Profits at InterContinental Hotels Group (IHG) have nosedived as the company was hit by the drop in business travel and the need to discount room rates.
In the first quarter to 31 March, IHG saw total operating profits fall 43% to $72m/£47m (2008: $127m/£82.9m).
Turnover was 24% lower than a year ago at $342m (£223m) and global revenue per available room (Revpar) at the company's 4,200-plus hotels declined 13.6%.
Andrew Cosslett, chief executive of IHG, said: "As expected the start to the year has been very challenging for the industry. Occupancy showed signs of stabilisation in the quarter, but room rates, which held up well during 2008, declined under the pressure of a very competitive market."
Global revpar was 19.8% down year-on-year in April and IHG said although forward bookings had held up room rates remained under pressure.
The company is currently working to reduce costs by $30m (£19.6m) and is working with owners to relaunch its iconic Holiday Inn brand to drive sales.
By Chris Druce
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