May 10 (Bloomberg) -- InterContinental Hotels Group Plc, owner of the Holiday Inn brand, said first-quarter profit gained 28 percent as it raised revenue per room in China and the U.S., its biggest market.
Net income rose to $69 million from $54 million a year earlier, the Denham, England-based company said today in a statement. That beat the $62.3 million average estimate of three analysts in a Bloomberg survey.
Business and leisure travel is recovering following the global recession of 2009. Revenue per room, or revpar, a measure of room rates and occupancy, rose worldwide in the year’s first three months led by South America, according to researcher STR Global. InterContinental, the world’s largest hotel group by rooms, has most of its more than 650,000 rooms in the Americas.
InterContinental gained as much as 3.8 percent, the most in six weeks, and was up 3.3 percent to 1,290 pence in London trading as of 11:35 a.m. The stock has advanced 17 percent in 12 months.
Franchised hotels in the Americas helped deliver earnings that were above expectations, Nigel Hicks, an analyst at Liberum Capital, said in a note to investors. After a “good start to the year,” the company faces more difficult revenue per room comparisons in the quarters to come, London-based Hicks said.
The U.K. company’s global revenue per room rose 6.9 percent in the quarter, with a 19 percent surge in Greater China and an 8.4 percent increase in the U.S., where growth was the highest since the second quarter of 2006, Chief Executive Officer Andrew Cosslett said in the statement.
“We remain confident about the outlook for the rest of the year,” said Cosslett, who will leave the company on June 30 and be replaced by Richard Solomons. InterContinental has added hotels in Las Vegas to its resort offerings and is jointly developing 19 Holiday Inn Express hotels in India by 2016.
Hyatt Hotels Corp. said this month that revenue per room for lodging owned or leased for at least a year advanced, while Starwood Hotels & Resorts Worldwide Inc. last month reported increases in all regions except Africa and the Middle East, where political unrest affected business.
InterContinental said it expects an “operating profit impact” of as much as $20 million from the Middle East and natural disasters in Japan and New Zealand.
TUI Travel Plc, Europe’s largest tour operator, said today that the cost of canceled trips to Egypt and Tunisia and of repatriating customers because of political turmoil reduced fiscal first-half earnings by 29 million pounds. Smaller rival Thomas Cook Group Plc said yesterday that earnings were reduced by 22 million pounds by the events.
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