InterContinental Hotels revenues tumble

InterContinental Hotels (IHG) revealed that room revenues tumbled in October, as business customers, particularly in the US, gave its hotels a miss during the financial crisis.

The warning came as the world's largest hotel group posted operating profits up 8 per cent to $153m for the quarter to 30 September and vowed to maintain its record hotel expansion programme.

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Andrew Cosslett, the chief executive of InterContinental Hotels, said: "In October, we have seen a sharp deterioration in market conditions with preliminary data for the month showing a global RevPAR [revenues per available room] decline of 4.5 per cent and a decline of 5.7 per cent in the US." Despite the decline, he stressed that IHG, which includes the InterContinental, Crowne Plaza and Holiday Inn hotel brands, had outperformed the market.

In October, Mr Cosslett said that most business people had their eyes glued to the TV and newspapers learning about the global banking crisis and were "not thinking about travelling around and we would expect this to be the case for the foreseeable future".

The group's pre-tax profits tumbled by 19.8 per cent to $89m, partly as a result of costs associated with the rebranding of its Holiday Inn chain and an impairment charge related to the sale of some of its UK portfolio.

Mr Cosslett vowed to continue spending during the downturn, citing the pipeline of 1,173 hotels. "We are actually looking to gain advantage out of this [downturn] and emerge stronger the other side," he said.

For the three months to 30 September, IHG opened a record 19,056 rooms (135 hotels), primarily in the US.