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InterContinental ups dividend, sees strong growth

InterContinental ups dividend, sees strong growth
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First Published: Tue, Feb 15 2011. 01 21 PM IST
Updated: Tue, Feb 15 2011. 01 21 PM IST
London: InterContinental Hotels, the world’s biggest hotelier, showed its confidence in economic recovery by lifting its final dividend for the first time in three years and setting a target for opening more hotels.
The British group, home to the InterContinental, Crowne Plaza and Holiday Inn brands, met forecasts on Tuesday with a 22% rise in 2010 profit, driven by demand from Asia, business travellers and a revamp of its Holiday Inn chain.
“Growth in the final dividend reflects our confidence in our prospects,” said chief executive Andrew Cosslett, adding the hotel industry was set for strong growth and InterContinental aimed to grow its estate by 3-5% a year from 2012.
The group, with over 4,500 hotels in more than over 100 countries, also said it would sell its flagship InterContinental New York Barclay hotel and revamp its Crowne Plaza brand.
A spokesman declined to say how much that would cost, but said it would be less than the $1 billion Holiday Inn upgrade.
InterContinental’s upbeat tone chimes with recent comment from rivals, including US groups Marriott on Monday and Starwood earlier in the month, as the global economic recovery picks up pace.
InterContinental, which makes about two thirds of its profit in the United States, said it made an operating profit of $444 million last year, compared with a forecast for $442 million, according to Thomson Reuters I/B/E/S Estimates.
Revenue per available room (RevPAR), a key industry measure, was up 8.4% in January, following increases of 8% in the fourth quarter and 6.2% for the year.
InterContinental said it planned to pay a full-year dividend of 48 US cents, up 16% on 2009.
It expected little growth in hotel rooms this year as the Holiday Inn upgrade is completed. One trader said InterContinental shares were set to open up around 1.5%.
The shares have approximately trebled in value from lows in early 2009, and are nearing pre-recession highs seen in mid-2007. They closed at 1,386 pence on Monday, valuing the firm at 4 billion pounds ($6.4 billion).
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First Published: Tue, Feb 15 2011. 01 21 PM IST