Broker snap: Business travellers return to InterContinental

25th Oct 2010 12:28

Panmure Gordon has upgraded its forecasts and target price for InterContinental Hotels after the company announced another positive trading update.The group revealed a 6.7% increase in revenue per room (or revpar) in its Americas division for the third quarter. "We have increased our Americas revpar assumption for the 2010 full-year from 3.5% to 4.6%", the broker said.Occupancy growth rose by 3.8 percentage points and rate growth increased by 0.8% as business travellers returned in greater numbers.The company is the world's top hotelier in terms of number of rooms through its Crowne Plaza and Holiday Inn chains.Relaunches of revamped Holiday Inn and Holiday Inn Express hotels delivered revpar growth rates of 7.9% and 6.8%, respectively."As a consequence of our Americas revpar upgrade, our 2010 earnings per share forecast increases by 2.7% to 95.1¢ and our 2011 earnings per share forecast increases by 2.5% to 106.2¢", the broker said.The upgrade to forecasts has driven Panmure increase in its target price for InterContinental from 1,235p to 1,370p. The broker has strongly reiterated its 'buy' recommendation.