.S. or is it just too big a market? Secondly, on the price promise issue, how does this square with the OFT Statement of Objections back in 2012 to the tie-up you were doing with booking.com and Expedia. And then thirdly, more of an issue, I know supply is still growing broadly in line with the long-term growth in the U.S., but going into next year, supply in the midscale market and upper midscale and upscale in the Holiday Inn portfolio is growing two or three times the long-term average, how concerned are you about that in terms of occupancy and rate for the Holiday Inn business next year and going forward?

Yes, the vacation ownership, currently we only have that business in the U.S.. And what I was really referencing is that it's true, actually, for a lot of leisure businesses, it's true for resort customers generally, they have a much - they have a very strong affiliation to the brand because it's about their leisure time and their personal choices. So what you're getting with resorts, holiday and vacation club, is the fact that you've got very invested and engaged customers who, in their hotel spend, they effectively spend 70% more than the average. So it's a valuable source of customers, it's very linked to rewards club and obviously investing heavily in the Holiday Inn brand. In terms of the price promise. The OFT - the specific UK issue in the past which was resolved with no criticism at all of us, I think what's going on, if you look in France, recently, some other European markets and the European Commission, is taking an interest in some of the contractual requirements of the OTAs around mostly the nation status and so on which can have an impact on consumer competitiveness. What we're doing in our piloting in the UK is a closed user group of Rewards Club members which is clearly something that is appropriate and we're enabled to do. So I think our focus is on - genuinely on giving a very clear proposition and a value proposition to our customers. Nothing we're doing is remotely impinging on any competition issues which, as I say, are being looked at in detail, but more around looking at the OTAs and their business practices and not around the hotel companies.

As you know the long-term supply growth in the U.S. is around 2% and the forecast from STR for next year is around 1.7% growth and it's similar for the industry as a whole and for the upper midscale segment where you're going to see Holiday Inn and Holiday Inn Express. I think the PKF numbers are marginally higher than that, but they're still below the long run average. So that's the top line. But the other point that we always make is that, we like new supply because we take such a higher proportion of it than our current market share. So you look at the number of rooms that we're signing, as those come in we're just going to continue to add more rooms and so we - if you look at, say, China, where you haven't got a lot of RevPAR coming through, you've got a lot of rooms coming through and we're growing our fee revenue there at the highest rate anywhere in our business. So, we can increase our revenues either from RevPAR growth or from new units. So as long as we're taking more than our fair share which we typically do, then we're okay with new supply coming into our market.

The next question is a follow-up question from line of Tim Ramskill from Credit Suisse. Please go ahead.

Just hopefully a couple of real quick ones. So, just back on the price promise, just wondered where you might go with that next. So is this likely to be something you perceive relatively quickly into your main market for U.S.; and related to that, are any of your peers, that you are aware of, trying anything similar right at the moment? And then just on CapEx. Obviously you've laid out the parameters for the longer term. Given the material disposals we've had, obviously, in the last few years, has that had any impact on the maintenance CapEx element of that long-term guidance? Thanks.

Okay, Tim, look on price promise, I can't talk about what our competitors are doing. I think, for us, as I said it, it's market by market, it's making sure that our direct channels are effective, give value and that there's very clear messaging to our customers about where they get value, because at the moment there's been a lot of noise in some of the indirect channels which, frankly, don't give value because there is no price advantage. So, we'll continue to make sure that the message comes through and what we see is a very, very clear response from a lot of our guests. They like it and it gives them confidence to book direct. And I think the fact that we've effectively put the pricing on the website, if you go and have a look, you can see it, that show we give value, again is part of giving confidence to customers. So we shall continue to take that philosophy elsewhere and we'll continue to drive share.

Sure, Tim. So, absolutely ,in terms of the fact that we don't own these properties any more, means that we have a lower property CapEx element. But we've reflected that in the permanent CapEx and where we talk about in terms of maintenance and key running of $150 million means the balance is shifting a bit, it's going more towards maintenance of IT systems, our corporate IT systems and less towards property level capital. Of course ,we now avoid the lumpiness that we had in the past of major refurbishments that we saw at, say, Le Grande 10 years ago and then in London 2006, 2007 when we had to put in $100-odd-million of capital. So as they're no longer under our ownership that's not part of our cash flow any more.

But the IT side, it's still effectively needing incremental cash versus a few years ago?

To the margin, if you think of the big IT systems, say the GRS, for example, that's part of the system funded expenditure, so it's not in our IHG systems. But you do see a shift, it's just not huge.

There are no further questions so I'll hand you back to Richard Solomons to close today's conference. Please go ahead.