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InterContinental plans to sell UK hotel properties for £1.3b

09 September 2004
InterContinental plans to sell UK hotel properties for £1.3b

Hotels giant InterContinental moved today to put the vast majority of its UK hotels onto the market for a total of £1.3b, as its disposal programme continued apace.

The group announced a major asset disposal programme in February, and has already put £589m of hotels on the market, with £330m of disposals already completed.

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The addition of the UK portfolio means the chain will have disposed of more than £2.2b of assets since the former Six Continents separated its hotels and pubs divisions last year. A total of 76 hotels are being put on the market, including the InterContinental Paris, the Hilton InterContinental Mayfair, the Hilton InterContinental Kensington and a "major part" of the rest of its UK portfolio. In all the disposals, InterContinental will continue to manage the hotels, or have franchise agreements. The announcement came as InterContinental announced half-year results to the end of June, with the hotels reporting a 50.7% increase in operating profit. Overall, group pre-tax profits for the six months came in at £143m, up by 55.4% on the same point last year, with turnover up by 5.6%. Hotel operating profit for the three months to the end of June was also up by 50% as the chain continued to see a recovery in the UK, US and Asia Pacific, said InterContinental, although the market in Paris remained difficult In Europe, the Middle East and Africa operating profits were up by 56.3%, to £50m, largely driven by growth in the UK. America reported operating profit up by 10.7%, with Asia Pacific also ahead on last year. Chief executive Richard North described the results as "strong". He added: "All in all we are making real progress executing the strategy we set out at separation in April 2003, transforming the company to one which is all about brands, managing and franchising." Within the EMEA region, Holiday Inn continued to do well, with revenue per available room (revpar) in London up by 22.3% and in the regions by 6.7%. The Paris and Amsterdam markets remained "soft", although Germany was improving. Current trading remained strong, said North, with the chain gaining "significant" market share in the UK, US and Hong Kong. "We continue to see strong occupancy growth across all brands led by the return of the business traveller. "Room rate growth has begun in key urban locations such as London and New York, but we still do not expect broad-based rate improvement before 2005," he added. "The European market remains weak, with Paris in particular very depressed and hard to predict. by Nic Paton Buy this week's *Caterer* magazine for more industry news and analysis
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