China boosts IHG
By Roger Blitz, Leisure Industries Correspondent
China is driving a tentative recovery in room rates at InterContinental Hotels Group, enabling it to report its first uplift in revenue per available room in 18 months.
The world’s biggest hotel group by number of rooms said first quarter revenues were up 3 per cent to $362m, while operating profit was up 15 per cent, ahead of most analysts’ forecasts.
IHG’s shares were partially bolstered by upbeat numbers from US-based rivals Marriott and Starwood, as the lodging industry finds consumers responsive to their rate-cutting promotions following a tough 2009 for hotels.
But with the recovery led by increased occupancy rather than a rise in rates, Andrew Cosslett chief executive, cautioned that it was difficult to see how long the recovery would continue.
“Business travel is returning although at this stage mainly to the luxury end of the market which was most affected by the recession,” Mr Cosslett said.
“We expect the more resilient midscale sector to benefit from this trend as the year progresses and market norms are reset. We are encouraged by the return to growth but rates remain under pressure in many markets, booking windows are short and visibility is limited.”
Global revenue per available room (revpar), the benchmark indicator for the lodging industry, grew 0.2 per cent for the quarter, including a 4.1 per cent rise in March. April’s global revpar showed a 5.2 per cent rise.
Asia Pacific is outperforming other regions, turning in a 10 per cent revpar increase. Greater China revpar rose 22.2 per cent.
The Americas saw revpar fall 1.9 per cent, with a slight rise in occupancy unable to offset a fall in rate. In the EMEA region, revpar grew 0.5 per cent, the best performers being Germany and France.
The shake-out in the IHG portfolio continues apace. IHG said 40,000 rooms will be taken out of the system this year, matching the number of rooms it expects to have opened in 2010.