Growth slows for hotelier as guests skimp
The world’s largest hotelier, InterContinental Hotels Group (IHG), has reported first-half operating profits of $291m (£153m), an increase of 29 per cent – despite slow second quarter growth from its US operations.
Reporting in US dollars for the first time, IHG announced an increase in revenue per available room (RevPAR) of four per cent, though the US lagged behind, as expected, at 2.4 per cent growth. In EMEA, business was driven by the refurbishment of key properties in London and Paris and a RevPAR growth of 27.1 per cent in the Middle East.
RevPAR – the industry metric which takes into account both room rates and occupancy – is interesting, said CEO Andrew Cosslett, but the focus is on room growth. The company has already hit its three-year target of adding 60,000 rooms by the end of 2008, and “is now focused on exceeding its existing targets by as much as possible”.
This might seem like an bold strategy at a time when airlines are cutting back on flights, but Cosslett does not see evidence of declining demand.
“People are prioritising. They may travel to different places, to different hotels and in different parts of the plane, but they are still travelling. Our broad portfolio of brands, geographical balance and a fee-based business model position us well to take full advantage of this,” he said.
The interim dividend was up six per cent to 12.2 cents, or 6.4p, at the closing rate on 8 August.