August 9, 2011 / 6:31 AM / 8 years ago

UPDATE 4-InterContinental watchful as markets crumble

* H1 operating profit $269 mln vs consensus $256 mln

* Keeping watchful eye on world economic events

* Sees no impact yet from market falls

* Sees pickup in U.S., strong growth in China

* H1 global RevPAR up 6.7 pct, rises 8.2 pct in U.S.

* Shares up 4.8 percent (Adds CEO comments from briefing, updates shares)

By David Jones

LONDON, Aug 9 (Reuters) - World No.1 hotelier InterContinental Hotels is keeping a close watch on the effects of global economic turmoil but is yet to see an impact after strong growth in China and more business travellers helped it beat first-half forecasts.

Chief Executive Richard Solomons said it was much too soon to see an effect on the hotel group from the sharp fall in global stock markets amid worries about U.S. and euro zone debt and growth, and said the hotels market often recovered quickly from these setbacks.

He added that world governments needed to a get a grip on these problems, but they were not putting off his customers and he said mid-market hotels, like its own Holiday Inn chain, were pretty resilient to these types of setbacks.

“We are not being complacent but in the last big downturn post-Lehman in 2008 we held up pretty well and were one of the few hoteliers to maintain dividends and still pay down debt,” Solomons told a briefing after half-year results on Tuesday.

He added that there had been no effect on forward bookings with corporate and leisure business holding up, but added uncertainty did not help any business and called on world governments to show more leadership in the crisis.

The British group, home to the Crowne Plaza as well as Holiday Inn and InterContinental brands, did show a dip in trading during July. Solomons said this was in comparison to a bumper July last year, and the group had just booked a record number of rooms last month in its key U.S. market, where it earns around two-thirds of its profits.

InterContinental shares had a volatile day, reflecting turbulent world stock markets. They rose sharply, fell just as quickly, and then recovered to climb 4.8 percent to 10.09 pounds by 1335 GMT to be a top FTSE 100 index gainer.

“Based on the H1 beat we would have expected consensus forecasts to rise 4-6 percent but given the extraordinary environment we suspect that few will want to upgrade at this time,” said analyst James Ainley at brokers Citi.

The hotelier, which runs over 4,400 hotels, posted first-half operating profits up 23 percent at $269 million beating a company compiled consensus of $256 million, while half-year sales rose 10 percent to $850 million.

The half-year dividend rose 25 percent to 16.0 US cents.

The group said first-half global revenue per available room (RevPAR), a key industry measure, grew 6.7 percent, with an 8.2 percent rise in the United States and a 12.7 percent rise in China. In July, global RevPAR rose a slightly less 5.6 percent.

Most hoteliers reporting results recently have been generally upbeat like the business travel-focused Starwood and French Accor . Marriott was more cautious due to weakness in the conference market.

“With a yield of over 5 percent, a strong balance sheet and a sound business model, InterContinental would look very attractive to our eyes once we reach calmer water,” said analyst Jason Streets at brokers RBS.

Former finance director Solomons stepped up to replace Chief Executive Cosslett who retired for the group at the end of June, and Solomons will be replaced by finance director of healthcare group BUPA Tom Singer in late September. (Reporting by David Jones; Editing by Sophie Walker)

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