UPDATE 1-IHG to return $750 mln to shareholders, may sell more hotels
(Adds details, comments, shares)
LONDON May 2 (Reuters) - InterContinental Hotels Group said on Friday it would return $750 million to shareholders and was considering selling off more hotels after reporting its strongest revenue per room performance in seven quarters.
IHG, which runs 4,700 hotels with brands such as Crowne Plaza, Holiday Inn and InterContinental, said first-quarter global revenue per available room (RevPAR) - a key industry measure - grew 6 percent, helped by higher occupancy and rates and 6.6 percent growth in its core North American market.
Shares in the firm rose 7.5 percent to 2,176 pence by 0732 GMT, the second biggest gainer in the FTSE 100 index.
IHG has a strategy of selling on its hotels and then managing them under contract. In its first quarter, IHG completed the sale of its InterContinental Mark Hopkins San Francisco hotel and an 80 percent interest in InterContinental New York Barclay for a total of $394 million.
This has led to huge cash returns to shareholders, with Friday's $750 million special dividend taking the total returned to investors to $10.3 billion since 2003.
IHG said it was considering further asset sales due to strong demand for prime hotels globally.
The group now has seven owned and leased hotels, including its two remaining trophy InterContinental hotels in Paris and Hong Kong, which analysts at Numis expect could be sold for double their $650 million book value.
The firm has three more owned hotels in its pipeline.
Like rivals such as Marriott and Starwood, IHG is enjoying improving trade in the United States, its biggest market, where hoteliers are benefiting from increasing demand and lower than average growth in new rooms.
Revenue per room in Europe was up 6.1 percent in the period, helped by double digit growth in Britain reflecting improvements in the economy. It grew by 3.9 percent in greater China, where almost a third of IHG's expansion pipeline is located.
- Alabama man gets $1,000 in police settlement, his lawyers get $459,000
- New York police officer critically wounded in hatchet attack |
- Doctor with Ebola in NY hospital, nurse declared virus-free
- Exclusive: Charred tanks in Ukraine point to Russian involvement
- Putin accuses United States of damaging world order