Intercontinental warms up for Olympics with big dividend rise
Wednesday 15 February 2012
Intercontinental Hotels, the world's biggest hotel operator, beat City forecasts for its 2011 profits and accompanied that with a bumper dividend increase.
"You can really call this a great British success story," the chief executive, Richard Solomons, said. "We are the largest hotel group in the world, based in Britain but the UK accounts for just 5 per cent of our revenues."
He is excited about the impact of the Olympics and the Queen's Jubilee on his British hotels this year, with two new Holiday Inn and Staybridge hotels opening at Stratford, and IHG offering more than 50 London hotels.
He said: "We are now 80 per cent booked for the Games. It's not just London hotels and there has been a good knock-on effect to further out-of-town hotels. We are also managing the main athlete and official accommodation units in the Olympic Village, drafting in more than 100 of our best general managers from around the globe."
London's InterContinental Park Lane remained one of the star performers last year, with revenues per available room up by 7.3 per cent in 2011 against the group figure of 6.2 per cent. But China and the US remain the drivers, with revenue per available room growing by 10.7 per cent and and 7.5 per cent, respectively.
IHG plans to launch two new brands of hotel this year, one for each of those regions. Mr Solomons is playing it close to his chest which position in the market these will take, although its seems likely the US brand will be mass market and the Chinese upmarket.
He hopes they can reproduce the success of Hotel Indigo, the group's boutique hotels label, which has gone from zero to 100 planned hotels in seven years.
The only major weak points during 2011 were Egypt and Bahrain, which were hit by civil unrest, and Japan, where the economy was still recovering from the tsunami.
Pre-tax profits rose 34 per cent to $532m (£338m) on revenues up 9 per cent to $1.8bn. The dividend is up 15 per cent to 55 cents a share.
Revenues and room rates in January were stronger than in the final quarter of 2011.
Mr Solomons said: "In spite of the considerable uncertainty in the eurozone, IHG is well positioned to globally benefit from positive, long-term industry trends, and, in particular, growing demand in emerging markets."
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