InterContinental Hotels, the world’s biggest hotelier, showed confidence in economic recovery by lifting its final dividend for the first time in three years and set a target for opening more hotels.
The British group, home to the InterContinental, Crowne Plaza and Holiday Inn brands, met forecasts with a 22 per cent rise in 2010 profit, driven by demand from Asia, business travellers and a revamp of its Holiday Inn chain.
“Across the business and across the world we are seeing some solid growth,” finance director Richard Solomons said, adding an economic recovery that had started in Asia was now looking “very broad based”.
InterContinental, with over 4,500 hotels in more than 100 countries, said it would grow its estate by 3-5 per cent a year from 2012, revamp its Crowne Plaza chain and also sell its flagship InterContinental New York Barclay hotel.
Its upbeat tone chimed with recent comment from rivals, including US groups Marriott on Monday and Starwood earlier this month.
Meanwhile, InterContinental said yesterday that it will launch a new upper mid-scale hotel brand in China by the end of the year, as part of plans to more than double the size of its operations in emerging markets.
The group estimates that China will overtake the United States as the world's biggest hotel market by 2025.
THE RETURN of the business traveller – as played by George Clooney (right) in Up in the Air – helped InterContinental Hotels boost annual profits, chief executive Andy Cosslett told City A.M. yesterday. Its upscale brands, which are popular with corporate clients, staged the biggest recovery, with revenues at InterContinental and Crowne Plaza up 10.5 per cent and 16.7 per cent respectively.
Cosslett says demand from financial services firms has staged a remarkable recovery, which is good news for IHG because they often spend more on rooms and services.
“Financial services went to ground for obvious reasons during the recession, but it’s all come back. These clients like top hotels, and they like luxury suites,” says Cosslett.
Revenues at IHG’s Groups & Meetings arm – which hosts conferences and events – are around 17 per cent higher than they were last year. And 27 per cent of bookings were made through its globally negotiated account, which deals directly with big corporates.
“Everyone is obsessed with government austerity, but the truth is the corporate world dealt with this much earlier. Everyone was taking out costs in 2008-2009. Now firms are doing what they’re supposed to – meeting people and growing their top line,” says Cosslett.
By David Crow
City A.M. Reporter