Intercontinental Hotels grows revenue and profit on strong London and Paris performance

 
Alys Key
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Intercontinental expanded its London portfolio with a new Indigo hotel in Leicester Square (Source: IHG)

London tourism boosted Holiday Inn owner InterContinental Hotels Group (IHG), providing a bright spot in otherwise slow-moving results.

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The figures

Total revenue was up two per cent to $857m (£657.8m), growing slower than market observers had expected.

Underlying profit was up seven per cent to $365m (£280.1m).

Net debt increased to more than $2bn.

Shares in the London-listed company were trading down three per cent this morning due to a combination of profit-taking and wary investors balking at the slower-than-expected revenue growth.

Why it's interesting

Globally, revenue per available room (RevPAR) grew 2.1 per cent but in London this increased to nine per cent.

This follows similar results from other hotel groups like Millennium & Copthorne, which saw a 10 per cent rise in RevPAR in its London hotels.

The weaker pound has been drawing record numbers of visitors to the capital, giving the UK travel and tourism industry a boost.

IHG is continuing to invest in the city, opening one of its boutique Indigo hotel range in a prime location at Leicester Square.

Trading was also strong in Paris, where hoteliers felt a much heavier impact after terror attacks than their London counterparts have this year. RevPAR continued to recover, growing 11.6 per cent.

But outside of Europe, low oil prices meant RevPAR in the Middle East declined 3.7 per cent

Read more: Middle Eastern tourists are buying British luxury in pre-Ramadan rush

What the company said

Incoming chief executive Keith Barr outlined some of his strategy for the future.

"My focus is on driving an acceleration in our growth rate, by increasing the resources dedicated behind the highest opportunity markets and segments, strengthening our brand portfolio, building on our leading loyalty proposition, and enhancing our competitive advantage through prioritising digital and technological innovation."

Read more: InterContinental Hotels chief exec steps down as revenues rise

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