May 6, 2016 / 6:40 AM / 3 years ago

InterContinental Hotels first-quarter global room revenue lags estimates

(Reuters) - InterContinental Hotels Group Plc (IHG.L) on Friday posted a 1.5 percent rise in first-quarter global room revenue, missing analysts’ estimates but said it was confident for the rest of the year, citing current trading trends and brand momentum.

General view of the Intercontinental hotel in Marseille, France, March 7, 2016. REUTERS/Jean-Paul Pelissier

Shares in IHG fell as much as 2.5 percent in early trading, making the stock one of the top losers on Britain's FTSE 100 index .FTSE.

“I think RevPAR was a bit below our expectations of about 2 percent and we expect shares to be a touch weaker,” Berenberg analyst Stuart Gordon told Reuters.

IHG, which runs over 5,000 hotels under brands such as Crowne Plaza, Holiday Inn and InterContinental, said weak oil markets and the earlier timing of Easter, affected several of its markets.

However, it added that despite both economic and political uncertainty in some markets, current trends and “the momentum behind our brands give us confidence for the rest of the year”.

The hotelier has a high concentration of rooms in oil producing markets, where RevPAR - revenue per available room (RevPAR), a key industry measure - was down 10.4 percent compared to a 1.9 percent rise in the Americas.

Growth in Europe was driven by higher revenue in Germany and Russia, two of its priority markets, while RevPAR in France was down 2.3 percent, hurt by declines in Paris.

Its Asia, Middle East and Africa region posted a 1.1 percent drop in RevPAR, while in Greater China it grew 2.2 percent.

IHG added that, as announced in February, it would return $1.5 billion to shareholders through a special dividend on May 23.

Shares in IHG recovered after their initial fall and were trading down 0.52 percent to 2,682 pence at 0734 GMT on the London Stock Exchange.

Reporting by Aastha Agnihotri in Bengaluru; Editing by Sunil Nair

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