Recovery begins at InterContinental Hotels

Recovery begins at InterContinental Hotels

InterContinental Hotels revealed a sharp increase in profits today, with Asia Pacific leading the group out of recession.

The world’s largest hotelier – which operates the InterContinental, Crowne Plaza and Holiday Inn brands - saw year-on-year profits jump 15 per cent over the first quarter of financial 2010, with its outlook also turning positive.

In total the hotelier posted operating profits of $83 million for the first three months of 2010, beating a $79.2 million consensus from a Reuters survey of six analysts, while quarterly revenue rose three per cent to $362 million.

For the first time in 18 months InterContinental saw global RevPAR increase; up 0.2 per cent over the period, including growth of 4.1 per cent in March.

IHG shares following the announcement

Asia Pacific led the growth, reporting RevPAR growth of ten per cent over the quarter, including a 22.2 per cent increase in Greater China.

“Business travel is returning although at this stage mainly to the luxury end of the market which was most affected by the recession,” explained Andrew Cosslett, chief executive of InterContinental Hotels Group.

“We expect the more resilient mid-scale sector to benefit from this trend as the year progresses and market norms are reset.

“We are encouraged by the return to growth but rates remain under pressure in many markets, booking windows are short and visibility is limited.”

Net debt at InterContinental stood at $1.1 billion, down $0.2 billion from the March 31st 2009 position but and held flat on the position as of December 31st 2009.

The London-based group added 5,151 net rooms over 38 hotels during the quarter, increasing total system size to 651,830 rooms in 4,476 hotels.

Over 50 deals were also signed, taking the InterContinental pipeline to 200,895 rooms in 1,344 hotels.

“The financing environment remains difficult but we signed 55 deals in the quarter and are on track to open around 300 hotels this year,” continued Mr Cosslett.

“The Holiday Inn re-launch continues to go very well.

“Over two-thirds of the hotels are now operating to the new standards and last week we launched the largest advertising campaign in the history of the brand. Performance in re-launched hotels continues to meet or beat expectations.