May 9, 2012 / 6:28 AM / 7 years ago

InterContinental Hotels looks for Olympics boost

LONDON (Reuters) - InterContinental (IHG.L), the world’s biggest hotelier, is looking for a further boost from London’s Olympic Games this summer, it said on Wednesday, after reporting a 5 percent rise in first-quarter profits thanks to strong growth in China and the United States, its two biggest markets.

A view shows the Intercontinental Hotel in Rio de Janeiro August 21, 2010, after a group of suspected drug dealers took people hostage in the hotel. REUTERS/Bruno Domingos

The British-based group, home to the Crowne Plaza, Holiday Inn and InterContinental brands, said with 79 days to the start of the Olympics it hoped to gain from assisting in running the 15,000-strong athletes village and lodging the games’ visitors its London hotels.

Chief Executive Richard Solomons said that its Olympic involvement, including its Holiday Inn sponsorship, would help the group’s hotels continue the growth they had seen during the early part of the year

“Broadly the momentum of the business is continuing, and we are very comfortable with the year so far,” he told a briefing.

He added that talks on the long-awaited sale of its flagship InterContinental New York Barclay hotel were still progressing with one exclusive buyer, which analysts said was likely to be the Qatari hotel owner Ghanim Bin Saad Al Saad.

The sale of the Manhattan hotel for around an expected $300 million (185 million pounds) in return for a management contract has been going on for over a year, and is expected to lead to a share buyback.

Despite economic problems in Europe, Solomons said its business there had performed well with a strong reliance on its key markets of Britain, France and Germany.

The hotelier, which operates more than 660,000 rooms in over 4,500 hotels worldwide, posted a first-quarter operating profit of $118 million, which compared with an average forecast of $116 million given by analysts in a Reuters poll. Revenue rose 3 percent to $409 million.

Growth in global revenue per available room (RevPAR), a key industry measure, grew 7.0 percent with the United States and China ahead 7.6 percent and 11.9 percent, respectively. In April, global growth slowly to 6.1 percent.

Solomons pointed out that April was not a big month for hoteliers and the comparable performance was skewed this year by the early timing of the Easter holidays.

Business in the United States, which accounts for around 60 percent of group profits, was helped by a slowly recovering economy, while the group also has its biggest pipeline of new hotels in China where it is already the largest international operator, analysts said.

The group's share price was flat at 1,465 pence by 0755 GMT after they had risen nearly 60 percent from a low of 939 pence in August 2011, and outperformed the FTSE 100 .FTSE index by around 35 percent during that time.

Big U.S. hotel chains such as Marriott MAR.N and Sheraton-owner Starwood HOT.N have reflected the growing industry optimism in recent results, helped by stronger domestic business travel, while French group Accor (ACCP.PA) has said it expects its recovery to continue.

Editing by Dan Lalor and Greg Mahlich

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