(Adds details, comments, shares)
LONDON May 2 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
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.
"Current trading trends give us confidence for the rest of
the year," IHG chief executive Richard Solomons said.
(Reporting by Neil Maidment; editing by Sarah Young and Jane