Hotel group to return $1bn to shareholders

Kasmira Jefford
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INTERCONTINENTAL Hotels, the world’s biggest hotelier, yesterday promised to return $1bn (£640bn) to investors after profits jumped by six per cent in the first half of the year.

Shares rose more than seven per cent after the owner of the Holiday Inn and Crowne Plaza brands announced a special dividend in the fourth quarter, at a cost of $500m, along with a $500m share buyback in the same three months.

It plans to use proceeds from the looming disposal of its New York Barclay hotel, which analysts expect to fetch around $300m, to fund the capital return. The group said sale talks are ongoing.

InterContinental also revealed plans to put its flagship London Park Lane hotel on the market in the second half of next year, as it pursues its strategy of selling assets in return for management contracts.

The news came as the company reported a six per cent rise in operating profit to $286m, slightly ahead of analyst forecasts.

Growth in global revenue per available room rose 6.5 per cent, fuelled by strong growth in the Americas and Greater China.

InterContinental came under fire last week, after the Office of Fair Trading accused the hotelier of colluding with two major online travel agents to restrict discounts on rooms.

Tom Singer, chief financial officer, said the OFT has “misunderstood” how business is conducted online.

“We have extremely strong advice confirming our view that we haven’t broken any UK competition laws,” he said.