InterContinental Hotels First-Quarter Profit Gains on China
InterContinental Hotels Group Plc (IHG), the world’s largest provider of hotel rooms, reported a 5.4 percent increase in first-quarter earnings, helped by increased revenue per room in China and the U.S.
Operating profit rose to $118 million, the Denham, England- based company said in a statement today. That beat the $114.4 million average estimate of 11 analysts surveyed by Bloomberg. Sales climbed 3.3 percent to $409 million compared with a $407.3 million average estimate of 10 analysts.
InterContinental is benefiting from rising demand in emerging markets such as the greater China region, which accounts for about 13 percent of group revenue. Global revenue per available room gained 7 percent in the quarter amid a recovery in business and leisure travel. The company said it is “confident” it will gain market share this year after revenue per room increased 6.1 percent in April.
“Broadly the momentum is continuing in April,” Chief Executive Officer Richard Solomons said on a conference call.
InterContinental Hotels fell 0.1 percent to 1,464 pence at 8:49 a.m. in London trading. The shares have risen about 27 percent this year.
Revenue per room in the Greater China region climbed about 12 percent during the quarter, while sales in that market gained 10 percent to $54 million. The company says the region accounts for about 30 percent of its global pipeline for expansion over the next three to five years. The company currently has 174,554 rooms in its pipeline.
Intercontinental Hotels said it is “encouraged” by talks with another company over the planned sale of its New York Barclay site. The discussions are “exclusive” and there is “no pressing need” to sell.
The impact of the Olympics being held in London this year will be “broadly neutral,” Intercontinental Hotels said.
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