Hotel firm makes room for payout
Filed under: News
Intercontinental Hotels Group (IHG), which along with two online travel agents is under investigation for potential unlawful practices, said operating profits rose 7% to 286 million US dollars (£183.2 million) in the six months to June 30 as it benefited from strong growth in China.
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IHG will start returning £640.7 million to shareholders later this year, reflecting its "good" half-year results and confidence that it will conclude the sale of its InterContinental New York Barclay hotel, sending shares 7% higher.
The group added that a hotel in London's Park Lane - formerly the site of a royal residence - was likely to be next to be sold as it looks to offload assets but it will not make a decision until after a new hotel in Westminster opens to guests next year.
The strong performance came shortly after the Office of Fair Trading revealed provisional findings that IHG has been involved in a potentially unlawful deal with Booking.com and Expedia to limit discounts on rooms.
When asked about the matter on Tuesday, IHG repeated its previous statement that it believes it is in compliance with the law.
Meanwhile, bookings across its 51 London hotels have seen 80% occupancy over the Games, which is about normal for the time of year, but hotels in the centre, including a new Holiday Inn and Staybridge Suites in Westfield near the Olympic Park, have enjoyed a slight boost.
The group is helping to run the Olympic village, with 75 of its staff from around the world helping cater for the athletes.
IHG's half-year results were boosted by a strong performance in China, where revenues per available room - a key metric in the hotels industry - were up nearly 10%. Total revenues rose 5% to 878 million US dollars (£562.6 million). However, in Europe this was up just 1.9% amid the eurozone debt crisis, and slipped to a 0.2% decline in July.
- Hotel discount deals investigated
- Brits buy holidays and currency online
- Expedia.com and Booking.com accused of price fixing