InterContinental Hotels Group has unveiled disappointing third- quarter results as profit dropped 25 percent following a decline in demand due to the recession.
The British group, which operates the InterContinental, Crowne Plaza and Holiday Inn brands, made an adjusted operating profit of $124 million in the third quarter compared with $153 million the year before.
Commenting on the results, Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC said:
“The trading environment remains challenging. We see signs of occupancy stabilising, but rate is still under considerable pressure across the board.
“Our signings pace remains impacted by the continued scarcity of financing for hotel developments. We are taking action to improve our operating efficiency and support the performance of our hotels; the relaunch of Holiday Inn is gaining pace and continues to make a significant difference to the prospects of our biggest brand.
“The partnership we enjoy with our owners has been a key factor in our system’s resilience through this downturn and underpins our optimism for the future. This unique relationship combined with our global scale, diverse brand portfolio, fee based business model and powerful system positions us to lead the industry when the upturn comes.”
InterContinental, which runs over 641,000 rooms in 4,390 hotels worldwide is cutting expenses to make up for a drop in business and leisure bookings in the economic slowdown.
The group said revenue per available room (RevPAR), a key industry measure, fell by 15.2 percent in the third quarter. In October, the rate of decline had slowed to 13.5 percent.