IHG to report 40% profit slump

IHG to report 40% profit slump

InterContinental Hotels Group is expected to announce a 40 percent fall in first-half profits tomorrow. Despite the fall, the world’s largest hotel group is also expected to maintain its dividend, announce an increase in cost savings, as well as confirm that it remains on track with the $1 billion relaunch of Holiday Inn.

The group is expected to report a fall in operating profit from $291 million to about $168 million for the first six months of the year, with global Revpar showing a decline of 18 to 20 per cent.

IHG, which owns about 4,200 hotels with more than 620,000 rooms is also expected to reiterate a slowdown in its pipeline of new properties due to a tougher lending market. Openings are expected to slow down to about 300 this year, according to The Times.

Its cost-saving programme is also reportedly going better than planned. In May, it raised its forecast for regional and central cost savings from $30 to $70 million, but that figure is now thought likely to be between $80-90 million, due to a restructuring of its Asian operations.

In the UK, where it owns about 240 managed and franchised properties, the fall in Revpar is likely to be half that level, helped by strong trading from InterContinental London Park Lane, which it owns and manages. The luxury hotel has benefited from the closure for refurbishment of the neighbouring Four Seasons Hotel and The Savoy.


ject width="560" height="340">