Welcome and thank you all for standing by. At this time all participants will be in listen only mode until we reach the question and answer session. [Operator Instructions] Today's call is being recorded. If you have any objections you may disconnect at this point. I will now turn the meeting to our host Mrs. Heather Woods, Ma'am you may begin.

Thank you Anjay and good morning everyone. This is Heather Woods interim head of Investor Relations at IHG. I am joined this morning by Paul Edgecliffe-Johnson - CFO. Before I hand over to Paul for the discussion of our results, 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 Heather. Good morning everyone and thanks for joining us today for our third quarter trading statement conference call. I’ll begin with some of the key highlights in the period before covering each of our regions intern and then I’ll open up the call to questions. We delivered a solid performance in the quarter, executing against our winning strategy and leveraging on global scale. This drove net system growth of 3.8% year-on-year and global RevPAR growth of 1.3%. We continued to broaden up portfolio of brands, adding more than 19,000 rooms into our pipeline, our fastest third quarter signing rate since 2008. This takes our pipeline to 230,000 rooms which represent a 14% share of the global industry pipeline, more than three times our existing supply share, they sets us up well for continued organic market share gains. We opened 7,000 rooms in the quarter and removed 3,000. Consistent with previous years, we expect our pace of openings to accelerate in the fourth quarter. Our ongoing focus on the quality of our portfolio means we have continue to exit rooms from the system and we expect fourth quarter removals to be in line with the average of the previous three quarters. Looking now to our brands, where our development efforts are focused on both broadening of footprint of our established brands as well as gaining traction for our newest once. The HolidayInn brand family is our main engine for growth and our innovative new design solutions Formula Blue for HolidayInn Express in the Americas and Open Lobby for HolidayInn in Europe and the Americas are driving good momentum. We signed more than 13,000 rooms for the HolidayInn and brand family in the third quarter, our best performance for nine years. In its 70th anniversary year, we are reinforcing InterContinental Hotels…

Absolutely sir, thank you. We will now begin the question-and-answer session [Operator Instruction]. Our first question is from the line of Mr. Stephen Grambling of Goldman Sachs. Sir, your line is open.

First, one clarification I think in response to the earlier call, you had mentioned an impacts from Your Rates on ADR and ability to average up the overall rate. Can you just flush out the puts and takes there, is it simply a neutral impact with growth and loyalty, any color will be helpful.

We have highlighted this few times, including when we piloted Your Rates last year with HolidayInn Express in the UK to say, although through this discounted rates we are offering a lower rate to be able take it up. It's not impacting on the overall ADR of the hotel through revenue management. So we are revenue managing all of the channels to take out some cheaper business and we’ll replace it with the Your Rate channel. So it's not having an overall reduction on to rate in the hotel.

Great and then maybe a bigger picture question on yield management, when you look at rates realize for any given night, where would that be versus where it was trending one week or one month in advance? And how is that trajectory evolving?

It's complex question Stephen. It is -- the nature of our business is that we don’t have as much group as say some of our U.S. competitors. So we tend not to have as much business on the books. So we do have shorter booking windows. So perhaps we won’t have as much visibility as we might get if you asked some of our U.S. peers. Not a lot of color that I can actually really give you on that right now.

And then I guess one last follow than up if I could, it’s just on the roll out of the cloud based reservation management program. Can you just talk about some of the expected impact, what you are trying to get out of that?

Yes, sure happy to. There is some more information on our Web site from our recent capital markets day around this. Our new program with Amadues will allow us to market the attributes of the room more effectively, once we bring it on the stream and it's coming in 2017 in pilots and then it will be rolled out after that. So we will be able to revenue manage better rooms, for example have a better aspects of a higher floor, there is particular features to that room and both in terms of offering guest precisely a room that they want, but also when there are attributes to that room that will allow us to price it higher or differently, not allowing us to do that. After adding an additional feature more easily additional services to rooms and events, et cetera. So there is a lot of benefit it will bring in overtime.

Thanks. I’ll jump back in the queue. Thanks so much.

Our next question is from the line of Mr. Chris Agnew of MKM Partners. Sir, your line is open.

