Broker snap: Group bookings reviving at InterContinental

7th Oct 2009 12:39

Ahead of results due on 10 November, brokers have been turning their attention to Holiday Inn owner InterContinental Hotels and are seeing signs of a recovery in the business travel market.Broker Panmure Gordon said the relaunch of the Holiday Inn has been driving a turnaround in the fortune of InterContinental, which slipped into the red in the first half of the year.The broker is now expecting the hotel group's revenue per available room (revPAR) to hold steady in 2010, having previously pencilled in a 2.5% slide in revPAR from 2009 levels.'This leads us to upgrade our 2010 EPS estimate by 12% to 72.7¢, and to increase our price target from 870p to 910p,' Panmure analyst Simon French said. The broker has a 'buy' recommendation on the stock, though it acknowledges that short-term risks still exist in the form of room rate discounting by competitors and a possible swine flu outbreak in the Autumn and Winter seasons.The trigger for increased optimism on the part of the broker appears to be an interview the hotel chain's chief executive officer, Andy Cosslett, gave on 23 September in which he disclosed that group bookings were beginning to emerge and conference business is reviving.Citigroup has also joined the fan club, raising the stock from 'hold' to 'buy'.