InterContinental books profit rise

City A.M. Reporter
InterContinental Hotels, the world's biggest hotelier, has reported a 28 per cent rise in first-quarter profit driven by a recovery in business travel and fast-growing economies like China.

The British group, which operates Holiday Inn, Crowne Plaza as well as InterContinental hotel brands, was expected to give an upbeat message to help offset a profit hit from the effect of earthquakes in Japan and New Zealand and political unrest in the Arab world.

Analysts said the hotelier, which runs 650,000 rooms in 4,500 hotels covering 100 countries, was likely to reflect confidence from US rivals such as Marriott and Sheraton group Starwood Hotels & Resorts.

These groups have reported more guests as the economic recovery starts to boost business travel, with Sheraton reporting growing business confidence while Marriott was optimistic about the future despite missing first-quarter forecasts.

"We believe that the outlook for the hotel industry is positive. Supply growth is low, demand is picking up, and occupancy is approaching the tipping point at which hotel companies find pricing power being restored," Numis Securities analyst Wye Ellis said.

InterContinental, which still makes about two thirds of its profit in the United States, is expanding in emerging markets to tap into fast-growing economies and has around 35 percent of its pipeline for new rooms set to open in the Asia Pacific region.

The hotelier's post first-quarter operating profit was £65m. Analysts expected revenue per available room (RevPAR), a key industry measure, to rise around six per cent.