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US markets lead increase in IHG revenue

US markets lead increase in IHG revenue

InterContinental Hotels Group saw revenue rise by five per cent last year to $21.2 billion.

However, the largest hotel operator in the world said it would push ahead with the sale of flagship properties in London and New York as market conditions remained challenging.

Capacity at IHG increased by 676,000 rooms or 2.7 per cent on 2011.

This came through 226 new hotels openings, the signing of 365 hotels and a pipeline of 1,053 hotels.

Global revenue per available room rose by 5.2 per cent with the US leading the growth.

IHG chief executive Richard Solomans said: “This growing scale allowed us to reinvest in the business while achieving better than anticipated margin progression.

“The financing environment remained tough through 2012 in many of our key markets, but we still signed on average one hotel a day into our pipeline. 

“This reflects the excellent relationship we enjoy with our owners and further strengthens our foundation for high quality growth.

“We extended our portfolio of preferred brands, launching in the first quarter of 2012 the innovative HUALUXE Hotels & Resorts and EVEN Hotels.”

However, IHG said it would push ahead with the sale of its flagship New York Barclay and InterContinental Park Lane hotels.

The company first flagged the sale of the 87-year old New York Barclay hotel in 2009, but the sale was put on hold in 2011 as market conditions deteriorated.

But as demand from business travellers returns apace, and demand increases for flagship real estate assets, fuelled by sovereign wealth funds and wealthy overseas investors looking for strong returns and trophy assets, the “optimum market conditions” that IHG was waiting for have started to arrive.

The New York Barclay is expected to fetch around $350 million while the InterContinental Park Lane is valued at around $387 million.