IHG unveils rise in profits led by US growth

Kasmira Jefford
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INTERCONTINENTAL Hotels Group reported an 11 per cent jump in full-year operating profits yesterday, driven by a strong performance in the US and its expansion in developing markets.

The owner of the Crowne Plaza, Holiday Inns and InterContinental brands made an operating profit of $614m (£387m) in 2012, while revenue rose five per cent to $1.84bn.

Pre-tax profit rose five per cent to $556m from $532m a year earlier.

Global revenue per available room (revpar), a key hotel industry measure, grew 5.2 per cent in 2012, with its US market up 6.3 per cent and China 5.4 per cent ahead.

Tom Singer, IHG’s chief financial officer, said revpar in Greater China fell 0.3 per cent in the fourth quarter due to the China-Japan territorial island dispute and the political leadership changes. He expects sales growth to recover once the new leadership take official charge in March.

The FTSE 100 group, which runs more than 670,000 rooms in over 4,500 hotels worldwide, said it was on track for a further good performance in 2013 with global revpar in January up 6.6 per cent.

IHG recently put its London Park Lane hotel up for sale and is also looking for a buyer for its New York Barclay Hotel after talks with a potential buyer collapsed last year. Analysts expect the pair to fetch over $700m.

The sale of the Barclay hotel has proved complicated because of the significant costs a buyer would need to invest to revamp the site. Singer said the market for trophy real estate has “firmed up” in the past year and it expects to complete a sale this year.