First question, can you quantify or approximate the impact that the holiday had in the third quarter in Americas?

Sure, do you want to go through with your questions and I’ll tell them in time.

Yes sure. And then I was wondering HolidayInn franchise business in Americas under performed in the quarter, I mean HolidayInn Express, it was a little bit better. Just wondering if you could maybe give a little bit of color on the performance there? And then final question is on the oil markets, you mentioned that you are starting to run into easier comps, but supply will still be a headwind, should we expect to still see RevPAR declines in oil markets as heading into '17? Thanks.

Yes, so taking that last one, the oil markets. When you look at sequentially the impact we had last year fourth quarter 2015, the big impact, we were sort of down 10% and change there. So we are in the fourth quarter 2016 coming up against an easier comparable, but what we're also seeing is that supply is higher in the oil markets than it is across the rest of the U.S. business and you are up at about 3% supply there. As we move into 2017, maybe we'll see flat demand, but we also may see supply up around the 3%. So that's going to continue to push down on the RevPAR in that market. Exactly how much, hard to call, but we do see that continuing to be some negative pressure there. In terms of your first question on the holidays, I mean there’s a balance there between the holiday shift the Jewish holidays moving between September and October. But then is also the timing of the 4th of July, essential [ph] was 4th of July, it’s just whether it's a weekday or a weekend. So the balance between those two is pretty small, I mean you're talking at 10-20 basis points something like that. In terms of the brand performances I mean HolidayInn Express is more exposed into the oil market, it’s got an 18% penetration into oil. So it was more impacted, so we did see some underperformance against the segment performance there and HolidayInn outperformed with a lower penetration to the oil market.

Got it, thank you.

Thanks Chris.

Next question will be from the line of Mr. David Katz of the Telsey Group. Sir, you may proceed.

So with respect to direct bookings which is one of the key trends that the whole industry is focusing on at this moment. Do you disclose what percentage of our room nights or any metrics around the OTAs and the degree to which you're using them and where is that number moving? Is it higher today than it was a year ago and where might you expect it to be a year from now.

We try and put out information, not as quarter-by-quarter because that just don’t think that’s that meaningful around what's going on with the ATAs and what's going on with our direct web channel, and what we've seen since we launched Your Rate is that the growth in our direct channel contribution has been increasing and so it's faster than the growth that we're seeing in the OTA channel. So still seeing growth in the OTA channel, but the growth in our direct channel is going faster than that.

So the OTA growth is still positive but at a decreasing rate since you launched more direct.

Exactly, you got it, [multiple speakers]. And you know we’re talking about it, we're happy to get some OTA business when it's not displacing business that should come through our direct channels. It's a good sort of business for us.

With respect to RevPAR as we get into the lower RevPAR growth portion of the cycle, is there a point at which irrespective of your unit growth you are at essentially earnings equilibrium. You know the point at which you know earnings growth is negative relative to RevPAR growth, are we sort of at that point now?

I guess if you look at the shape of what's been going on in our business, so we’ve always talked about the multiple drivers of growth. So we’ve got new unit [ph] additions and that's been reasonably good so far this year. And then there is RevPAR and then there is the benefits that we bring to our continued margin accretion into the business that drives our top line growth down to a better EBIT number and then your over time, the cash that we return to shareholders and the stock that we retire all adds into that model which is self-reinforcing. And I don’t think we're seeing anything particularly different to that in the numbers we’ve put out today. If you look at the underlying U.S. performance away from those oil markets we continue to see a reasonable growth 2.5% up and third quarter of 2015 and 2014 were strong quarters with 6% RevPAR growth in each. And then in Europe, absent the drag from the markets impacted by terrorism actually we saw pretty strong growth there, Asia, Middle East and Africa. Outside the Middle East we saw 4.5% growth there and then China continued to grow nicely. So there is lot of growth in the business, both same store sales and new unit and then we continue to add to that through our efforts on efficiency and driving the bottom line.

Okay. Thanks very much. I may have more but I’ll come back around.

Great, thanks David.

Our next question is from Mr. Dan Wasiolek of Morningstar. Sir, you may proceed.

