InterContinental Hotels Group confident despite missing targets

InterContinental Hotels Group (IHG) has posted a 1.5% rise in first-quarter global room revenue, missing analysts’ estimates, but said it was confident for the rest of the year, citing current trading trends and brand momentum.

Shares in IHG fell as much as 2.5% in early trading, making the stock one of the initial top losers on Britain’s Ftse 100 index.

“I think RevPAR was a bit below our expectations of about 2% and we expect shares to be a touch weaker,” Berenberg analyst, Stuart Gordon, said.

IHG, which runs 5,000 hotels under brands such as Crowne Plaza, Holiday Inn, and InterContinental, said weak oil markets, and the earlier timing of Easter, affected several of its markets.

However, it added that despite both economic and political uncertainty in some markets, current trends and “the momentum behind our brands give us confidence for the rest of the year”.

The hotelier has a high concentration of rooms in oil-producing markets, where RevPAR — revenue-per-available-room, a key industry measure — was down 10.4%, compared to a 1.9% rise in the Americas.

Growth in Europe was driven by higher revenue in Germany and Russia, two of its priority markets, while RevPAR in France was down 2.3%, hurt by declines in Paris.

IHG added that, as announced in February, it would return $1.5bn to shareholders through a special dividend on May 23.