IHG profits jump 10%, with Park Lane next up for sale at £200m

Intercontinental Hotel Group (IHG) cheered City analysts when it announced full-year operating profits of US$614m (£396m), up 10 per cent, on revenues which were four per cent higher at $1.8bn.

The revenue per available room (RevPAR) grew by 6.3 per cent in the US, 1.7 percent in Europe and 5.4 per cent in Greater China where the new Hualuxe brand is building strongly.

The Intercontinental London Park Lane is one of two properties (New York being the other) up for sale as the group moves further to concentrate on management rather than property ownership.

The Intercontinental Park Lane has a price tag of £200m and Jones Lang LaSalle is the agent organising what is one of the biggest single hotel sales in London in recent years.

IHG Chief Executive Richard Solomons (pictured) is clearly not holding his breath for a quick sale, however, so the pace of returning money to shareholders may slow somewhat.

“It is impossible to say how long it might take,” he said. “There are particular types of buyers for these trophy assets and Park Lane is a great asset in a great location.”

IHG has also recently opened the Westminster, with nearly 250 rooms, next to New Scotland Yard, bound to be popular with politicians and business people. IHG worldwide opens a hotel every 39 hours on average, with 226 new properties coming on stream last year.

Solomons added that 2012 had been a year of “significant progress”. “Along with a 2.7 per cent increase in our room count, increasingly fueled by expansion in developing markets, we’ve been able to deliver a significant rise in fee revenue, the key measure of success in our core business of franchising and managing hotels.”

The CEO said that increasing scale and focus on reducing costs had allowed reinvestment in the business and produced “solid margin progression, resulting in double-digit profit and dividend growth”.

Do you have news for CN? Email: pcolston@mashmedia.net

Paul Colston

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Paul Colston

Managing Editor, Conference News & Conference & Meetings World.

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