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More hotels to go under hammer, says InterContinental

27 May 2004
More hotels to go under hammer, says InterContinental

InterContinental is poised to put another block of hotels onto the market, as part of its ongoing disposal programme.

The hotel chain said so far 27 hotels, worth £314m in total, had been sold and agreement had been reached on a further two, worth a combined £29m.

The chain was "actively progressing" with the sale of another 13, worth about £100m, and the next tranche, worth £500m, would be placed onto the market "shortly". The disposal programme was first announced in March.

The announcement came as InterContinental posted quarterly figures for the three months to the end of March, showing that the recovery in the US and UK is continuing, and there are some signs it might be catching on in continental Europe too.

The hotels reported turnover up by 2.1%, to £348m, with operating profit rising by 51.7%, to £44m.

But InterContinental pointed out the growth was against the first three months of last year, when the trade was suffering in the run-up to the war in Iraq.

In the Americas, operating profits were up by 18%, from $50m (£24.4m) to $59m (£32.3m), with a 5.5% group improvement in revenue per available room, and revpar for the InterContinental brand up by 10%.

Europe, the Middle East and Africa saw operating profits rise by 21.3%, from £13m to £16m, driven largely by the UK and Ireland.

The O&L Holiday Inn business reported underlying revpar growth of 17.3% in London and 8.2% in the regions, although this was offset by a weak performance in continental Europe.

Asia Pacific, bouncing back from Sars, reported operating profits up by 42.9%, from $7m (£3.8m) to $10m (£5.5m), driven by a strong performance by the InterContinental Hong Kong.

"We are experiencing an encouraging recovery in both North America and the UK, with April showing continued strong performance across these two areas. We are also seeing tentative signs of the beginning of a recovery in Europe," said InterContinental.

"Trading in Asia Pacific has returned to pre-Sars levels. Growth remains occupancy driven in all regions with early evidence of potential rate recovery in some US markets and London," it added.

by Nic Paton

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