Business | Tourism
InterContinental profit rises 29%
The world's No 1 hotelier InterContinental Hotels Plc met forecasts with a 29 per cent rise in first-half profits, and warned that growth had slowed in the second-quarter, particularly in the United States.
- Reuters
- Published: 23:59 August 12, 2008
London: The world's No 1 hotelier InterContinental Hotels Plc met forecasts with a 29 per cent rise in first-half profits, and warned that growth had slowed in the second-quarter, particularly in the United States.
The British group, which operates InterContinental, Crowne Plaza and Holiday Inn hotels, posted first-half operating profits from continuing operations of $284 million yesterday, in line with an analysts range of $281-290 million and a mean forecast of $285 million.
The hotelier, which earns nearly 70 per cent of its profit in the United States, said revenue per available room (RevPAR), a key industry measure, grew by 4 per cent in the first-half, and then slowed to 3.4 per cent in July and just 1.5 per cent in the United States.
"Generally RevPAR growth slowed through the second quarter, and market conditions have become more challenging, particularly in the US," said Chief Executive Andrew Cosslett in a results statement.
Last month, US-based hoteliers warned of soft US demand in 2008 and into 2009 with Marriott International and Sheraton-owned Starwood seeing a slowing US economy leading to US weakness in the second-quarter.
Slow expansion
InterContinental's broker Merrill Lynch said the group's US RevPar could turn negative in August, while growth will slow in Europe and Asia into 2009.
"Its corporate restructuring is largely complete and it has significant exposure to the US market, where we do not see an improvement in news flow for some time," said Merrill Lynch analyst Ian Rennardson.
InterContinental, which operates just over 4,000 hotels around the world, said it had exceeded its three-year rooms growth target six months ahead of schedule with 60,490 rooms added since June 2005. Its target was to open 50,000 to 60,000 net new rooms by the end of 2008.
The company added 13,071 net new rooms in the first-half taking its total rooms to 598,165 and signed up a further 48,282 rooms taking its pipeline to 242,249 rooms or some 1,788 hotels.
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