InterContinental on recovery path

10th Aug 2010 07:02

Half-year results from InterContinental Hotels underpin that the hotel trade is showing signs of recovering from the effects of the recession, and not just at the budget end of the market. The Holiday Inn owner reported a better than expected 22% rise in operating profit to $219m in the six months ended 30 June. Broker Charles Stanley expected to see earnings of $210m. Pre-tax profit increased from a loss of $50m to a profit of $192m. Revenue rose to $772m, up from $726m.Trading strengthened as the first half progressed with global Revenue per Available Room (RevPAR) up 3.9% overall and 7.4% in the second quarter. July global constant currency RevPAR was up 8.1%.By region, the Americas' RevPAR was up by 2.2%, Europe, Middle East and Africa (EMEA) up 4% year on year and Asia Pacific rose 13%. Asia is leading the recovery with Greater China reporting RevPAR up 29.4% in the half. Charles Stanley forecast the Americas' RevPAR to be up by 5%, Europe, Middle East and Africa (EMEA) to be up 4% and Asia Pacific to rise 12%. The interim dividend up 5% to 12.8 cents, equivalent to 8.0 pence."As anticipated, occupancy drove RevPAR increases, with business travellers returning in greater numbers," said chief executive Andrew Cosslett."Rates are now stabilising across the world, with most markets seeing rate growth towards the end of the first half. The economic environment does remain uncertain, however, with short booking windows and limited visibility."