Holiday Inn helps IHG to positive territory

By Leon Stafford

The Atlanta Journal-Constitution

The first half of 2010 has been good for the Americas operation of London-based InterContinental Hotels Group, operator of such brands as Holiday Inn, Crowne Plaza and Hotel Indigo.

In earnings released Tuesday, the company reported that revenue per available room or RevPAR -- an industry measurement of hotel health -- in the Americas was up 2.2 percent, compared to the same time last year. RevPAR increased 5.8 percent in the second quarter of 2010 compared to last year.

Some of the positive numbers were attributed to strong business at Holiday Inn and Holiday Inn Express, which outperformed their segments by 1.4 percent and 0.4 percent respectively, the company said. Holiday Inn has been undergoing a multi-year renovation to improve its brand image.

Also helping its improved performance was the return of business travelers, the company said. Operating revenue at franchised hotels was also up 6 percent on an 8 percent royalty fee revenue.

IHG's performance in the Americas is important because about 70 percent of the company’s hotels are in the U.S. and South America. The company also said Tuesday that its July 1 sale of the InterContinental Buckhead for $105 million was "in line with strategy to reduce capital intensity."

IHG's pre-tax profit for the first six months was $192 million, compared to a loss of $50 million over the same period the year before.

While the Americas earnings improved, Asia and Europe performed even better, suggesting a stronger international recovery for hotels.

"Asia is leading the recovery with Greater China reporting RevPAR up 29.4 percent in the half," said Andrew Cosslett, IHG's chief executive.