INTERCONTINENTAL Hotels Group (IHG) has lifted first-quarter profit by more than a third, welcoming back the US business traveller and pointing to stronger bookings and higher room rates for the rest of the year.
The world’s biggest hotelier, which operates Holiday Inn, Crowne Plaza as well as InterContinental brands, said the United States posted its highest growth in five years while China was its strongest market with big rises in occupancy and rates. Hoteliers are reporting more guests as the economic recovery boosts business travel and offsets the impact of earthquakes in Asia and unrest in North Africa and the Middle East.
As occupancy levels rise, room rates are being pushed higher. Outgoing chief executive Andrew Cosslett, who will be replaced by finance chief Richard Solomons, was confident about the outlook for the rest of the year and said the group was seeing rising room rates around the world, including the United States which accounts for two thirds of company profit.
The hotelier, which runs around 4,500 hotels, posted operating profits up 35 per cent at $112m (£68.5m) for the first three months of 2011, beating a company consensus of $106m. Quarterly sales rose nine per cent to $396m. InterContinental shares rose 3.9 per cent to 1,298p driven by a good performance across the group and in particular by its largely franchised US business.
“It looks like outgoing chief executive Andy Cosslett has timed his exit to perfection with a top-of-the range quarter one to mark his swansong,” said Nigel Parson at Evolution Securities.