InterContinental Hotels, the world's largest hotel group, shrugged off the impact from the Middle East conflict and the recent terrorist scare yesterday, saying it had seen a short-term boost to its London hotels.
Andrew Cosslett, the chief executive, said the group's hotels filled up rapidly in London and near the airports during the terrorist scare two weeks ago when tightened security led to flights being cancelled and travellers being stranded.
He admitted that the long-term impact from restrictions on air travel was uncertain, but was not overly concerned that the continued threat of terrorism would hit the business. "We have to wait and see, but the evidence is that the traveller today is prepared to put up with inconvenience rather than alter their travel plans," Mr Cosslett said. He said the time it took for travel to bounce back after bombings such as those in Sharm el Sheikh, London and Bali was getting "shorter and shorter."
The company's five hotels in Lebanon have stayed open and escaped damage throughout the conflict but occupancy levels dropped sharply from more than 75 per cent before the fighting started. Occupancy has since risen to more than 50 per cent at the two biggest hotels in Beirut, which house UN staff and the media, but Mr Cosslett admitted Lebanon would remain a drag for the remainder of the year while the rest of the Middle East was booming. The region accounts for less than 10 per cent of group profits, with the US making up the lion's share at 70 per cent.
InterContinental, which runs seven hotel chains including Crowne Plaza and Holiday Inn, unveiled a 30 per cent rise in underlying profits to £107m in the first half, with revenues up 16 per cent to £394m. While the company pledged to return more money to shareholders, investors had expected more news on the cash return and the shares slipped.
InterContinental has already returned about £2.75bn to investors after selling hotels and leasing them back. It now owns flagship hotels in London, Paris, New York and Hong Kong with the rest of its hotels being franchised or managed.
Mr Cosslett admitted the company had set itself an "ambitious" target of adding a net 50,000 to 60,000 rooms by the end of 2008. But with 130,000 rooms currently in the pipeline, he was confident of achieving the target.Reuse content