I just want to say a few words about Paul before I hand over to him. Paul joined IHG almost 10 years

Good morning everyone. Thank you for joining us today. Welcome to our 2013 Full Year Results Presentation. In a moment Paul Edgecliff-Johnson will take you through the financial results in detail but first let me cover some highlights. The 2013 (indiscernible) 10th anniversary as a standalone company and was another year of strong performance for the business. Growing preference for our brands combined with solid net rooms expansion squirt neighborhood cruising guide fueled increasingly from developing markets drove good growth in fees. Our focus on cost efficiencies combined with our success in leveraging our scale has allowed us to reinvest in the business whilst growing our margins, squirt neighborhood cruising guide an achievement we have repeated now for a number of years. We have once again demonstrated IHG’s ability to drive powerful cash flows and to deliver against our commitment to reduce the capital intensity of the business releasing some $444 million cash from disposals in the year. And I’m delighted today to announce the disposal of InterContinental Mark Hopkins, San Francisco for a $120 million. This follows our agreement to dispose of 80% of its InterContinental New York Barclay in December with both the deals highlighting the enduring appeal squirt neighborhood cruising guide of the InterContinental brand.
IHG’s to reliably recycle capital squirt neighborhood cruising guide provide this with the flexibility to invest behind squirt neighborhood cruising guide our brands and our technology platforms squirt neighborhood cruising guide at the same time as being able to generate significant and consistent shareholder returns. The $638 million of capital we returned in 2013 by a special dividend and share buyback together with the 9% growth in the 2013 total dividend announced today demonstrates both an ongoing commitment to our longstanding strategy and the confidence we have in our ability to drive strong performance into the future.
squirt neighborhood cruising guide I just want to say a few words about Paul before I hand over to him. Paul joined IHG almost 10 years ago and during that time he has held a number of senior squirt neighborhood cruising guide finance positions across the group most recently heading up finance for our Europe and our Asia, Middle-East and Africa regions. He has also allowed hotel development in Europe, Middle-East and Africa as well as taking on the role of Interim Chief Executive for that region during 2011.
So you can see Paul has a wealth of financial operational squirt neighborhood cruising guide experience and he and I have worked together closely throughout his time at IHG and I’m delighted to have him as our CFO. So I will now hand over to Paul who will talk in more detail about the financial progress IHG has achieved in 2013 and I will return later to discuss our strategy with a particular focus on the progress our brands have made during the year. Paul?
So thank you Richard and good morning everyone. It's been some years since I last stood up here. Good to see some familiar faces and I look forward to reconnecting with you in the coming squirt neighborhood cruising guide months. We’re pleased squirt neighborhood cruising guide to report another year of strong results in which we have delivered growth in all of our core financial metrics. Increases in both rooms under our brand and in revenue per available room or RevPAR drove a 4% increase in fee revenue.
Reported profit growth of 10% included three large liquidated squirt neighborhood cruising guide damages squirt neighborhood cruising guide receipt totaling $46 million in the year. Without the benefit of these and excluding results from managed lease hotels and the owned revenue from InterContinental Hotel London Park Lane which we sold in May. We grew underlying profit by 8% on a constant currency basis.
Interest squirt neighborhood cruising guide was $19 million higher as $73 million reflecting average debt that was little higher as we have executed on our capital returns program. Our effective tax rate increased by 2 percentage points to 29%. Our expectation remains but our tax rate will rise to the low 30s in 2014. After these higher tax and interest cost, an 8% reduction in weighted average shares earnings per share increased to $158.3 up 14% year-on-year.
We had another year of strong cash generation with free cash flow of $502 million up 11% on last year. I will go into more detail on this a little later on. Our focus remains on driving our three levers of growth to deliver long term sustainable performance. Royalty rate is the metric that is most stable as we operate long term contract almost all of which now have a minimum 20 year duration. So we don’t expect to see significant movement’s year-on-year.
We opened 35,000 new rooms in the year and removed 25,000. On an underlying basis adjusting for the 4000 rooms that exited in relation to the significant liquidated damages I mentioned earlier net rooms increased 2.3%.
4.3% fee growth across squirt neighborhood cruising guide the business added $49 million in absolute terms, taking total fees to nearly $1.2 billion, give some more context as to where and how we drove this. I will now talk you through the performance of each of our regions in a little more detail. $39 million of our fee growth was generated in the Americas, our largest squirt neighborhood cruising guide region. This is driven primarily by 4.3% of comparable RevPAR growth with average rate up 2.6% and a 110 basis point increase in average occupancy which now stands at 66.4%, 30 basis points above the 2007 prior peak.
