Hotel giant's profits fall by third

THE world's biggest hotelier yesterday warned that trading would remain tough this year until business travellers return in greater numbers.

Yet despite posting a 34 per cent drop in profits during 2009 to $363 million (232m), Intercontinental Hotels beat analysts' expectations and held its full-year dividend at 41.4 cents (26.5p).

The group – which owns Crowne Plaza and Holiday Inn – said revenue per available room fell by 14.7 per cent in 2009, with a fourth-quarter fall of 10.9 per cent, while the January 2010 decline was just 3.8 per cent.

Its chief executive, Andrew Cosslett, said: "The fourth quarter did show some improvement in trends and occupancy has now stabilised. Rates, however, remain under pressure and we expect trading to stay tough until business travellers return in greater numbers."

InterContinental – which has more than 646,000 rooms in 4,438 hotels worldwide – typically manages or franchises hotels instead of owning them and generates 70 per cent of its profit in the United States.

The group opened a net 26,828 new rooms in 2009, showing a slowdown from the prior year due to the scarcity of financing for new developments, but has 210,363 new rooms in the pipeline for 1,438 hotels.

The company also said it was on track with the $1 billion relaunch of its Holiday Inn brand.