IHG beats its forecasts as revenues rise

INTERCONTINENTAL Hotels Group yesterday gave an upbeat half-yearly update as online booking and the return of the business traveller helped improve earnings.

The world’s biggest hotelier beat half-year earnings forecasts with a 23 per cent rise in profit.

The group, which owns the Holiday Inn, Crowne Plaza and InterContinental brands, also saw stronger bookings and room rates in the US, which accounts for around two-thirds of group profit, while it reported strong growth in China.

IHG chief executive Richard Solomons, who took over from former boss Andrew Cosslett in July, said that in the full year £100m of sales on Apps would have been made.

“People are booking on Apps at the last minute and this is helping our business. We are trading well in difficult times,” the firm said.

First half operating profit hit $269m (£164m) compared to a company-compiled consensus of $256m, while half-year sales rose 10 per cent to $850m.

The half-year dividend rose 25 per cent to 16 cents. The group said first-half global revenue per available room (RevPAR), a key industry measure, grew 6.7 per cent, with an 8.2 per cent rise in the United States, while global RevPAR rose 5.6 per cent in July.

The company, which has recently completed an overhaul of its Holiday Inn brand, said it was now targeting changes at its Crown Plaza branches.

Up to 40 will close, and company chiefs are now hammering out details of how to breathe new life into the rest of the hotels. IHG, which is pinning its growth hopes predominantly in India and China, said that events in the Middle East, Japan and New Zealand hit profits by $7m.

On the crisis in global markets, Solomons said: “People need certainty and governments need to act to provide that.”