IHG reports 'solid trading' despite economic challenges

IHG reports 'solid trading' despite economic challenges

InterContinental Hotel group reported ”solid trading” in the first quarter of the year, driven by increased rates.

Revenue per available room for the world’s largest hotel group rose by 3.1% as a result of a 2% increase in average rates.

Capacity rose by 1.9% to 674,000 rooms with 14,000 more signed during the three months.

The company sold the InterContinental in London’s Park Lane for $469 million while securing a management contract for up to 60 years on the hotel.

Chief executive Richard Solomans said: "We have had an encouraging start to our 10th anniversary year, with solid trading performance in the first quarter driven predominantly by growth in rate.

“Our preferred brands and global scale helped deliver good pipeline growth in the quarter, with over 100 hotels signed, led by our Americas and Greater China regions.

“The disposal of InterContinental London Park Lane, which completed on May 1, highlights the value of our asset portfolio and the attractiveness of InterContinental as one of the world's leading luxury hotel brands. It is also another step in our long standing commitment to reduce the capital intensity of IHG.

“Our high quality pipeline, broad geographic spread and fee based model give us confidence for the year ahead, despite the ongoing challenging economic conditions in several of our markets."

Former British Airways executive Jill McDonald has been appointed as an independent non-executive director of IHG from June 1. She is currently Northern Europe chief executive for McDonald's and previously spent 16 years with BA in a number of senior marketing positions.

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