LONDON (Reuters) - InterContinental Hotels (IHG.L), the world’s largest hotelier, said a marked fourth-quarter slowdown had continued into 2009 and demand was still easing, as it met forecasts with a 13 percent rise in 2008 profit.
The operator of InterContinental, Crowne Plaza and Holiday Inn hotel brands, said underlying revenue per available room (RevPAR), a key industry measure, fell 6.5 percent in the fourth quarter of 2008 and slid 12.2 percent in January, led by cutbacks in business travel and a steep decline in demand in the Asia Pacific region.
“Our (bookings) visibility is limited and we’re not seeing any improvement at all in it. It’s going to be a difficult year for the industry,” Chief Executive Andrew Cosslett told reporters on a conference call.
“We’d expect the RevPAR decline to level out at some point through the year but we just don’t know when as the corporate side is still under pressure.
The company met 2008 forecasts as continuing operating profit rose 13 percent to $535 million (374 million pounds) on continuing revenue 5 percent higher at $1.85 billion, as global RevPAR grew 0.9 percent.
“InterContinental is outperforming, but it is in a cyclical industry and still heading down,” said Evolution analyst Nigel Parson.
Shares in the group, which have lost 15 percent of their value so far this year, were 1.5 percent up at 484.25 pence by 9:50 a.m., valuing the group at around $2 billion.
Cosslett said the timing of the $1 billion relaunch of the Holiday Inn brand was “perfect” as it looks to pick up more custom in the growing mid-market.
The company, which operates over 4,100 worldwide hotels with more than 600,000 rooms, expects 600 Holiday Inn conversions to be completed by the end of the first-quarter.
“We see a big opportunity in the mid-scale area and the timing of the Holiday Inn relaunch is perfect because lots of people are coming down from the luxury to the mid-scale end of the market,” said Cosslett.
Rivals Marriott International MAR.N and Wyndham Worldwide WYN.N both posted fourth-quarter losses last week, hurt by cutbacks in business travel.
The company, which refinanced $2.1 billion of long-term debt facilities in May, said it hoped to keep 2009 costs $30 million below 2008 levels as part of a cost-cutting drive.
The hotelier maintained its final dividend at 29.2 cents and said it had added 82,000 rooms to its portfolio by the end of 2008, beating a three-year growth target to add 60,000 rooms by the year-end.
Editing by Dan Lalor and Simon Jessop