Though hotels are an obvious victim of an economic slowdown – particularly susceptible to the plight of the so-called squeezed middle – there are plenty of long-term positives on InterContinental’s side.
The group’s portfolio of well-known brands means it will remain the go-to choice for established customers, and an increasing pool of retirement age travellers to target in both its developed and emerging markets gives it exposure to all the right places.
In announcing the two-stage payout, the firm has also distracted attention from the Office of Fair Trading’s recent allegations that InterContinental – along with travel websites Booking.com and Expedia – broke competition law by signing deals restricting the discounts offered on hotel rooms.
Investors were certainly mollified – sending shares up more than six per cent yesterday after hearing of their windfall.
If InterContinental sticks to its “asset-light” balance sheet and keeps handing out cash, investors are unlikely to change their minds soon.