* $350m special dividend to be paid out in October
* Ordinary interim dividended raised 10 pct
* H1 operating profit up 20 pct at $338m
* Shares up 3 pct
By Neil Maidment
LONDON, Aug 6 InterContinental Hotels Group
, the world's biggest hotelier, posted a big rise in
first-half profits on the back of strong demand in the United
States and said it would return $350 million to shareholders via
a special dividend.
IHG, which operates 4,600 hotels globally and is home to the
Crowne Plaza, Holiday Inn and InterContinental brands, added to
recent upbeat comments from rivals Starwood and Marriott
International on high U.S. demand, which is helping
offset tougher trading conditions in Europe and Greater China.
"Our high quality pipeline, broad geographic spread and
fee-based model give us confidence in the outlook, despite the
ongoing challenging economic conditions in some of our markets,"
Chief Executive Richard Solomons said on Tuesday.
Operating profit for the six months to June 30 rose 20
percent to $338 million, ahead of an average forecast of $323
million given in a company-compiled survey of analysts'
estimates, while the firm also raised its ordinary interim
dividend by 10 percent to 23 cents a share.
Shares in IHG were up 3 percent at 1965 pence at 1030 GMT.
The company's strategy of selling hotels in return for
management contracts has resulted in strong free cash flow
levels, allowing it to return over $7.5 billion to shareholders
The firm sold its London Park Lane hotel for 301.5 million
pounds ($462 million) in March and is now in the process of
selling its New York Barclay Hotel, which it began marketing in
First-half revenue rose 7 percent to $936 million, while
global revenue per available room (RevPAR), a key industry
measure, was up 3.7 percent, driven by higher rates and demand
in the Americas, which account for nearly half of IHG's sales.
Second-quarter RevPAR grew by 4 percent, up from a 3.1
percent rise in the first.
In the United States, where hoteliers are benefiting from a
rebound in business travel, which has in turn boosted the rates
hotels can charge for rooms, first-half RevPAR grew 4.7 percent,
and was up 6.2 percent in Asia, the Middle East and Africa.
RevPAR in Europe rose 0.4 percent thanks to resilient
trading in key markets like the UK, Germany and France, but in
Greater China it declined by 0.1 percent for the six months.
That compared to 9.7 percent growth in the same period a
year ago as business suffered from a slight economic slowdown,
cuts in government spending and a number of natural disasters
including the Sichuan earthquake.
"It's true that the rate of economic growth has slightly
slowed there but we are still looking at GDP growth of around
7.5 percent, which is pretty good compared to the rest of the
world," Chief Financial Officer Tom Singer told reporters.
The firm said that its RevPAR performance in Greater China
was still 5.9 percentage points ahead of the wider market but
would not say if it expected to reach positive RevPAR growth in
the second half of the year.
Singer reiterated that the region's fundamental drivers
"remain highly compelling", with the firm pointing to almost a
third of its expansion pipeline, which represents hotels and
rooms where a contract has been signed and fees paid, being in
IHG said that current trading trends were broadly in line
with the first half of the year.