Tags: InterContinental | Hotels | downturn | IHG

InterContinental Hotels Sidesteps Downturn

By Constance Gustke   |   Wednesday, 14 Dec 2011 03:45 AM

Economic turmoil hasn’t slowed InterContinental Hotels Group (IHG). The world’s largest hotelier has been logging higher room rates and adding hotels, proving its staying power. So far this year, the stock has slid 11.8 percent, versus a 21 percent drop for competitor Marriott International (MAR).

IHG’s secret is building a network of 666,000 rooms in more than 4,500 hotels spread among 100 countries. More than 1,100 new hotels are in the works. Brands include Crowne Plaza, Holiday Inn, Staybridge Suites and its namesake InterContinental hotels. Lately, IHG is currently freshening up its 400 upscale Crowne Plaza hotels, which CEO Richard Solomons calls “a top priority.”

IHG powerhouse Holiday Inn also got a makeover on its 300,000 rooms. Beginning in 2008, shabby rooms were shuttered and lobbies and exteriors were spruced up.

The result is that the U.K. company is pumping cash. Third-quarter operating profits rose 33 percent versus a year ago. Revenues climbed 8 percent to $467 million versus $421 million. Global revenues per available room rose 6.4 percent, lead by 10.8 percent growth in China and 8 percent in the United States. This firm foundation will help IHG drive market share, grow margins and invest in brand growth, noted Solomons.

Solid demand

Of the four analysts followed by Thomson/First Call, three have strong buy recommendations, with one hold.

Raymond James analysts have an outperform rating on IHG, citing solid demand from business customers that should continue in 2012.

The company reports next on Feb. 7.

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Economic turmoil hasn t slowed InterContinental Hotels Group (IHG). The world s largest hotelier has been logging higher room rates and adding hotels, proving its staying power. So far this year, the stock has slid 11.8 percent, versus a 21 percent drop for competitor...
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