Just looking at the pipeline on a year-over-year growth trends here, I was wondering if you might be able to provide some outlook commentary specifically and the AMEA segment, whether you seeing some cancellations there or hesitation that’s been impacted by the oil markets? Thank you.

So as you imagine with a pipeline the size of ours there are always some contract that move faster than others. Our fastest rooms through the pipeline, will that would be the conversion, but in terms of new build of our fastest will be our HolidayInn Express in the U.S. market that’s moves through pretty quickly. And then our larger boxes in Middle East and Africa and Greater China that bigger real estate so they take longer to build. In some markets in the Middle East you are seeing a bit of slight down, people are being more cautious. It's at the margin, it's not something that I would say is a particular drag on where our net system sized growth is going. And we have seen some really strong signing coming through in other markets which are been going well in South-East Asia, in Vietnam, Thailand and India and Australia, where we are seeing good growth coming to that. So I think that will sort of balance each other out.

Okay thank you very much.

Thanks Dan.

Our next question is from Mr. David Loeb from Baird. Sir, you may proceed.

I just wanted to ask about the financing environment for franchisees and to follow that if you are seeing industry consolidation particularly the Marriott Starwood combination and the basically the concentration of select service brands within Marriott and Hilton have any effect of franchisee appetite or lender appetite to do construction on most of the franchisees?

Thanks David, I think when we look at the capital market environments for real estate financing for hotels, the large ticket lending is getting more challenging. Loan to value is probably coming in a little. But that says its still guessing financed, it’s just maybe with little less debt in the capital stack than you might have seen a few years ago or in the last cycle. The availability of capital to our franchisees which is mainly through the regional banks, actually we haven't seen a big change in that, these are avenues that have strong covenants and strong banking relationship and they are still able to access financers. We have seen through our -- continued very strong rates of signing right throughout the year which we haven’t really seen any slowdown in that at all. But they are selective going to the brand owners with the best brand, the best system, et cetera and brands that offer strong cash on cash returns like HolidayInn Express HolidayInn and our extended stay brand. So we see that as a long term advantage for us. In terms of anything we might see with Hilton and Marriott, I don’t think that’s anything that you’d expect to see at this point so closed into the Marriott merger with Starwood that would be meaningful. And Hilton’s brand and our brands are being financed largely by very similar lender, don’t think there is anything I can call out there either.

Okay and one quick follow up, if you don’t mind. As you look at constructions starts given the uncertainty in the environment, are you seeing any slowdown or some of these franchisees that have financing, have franchise license, are they slowing down their starts or do you think that starts stay pretty much on scheduled?

We do monitored that pretty closely as you can imagine and we are seeing the starts continue as they have been. So we've seeing no sequential slowdown through the year and -- but we are certainly keeping that under observation, but I've seen no sign of a slowdown.

Great, thank you.

Thanks David.

I would now like to open Mr. David Katz of the Telsey Group to proceed with his question, sir you may go ahead.

My question was really around David's first question which is around the population of limited service brands that will now be under the Marriot and brands in general quite frankly that will now be under the Marriot umbrella and presumably their distribution should accelerate in some cases and or in other cases certain brands may you know be moved within their positioning or even go away. Do you have an expected impact on your business or benefit for that matter? How are you thinking about that deal as your development people go to market?

I am sure that [indiscernible] in due course we'll come out and say what it plans for -- for their brands are, and how that's all going to fit together. I don't think it'll be appropriate for me to -- even if I had a view to comment on how that's going to turn out. Certainly we have some of the strongest brands out in the industry and we have owner who've been with us a very long time and they enjoy the very strong success that our brands deliver. So I don't really see a whole lot of change, certainly in the near term in that environment, but certainly something that we'll keep our eyes on and if we do see anything that's worth commenting on then we'll come back and comment on that in future quarters, but nothing really that I can pull out right now David.

Understood, along the same vein with respect to your rewards program and I know there was some discussion about it in the release today. But do you see a change in how companies use or utilize their loyalty program and you know what implications might there be for that, do you think it's something that may cost you more over time as the use of loyalty programs continues to accelerate.

