Profits rise 10% at InterContinental Hotels

IHG own the Roxburghe in Edinburgh
IHG own the Roxburghe in Edinburgh
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Hotels giant InterContinental has reported a 10 per cent rise in annual profits, despite a slowdown in sales growth.

The owner of the Crowne Plaza and Holiday Inn chains posted an operating profit of $614 million (£396m) for 2012, up from $559m a year earlier, on revenues 4 per cent higher at $1.8 billion.

The group, which returned $1bn to shareholders in August, also said it will push ahead with the sale of its flagship New York Barclay and InterContinental Park Lane hotels.

Chief executive Richard Solomons said: “The financing environment remained tough through 2012 in many of our key markets, but we still signed on average one hotel a day into our pipeline. This reflects the excellent relationship we enjoy with our owners and further strengthens our foundation for high-quality growth.”

He said the firm was positioned for “further good performance in 2013, despite the challenging economic environment”.

InterContinental has more than 4,600 hotels worldwide, including the Roxburghe in Edinburgh and Hotel Indigo in Glasgow.

The number of rooms across its estate grew by 2.7 per cent to 676,000, but growth in revenues per available room – a key industry measure – slowed to 5.2 per cent, from 6.2 per cent a year ago.

Richard Curr, head of dealing at Prime Markets, said: “The sale of Intercontinental’s flagship New York Barclay and InterContinental Park Lane hotels might not be so good for longer term group prestige, but the proceeds will bolster the coffers in the near term. This, coupled with the confidence expressed by management over continuing growth, marks the shares out as a clear ‘buy’.”