IHG eyes higher profit

HOTEL group InterContinental Hotels (IHG) is expected to reveal a surge in profits tomorrow thanks to the return of the business traveller.

Analysts expect the group, which owns the Holiday Inn chain, to unveil first half operating profits of $205m (£128m), a rise of 14.5 per cent.

The sharp rise in profits is down to a recovery in the business travel market and strong growth in China, analysts believe, but it is likely the group will warn its recovery could be put at risk by a lack of bank funding.

There are suggestions the company is having difficulty getting the development funding required to overhaul its Holiday Inn brand, which is earmarked for a $1bn (£627m) re-launch.

InterContinental said plans to upgrade the 3,400-strong hotel chain were on track and would begin later this year, despite a dearth of bank funding.

Last week many of Britain’s banks posted billions of pounds in profit, but there are claims that access to credit for small and medium-sized companies is still very difficult.

Recently the Barclay brothers, owners of the Telegraph Media Group and the Ritz hotel, sold their 10 per cent stake in InterContinental Hotels for over £335m, sending the firm’s share price down 89p to £11.10. It has since put on 8p to close on Friday at £11.18.