InterContinental to return $1bn as profits rise
InterContinental, the world’s biggest hotelier, cheered investors by promising to return $1bn (£642m) to them partially funded from the planned sale of a New York hotel as it posted a rise in profits boosted by trade in the US and China.
The British-based group, home to the Crowne Plaza, Holiday Inn as well as InterContinental brands, said it will pay a $500 special dividend in the fourth quarter of this year, and also kick off a $500 million share buyback in the same three months.
Chief executive Richard Solomons said the return of capital reflected the expected sale of its New York Barclay hotel, which analysts expect to fetch $300m, and was in line with its strategy to sell hotel assets in return for management contracts.
He added the InterContinental Park Lane, in London, is likely to be the next hotel for sale. The group reported a 6 per cent rise in half-year operating profits with growth across all its regions and from increased hotel occupancy and also room rates.
“While the global economic environment remains uncertain, Intercontinental continues to trade well and we are confident that our strategy will deliver high quality growth into the future,” Solomons said in a statement today.
Growth in global revenue per available room, a key industry measure, grew 6.5 per cent, with the US and China ahead 7.2 per cent and 9.7 per cent, respectively. In July, global growth slowed by 3.8 per cent.