Slower US growth at Holiday Inn owner hits shares

InterContinental Hotels Group reported slower growth in revenue per room in the second quarter, sending its shares down 4%, as a late Easter weighed on its US performance.

Slower US growth at Holiday Inn owner hits shares

The operator of brands such as Crowne Plaza, InterContinental, and Holiday Inn, said that revenue per available room grew 1.5% in the three months to the end of June, down from 2.7% in the first quarter and 2.5% a year earlier.

The Easter holiday, when there are fewer business travellers, fell in the second quarter this year from the first quarter last year.

Chief financial officer Paul Edgecliffe-Johnson said US oil producing states continued to be a slight drag. Results also showed negative growth in the Middle East.

IHG stock, which has gained over 20%, fell by over 4% at one stage. Hoteliers last year saw attacks in Europe hurt demand, but Mr Edgecliffe-Johnson said IHG had seen no impact from attacks in London and France this year.

“In a way, our guests around the world have had to get used to the frequency of attacks and they have become very resilient,” he said.

Boosted by a strong first quarter, the group posted an 7% rise in six-month underlying operating profit to $365m (€309m) and said it remained confident in the 2017 outlook.

IHG has reduced its ownership of hotels to expand via a cheaper fee model, under which it franchises and manages hotels, and focused on business customers to head off the challenge from the likes of Airbnb. It is launching a midscale brand in the US.

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