February 14, 2012 / 8:02 AM / 8 years ago

InterContinental looks to China to drive growth

LONDON (Reuters) - World No 1 hotelier InterContinental Hotels (IHG.L) is looking to emerging markets and especially China to drive future growth after a recovery in the United States and a string of new Chinese hotel openings helped push up 2011 profits 26 percent.

The hotelier, home to Crowne Plaza and Holiday Inn as well as the InterContinental brand, said business was improving in the U.S, led by a healthier economy and job creation in a region

which makes around two-thirds of the group’s profit.

Greater China, which was reporting numbers as a separate region for the first time, saw the group’s highest growth rate as it opened over 8,000 new rooms in the year to stay as the number one international hotel chain in the country.

“Looking ahead, in spite of considerable uncertainty in the euro zone, IHG is well positioned globally to benefit from positive long term industry trends and in particular, growing demand in emerging markets,” said Chief Executive Richard Solomons in a 2011 results statement.

Growth in global revenue per available room (RevPAR), a key hotel industry measure, grew at 6.2 percent in 2011 with the U.S. and China ahead 7.9 percent and 10.7 percent. While there was a fourth-quarter slowdown worldwide to 4.6 percent, the January growth rate recovered to 6.0 percent.

The British group, which operates more than 660,000 rooms in over 4,500 hotels worldwide posted a 26 percent rise in 2011 operating profits to $559 million beating a $543 million Thomson Reuters consensus estimate.

The group 2011 dividend rose 15 percent to 55 US cents.

InterContinental, like other hoteliers in 2011 suffered from

unrest in the Middle East and North Africa, the tsunami in Japan and the euro zone crisis, but recovery and growth elsewhere has help offset these negative factors, analysts said.

Europe showed a small fall of 0.2 percent in RevPAR in the fourth quarter due to a deterioration of economic conditions across the continent, but analysts pointed out the region only accounts for 15 percent of group profit.

Earlier this month, Sheraton-owner Starwood HOT.N posted higher-than-expected fourth quarter earnings but a flat Europe worried investors and its shares dipped, while Marriott MAR.N reports its fourth quarter on February 15 L2E8D1BCH.

Shares in InterContinental have reflected recovery hopes rising 50 percent since a low of 939 pence in August 2011 to outperform the FTSE 100 .FTSE index by over 21 percent and they closes on Monday at 1,402 pence, valuing the group at just over 4 billion pounds.

Reporting by David Jones; Editing by Sophie Walker

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below