The owner of commercial property Crowne Plaza and Holiday Inn has said 80 per cent of hotel rooms allocated for the upcoming 2012 Olympics are already booked.
Intercontinental Hotels Group (IHG), the world’s largest commercial property hotel operator has given 65 per cent of the space in 35 London commercial properties to the organising committee of the Olympics, after its Holiday Inn brand was named as the official commercial property hotel provider for the event.
The update came as IHG reported that its UK profits per available room, a preferred industry measures, fell 0.7 per cent in the last three months of last year.
Nevertheless, the FTSE 100-listed company said its revenues increased 9.0 per cent to £1.1 billion and operating profits were up 26 per cent to £355 million for the year to December 31.
Chief Executive Richard Solomons said: “You can really call this is a great British success story. We are the largest hotel group in the world based in Britain but the UK accounts for just 5 per cent of our revenues.”
Solomons is enthusiastic about the Queen’s Diamond Jubilee and the 2012 Olympics effect on his British commercial property hotels this year, with two new Holiday Inn and Staybridge hotels opening at Stratford and Intercontinental Hotels Group offering more than 50 London commercial property hotels.
IHG will also be providing space in up to 39 UK locations for the Olympic torch relay.
Meanwhile London’s Intercontinental Park Lane commercial property hotel remained one of the star players last year, with profits per available room up by 7.3 per cent in 2011 against growth across the whole group of 6.2 per cent. However the US and China remain the drivers with profits per available room increasing by 7.5 per cent and 10.7 per cent respectively.
IHG plans to introduce two new brands of hotel this year, one for each of those regions. Solomons is keeping it close to his chest which position in the market these will take, even though it seems probable the US brand will be mass market and the Chinese upmarket.
He hopes they can replicate the growth of the group’s boutique hotels label, Hotel Indigo, which has gone from zero to 100 planned commercial property hotels in seven years.
Last year the commercial property hotel firm said its plans to add 28 hotels to its UK total of 269, generating up to 3,000 jobs. The only main weak points during 2011 were Bahrain and Egypt which were hit by revolutions, and Japan, where the economy was still recovering from the tsunami.
Pre-tax profits increased by 34 per cent to £337.6 million on profits up by 9.0 per cent to $1.8 billion for the full year. The dividend has been increased by 15 per cent to 55 cents a share.
In January, profits per available room rose by 6.0 per cent whereas room rates are 3.5 per cent ahead of a year ago. Solomons added: “In spite of the considerable uncertainty in the Eurozone, IHG is well positioned to globally benefit from positive, long-term industry trends, and, in particular, growing demand in emerging markets.”
Shares at IHG were marginally down after it issued its results.
Equity analyst at Hargreaves Lansdown Stockbrokers, Keith Bowman, said: “Profits have again exceeded forecasts, buoyed by a bounce back in business travel, on-going growth and expansion in China and a revamp of the group’s Holiday Inn outlets.”
He further added: “The London Olympics is expected to further support the group’s geographical footprint as the UK is its biggest European market.”
