Intercontinental Hotels rewards Shareholders after Bumper First Half

Posted on 9 August, 2013 by Kirsten Kennedy

The international hotel industry has begun to thrive once more, with tourists and businesspeople taking advantage of good deals on flights and a less perilous economy to travel to far-flung destinations. As a result, some of the world’s leading hotel groups are managing to post results not seen since before the global economic downturn – spelling good news for their shareholders.

Intercontinental Hotels Group (IHG) is just one global chain reaping the rewards of a more successful start to the year. In the first half operating profits climbed by 20 per cent, resoundingly exceeding expectations.

Revenue, meanwhile increased by 7 per cent and global revenue per available room (RevPAR), which is used to monitor turnover in the hotel industry, rose by a respectable 3.7 per cent.

As a result, IHG has made the decision to reward shareholders for their continuing investment in one of the world’s largest hotel groups with a special dividend, in October of this year.

This sum will be paid out along with the standard interim dividend, which will itself increase by 10 per cent.

Chief executive Richard Solomons spoke of the group’s achievements upon release of the half year report.

He said; “Our global scale has allowed us to reinvest in the business whilst growing margins, resulting in solid underlying profit gains led by our Americas region, and strong cash flows.”

IHG is a leading international hotels operator, with names such as the Crowne Plaza and Holiday Inn found in its business portfolio. At present, over 4,600 hotels worldwide are owned by the group, although continuing investment in strong markets indicates that this figure is set to grow over the next few years.

As stated by Mr Solomons, the American core market played a huge part in first half growth. RevPAR in this region increased by 4.5 per cent alone.

This helped to make up for RevPAR growth of only 0.4 per cent in the European market, which still continues to suffer as a result of the ongoing Eurozone crisis. It also alleviated some of the pressure on the Chinese market, which has been earmarked as a focal point for future growth yet struggled thanks to a number of natural disasters in Western China during the second quarter.

With tourism once more a feature of the lives of UK families and holiday brands posting positive early results for the summer season, it appears that this upward momentum for the hotel industry, and groups like IHG, is set to continue.

Do you enjoy staying in luxury hotels whilst on holiday, or do you prefer to keep costs down and save money for restaurants and local sightseeing opportunities?




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