I think the loyalty programs are going to be more and more important going forward to us, our peers, other industries as everyone tries to get closer and closer into that customer and understand that customer better and have more personalized offers. Actually of course the cost of delivering the loyalty program that is part of our system fund diving through the P&L and actually as you get more and more personalized with what you're doing, with your customers, you get a better return on investment from what is being deployed and you become stickier with your customer, they want to bring more of their business into you. So those are all net benefits to my mind and certainly we see, I see Reward Club continuing to be the largest and highly preferred loyalty program in the industry.

Perfect. Last one if that's okay.

Go for it, David.

The two issues that you know continue to be raised by investors when we talk about the industry overall, are one the shared economy/airbnb dynamic and where you see that going and what its impact is and two cancellation policies and how the industries evolves those as the transparency of inventory online becomes greater and greater. If you could just comment on both of those that would be it from me, I promise.

Okay, thanks David. So I think we've spoken quite a lot about our perspective on shared economy/airbnb dynamic and relative rates of growth between our business, branded hotels and the shared economy and the branded hotel market still continues to grow more rapidly, we’ve seen that over an extended period of time and obviously it's much larger, it’s different, it's a different stay occasion, it's a different offering and certainly for business travelers is much more suitable accommodation provision. There's been quite a few notes written recently as to whether it has some impact on the high occupancy nights and I think that sort of broadly, people seem to be saying that it's very difficult to identify anything and I'll probably correlate with what we see, quite difficult to isolate particular impact on those compression nights, maybe in some individual markets and where there is particularly higher concentrations. But we are not seeing anything on a systematic basis that we could pull out. In terms of cancellation policy, actually we already have a range of different offers out there, best flexes on purchase rates, et cetera. Not the biggest issue for us that we are currently focused on. So not seeing a big impacts from it, but we certainly keep observing it and I think some of the things you could do to customers, we just need to be careful that they see that’s in their best interest rather them holding them back. So we will keep it under review.

Understood. Thanks very much.

I would now like to open Mr. Stephen Grambling of the Goldman Sachs's line. Sir, you can proceed with your question. Sir, you can proceed.

Just a follow up on the net benefits of the Rewards Club, is there an opportunity to further improve terms in the co-branded cards that you have, or is that term locked in?

What we launched a new contract on the co-branded cards earlier this year, and as we grow out the number of people who have the co-brand cards and there may be some benefit from that. But I wouldn’t be putting anything through the P&L in terms of that note. And I think it’s got a -- it's a very good relationship that we have there and I think that will continue to be successful. But having reinforced the loyalty program, but I wouldn’t expect to see that coming through and giving a direct financial benefits.

That’s helpful, and one other follow up on your comment of the length kind of you have had some of your franchisees, what is the average length of the tenure of your franchisees and how does that compare to those who have been removed from the system? Thanks.

Some of our franchisees have been with us 50-60 years, very long standing relationships through HolidayInn and the InterContinental brand. As you would expect [indiscernible] with the same hotels, but very long term relationships, we still have a relationship through the HolidayInn club vacations business with the founding family of HolidayInn, the Wilson family, so that goes back to the 50’s. In terms of the age of hotels, that’s a hard statistic to really evaluate. Because once you have a hotel and it’s fully refurbed when you take it from the date it was built, date it was refurbed, what we have done more recently is moved out the length of our contracts from a 10 year contract to a 20 contracts, which will take a while to cycles through our entire system. But we think that will beneficial overall in terms of removals, in terms of CapEx spending to those hotels. In terms of age of hotels when they leave, well the hotels we are taking out overtime do tends to be the age old hotels and the ones that remain, I mean that we have a very young system actually the HolidayInn system has a very young average age compared to that of other brands out in the industry given all the pruning that we’ve done through the HolidayInn relaunch and our continued very high focus on quality.

That’s very helpful. Thanks so much and best of luck.

Thanks Stephen.

At this time speakers, there are no questions in queue.

Okay, well thank you Anjay and thank you everybody very much for dialing in. And is there any follow up questions, please do get in touch with us. We will speak with you soon. Thanks very much, bye for now.