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Intercontinental Hotels sees profits plummet in slump

THE world&rsquo;s biggest hotel group by number of rooms, Intercontinental Hotels (IHG), yesterday reported a 56 per cent dive in pre-tax profits as the economic downturn continues to squeeze the leisure sector.<br /><br />The group said pre-tax profits for the six months to 30 June fell from $236m (&pound;143m) to $151m, as revenues fell by a quarter to $726m from $974m the year before.<br /><br />Chief executive Andrew Cosslet said: &ldquo;We can&rsquo;t see any sign of recovery and it could be two years before we get back to levels of travel we were at before.&rdquo;<br /><br />Cosslet said future booking data showed no further deterioration in demand, with July benefiting from stronger interest from holidaymakers.<br /><br />But while occupancy levels are stabilising, hotel room rates are still very much under pressure, Cosslett said.<br /><br />IHG which owns Holiday Inn, Crowne Plaza and Indigo, said revenue per available room (Revpar) fell 16 per cent, with second quarter Revpar down 18.6 per cent, although the falls were less than expected.<br /><br />&ldquo;This is one of the toughest years on record with little respite and it will continue to be challenging this year and into next,&rdquo; Cosslett said.<br /><br />The group has ramped up cost cutting measures and says costs for the full year will be $80m lower than in 2008.<br /><br />IHG is halfway through a relaunch of its budget hotel chain Holiday Inn and said it remains on track to complete the programme by 2010. Its shares dipped by 3.9 per cent to 728p.