InterContinental Hotels Group posts solid trading in first quarter

8th May 2013 07:07

FTSE 100-listed InterContinental Hotels Group has posted solid trading and progress on its asset sales in the first quarter of the year driven by a 2.0 per cent annual daily growth rate. In the first three months of the financial year, the group - which owns a range of hotel accommodation including Holiday Inn - reported that system size had risen by 1.9% year-on-year to 674,000 rooms as of March 31st. Some 14,000 rooms were signed in the first quarter, taking the pipeline to 176,000 rooms at the end of the quarter.The group sold its InterContinental London Park Lane base for $469m gross cash proceeds as part of its strategy to reduce the capital intensity of the group. Of this amount, $95m was used to provide security over UK pension liabilities which were previously secured against the hotel. A 30-year management contract, with three 10-year extension rights was also secured and the group said that management fees were expected to be approximately £4.0m ($6.0m) per annum.First quarter revenue per available room (RevPAR) was up 3.1%, with rate up 2.0% and occupancy up 0.6%. The group said that the shift in timing of Easter from April to March had adversely impacted RevPAR in the quarter. It said that a corresponding boost could be observed in April when RevPAR was up 6.2% for the group as a whole compared to 0.6% in March.In the Americas region, revPAR increased by 4.1%. Trading was strongest in the luxury/upscale brands segment of the business, led by Hotel Indigo - up 11.3% - and InterContinental - up 8.6% - the group added.One individually significant liquidated damages receipt of $31m was registered in the Americas managed business in relation to the eight hotels that left the system, the group further disclosed.Richard Solomons, Chief Executive Officer of InterContinental Hotels Group, commented: "Our preferred brands and global scale helped deliver good pipeline growth in the quarter, with over 100 hotels signed, led by our Americas and Greater China region."MF