InterContinental warns trading still challenging

By Matt Scuffham

LONDON (Reuters) - InterContinental Hotels (IHG.L), the world's biggest hotelier, said it was too early to forecast a recovery as trading conditions remained challenging after posting a 19 percent fall in third-quarter operating profit.

The group, whose brands include InterContinental, Crowne Plaza and Holiday Inn, said on Tuesday that adjusted operating profit fell to $124 million (74 million pounds) from $153 million a year ago.

InterContinental, which manages or franchises hotels instead of owning them and earns 70 percent of its profit in the United States, has seen profits impacted as businesses hit by the global financial crisis cut back on travel expenditures.

Chief Executive Andrew Cosslett said the environment remained difficult with room rates falling as a result of a greater dependence on leisure travellers.

"We see signs of occupancy stabilising but rate is still under considerable pressure across the board," he said.

InterContinental, which runs more than 641,000 rooms in 4,390 hotels worldwide, 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, reflecting a weaker comparative period in the previous year.

Chief Financial Officer Richard Solomons said it was too early to call the bottom of the hotel market as the group gave a more downbeat assessment of prospects than that delivered by some of its competitors in recent weeks.