The hotel giant's CEO says that prices could go up as economy recovers and occupancy increases
InterContinental Hotels Group Plc (IHG), the owner of the Holiday Inn brand, will be able to raise prices further this year as increased business travel leads to growth in occupancy, Chief Executive Officer Andrew Cosslett said.
"As occupancy continues to rise, companies like ours do find ourselves in a position to raise rates," Cosslett, 55, said today in an interview in Berlin, where InterContinental is hosting the International Hotel Investment Forum.
Business and leisure travel is recovering after companies and consumers trimmed spending during the recession. Revenue per room in the hotel industry rose worldwide in 2010, according to STR Global. Accor, Europe's largest hotelier, said last month that average room rates are improving in upscale and midscale hotels and "gradually stabilizing" at the economy level.
InterContinental, the world's largest hotel group by number of rooms, increased revenue per available room by 6 percent in 2010. The Denham, England-based company has said it aims to expand room numbers by as much as 5 percent a year from next year after more modest growth in 2011.
InterContinental may spend more than $100 million a year on acquisitions, Cosslett said. The hotelier may also add as many as four brands within three-to-four years in countries including China and the U.S., two of its major markets. InterContinental will operate about 50 hotels in Shanghai by 2014, the CEO said, calling growth prospects in the Asian country "tremendous."
The company, which gets most of its income from franchised properties, is in the process of selling the InterContinental New York Barclay and may dispose of more hotels, Cosslett said.