Analysis on the Cost Structure of Intercontinental Hotel Group

ANALYSIS ON THE COST
STRUCTURE OF
INTERCONTINENTAL HOTEL
GROUP

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
OBJECTIVES .................................................................................................................................3
FINANCIAL STRUCTURE OF IHG ............................................................................................3
IMPORTANCE OF THE EFFECTIVE MANAGEMENT OF COSTS AND REVENUE ...........4
COSTS INCURRED BY IHG ........................................................................................................4
REVENUE STREAMS OF IHG ....................................................................................................5
INTERNAL AND EXTERNAL FACTORS BEARING ON COSTS AND PERFORMANCE
OF IHG ...........................................................................................................................................6
PESTEL ......................................................................................................................................6
SWOT ANALYSIS ....................................................................................................................6
ANALYSIS OF THE COMPETITIVE ADVANTAGE OF IHG...................................................7
RECOMMENDATIONS ................................................................................................................7
CONCLUSIONS .............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Intercontinental Hotel Group PLC (IHG) is one of the prominent hotel business with about
400,000 associates operating in over 100 countries to deliver effective hospitality to its clients.
IHG runs owned, franchised hotels and on behalf of third parties with mainstream hotels such as
Hotel Inn, Holiday Inn Express and Staybridge Suites among others, upscale hotel such as
Hualuxe hotel and resort, Crowne Plaza Hotels and resort, Even Hotels, Hotel Indigo, Luxury
brands a such as Six Sense, Intercontinental hotel and resorts, Regent Hotels and Resorts and
Kimpton hotels and restaurants among others. (IHG, 2019)
OBJECTIVES
This report will analyse and on the cost structure of INTERCONTINENTAL HOTEL GROUP
evaluating the various costs it incurs and appraise s in its business. It will also evaluate and
analyse the internal and external factors that have a bearing on the cost and performance of its
company, and this will include the PESTEL factors affecting its current business climate, the
SWOT analysis of the company and the analysis of competitive advantage with some
recommendations on how management could improve business and profits.
FINANCIAL STRUCTURE OF IHG
Financial structures indicate the balance together with all liabilities of the company and its
assets, (Hernandez-Perz, et al., 2019). For the six months ended June 30, 2018, US $ 286 million
in cash was provided for operating activities. Net cash outflows on investing activities totalled
US $ 102 million and net cash outflows on financing activities the value of US $ 69 million. Net
debt as of June 30, 2018 was $ 1,802 million and amount of $ 233 million in respect of
InterContinental Boston's finance lease obligations. The Group had a net liability of US $ 1,162
million as of June 2018 (restated to US $ 1,301 million as of December 31, 2017), considering
that its internally caused trademarks are not recorded in the balance sheet under Brazilian GAAP.
(Funds library, 2019)