We were pleased with the performance of each of our brands during the year and in particular with the 130 basis point RevPAR growth outperformance that our higher price point hotels of Crowne squirt neighborhood cruising guide Plaza and InterContinental both achieved against our industry competitors.
Focusing in for a moment on the mid-price squirt neighborhood cruising guide segment, squirt neighborhood cruising guide Holiday Inn and Holiday Inn Express maintained a sizeable rates premium to their competitors. They grew RevPAR slightly more slowly in 2013. This is unsurprising given that significantly superior RevPAR performance throughout the cycle proving to be much more robust during the downturn and recovering back to prior peak levels almost 12 months sooner squirt neighborhood cruising guide than the wider U.S. industry.
Back now to the region as a whole, we opened 20,000 high quality rooms and removed 18,000 from our system as part of our continued focus on quality and driving the long term performance of our brand. On an underlying basis revenue and profit were both up 7% in the Americas. This is driven by good growth at our franchise business and a strong performance from our own owned and leased hotels where 6% RevPAR squirt neighborhood cruising guide growth and strong drop through drove operating profit up 25%. In 2013 we signed squirt neighborhood cruising guide significantly more hotels in the Americas than in any year since 2008. This is a strong indicator of the success of our continued squirt neighborhood cruising guide focus on quality squirt neighborhood cruising guide and brand strength and sets us up well for the future.
Moving on now to Europe squirt neighborhood cruising guide which drove $4 million of our fee revenue growth. After a slow start with tough competitors in Germany, an increased squirt neighborhood cruising guide supply growth in the UK. Comparable RevPAR squirt neighborhood cruising guide grew 1.7% across the year. In the third quarter we achieved 5% growth although it's benefited from the timing of certain squirt neighborhood cruising guide exhibition and events in the quarter so it not fully represents to of underlying economic squirt neighborhood cruising guide conditions. We opened 3500 rooms during the year and also removed 3500 of our lowest quality rooms including 1300 rooms for which we received significant liquidated damages. Solid fee revenue progression reflected strong growth in franchise fees up 7%.
This in conjunction with a $3 million property tax recovery InterContinental Le Grand drove underlying profit up 10%. 2013 was a good year for signings in Europe with 50 hotels added taking the pipeline to 110 hotels or 18000 rooms. Seven signings squirt neighborhood cruising guide in London alone will expand the footprint of each of our six brands already operating in the capital. We also saw strength in Russia one of our key focus markets where we signed five hotels.
Moving now to look at our Asia, Middle-East and Africa region where we delivered a strong underlying performance we saw fee revenues fall by almost $4 million. Having previously squirt neighborhood cruising guide held the CFO role in this region I know just how diverse it can be with different dynamics driving each of our key markets, 6.1% comparable RevPAR growth was led by South-East Asia and Japan both up almost 10%. In the Middle-East more modest RevPAR growth reflected strong trading in the United Arab Emirates offset by continued geo-political unrest elsewhere in the region. We opened 4000 rooms and removed 2000 in the year with almost all of the net room’s growth squirt neighborhood cruising guide coming from developing market locations such as India, Indonesia and Thailand.
squirt neighborhood cruising guide Despite this strong growth squirt neighborhood cruising guide in our key business drivers underlying profit was down 8%. This reflects the combination of our continued investment to deliver long term growth in the region and a $10 million reduction in revenues from a small number of legacy contracts that have come up for renewal. Some of these have been renewed on current market terms as we indicated half year results squirt neighborhood cruising guide and some have been removed for quality reasons.
Excluding this $10 million impact fee revenue would have been up 4%. Asia, Middle-East and Africa will be a key market for our future squirt neighborhood cruising guide growth. We have 32,000 rooms in the pipeline with a strong mix of developing market locations. Around half of the pipeline is under construction today and over half of it is for our Holiday Inn brand family.
squirt neighborhood cruising guide Moving on now to greater China where we increased fee revenue by $3 million. Our ability to continue to grow RevPAR squirt neighborhood cruising guide in 2013 while the industry was experiencing significant declines effects our scale and the strength of our competitive position. We opened 8000 rooms in the year almost half of which were in the fourth quarter. This took year-end system size up 11%, our 8th consecutive year of double digit growth.
Now given we have achieved 1% RevPAR growth and 11% net system growth in 2013, a 3.3% increase in fee revenue does seem rather modest. However there are several factors contributing to this including our waiting of rooms opening to the fourth quarter, the macroeconomic conditions in the region and unveiling industry squirt neighborhood cruising guide wide reduction in spending squirt neighborhood cruising guide on conferences and meetings.
This resulted in 7% growth in fees from rooms being partly offset by a 1% decline in fees from food and beverage. We already have an established