InterContinental Hotels Group (IHG) is the latest big hotel corporation to feel the heat of the global recession, posting a 38% decline in profit for the first half of 2009.
The company reported a 25% drop in turnover (of nearly $250m) in the six months to 30 June to $726m (£441m) compared with $974m (£592m) in the same period last year.
The half-year results showed that revpar declined by 16.2% in the first quarter, with a second-quarter decline of 18.6%. Operating profit for the period was also significantly down to $179m (£109m), 38% lower than the $291m (£177m) reported for the previous year.
Chief executive Andy Cosslett said the market would see "little respite" from the tough trading conditions but added that IHG had outperformed its rivals in all three of its regions.
However, Cosslett admitted that premium and business travel had been the major casualties, and that this business needed to return before the situation could improve.
"The continued outperformance of our brands around the world is encouraging, as is our signings pace which, despite the continued scarcity of financing for developers, is still averaging around one deal a day. We are on track to open more than 400 hotels this year," he said.
"We are making good progress with the global relaunch of Holiday Inn and over 1000 hotels have now completed this process. Feedback from relaunched hotels continues to be positive and we are still committed to completing the programme by the end of 2010."
Looking to the future, Cosslett said: "The outlook remains challenging, but we are confident that with our fee based business model, substantially reduced cost base, strong financial position and the renewal and refreshment of our brands supported by our system scale, we will outperform the competition and be well positioned for the upturn."
By Emily Manson
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