InterContinental Hotels Group, with the largest presence in the Middle East of any hotel company, posted a sharp drop in profits.
Intercontinental Hotels posts sharp profit fall
InterContinental Hotels Group (IHG), with the largest presence in the Middle East of any hotel company, posted a sharp drop in profits for the first half of the year but said the region was relatively resilient. Operating profits for the company, based in the UK and best known for its Crowne Plaza and Holiday Inn brands, fell 38 per cent to US$179 million (Dh657.4m) this year from $291m in the same period last year.
The group described the Middle East as one of the most resilient markets, along with the UK. The Middle East operations had an 8.5 per cent decline in revenue per available room (REVPAR) in the first half, while the UK posted a fall of 10.7 per cent. The Europe, Middle East and Africa (EMEA) region suffered a 16.4 per cent fall in REVPAR in the first half. "Trading was very challenging throughout the first half of the year and we expect the remainder of 2009 to be tough," said Andrew Cosslett, the IHG chief executive.
IHG has 12 hotels in the UAE and is set to open a new Crowne Plaza, Staybridge Suites and a Holiday Inn in Abu Dhabi in the last quarter of this year. The group has 72 hotels in the Middle East. It has said there was a significant need for mid-range hotels in the region, particularly in Abu Dhabi where the market was maturing. "There is absolutely a demand in Abu Dhabi," Tom Rowntree, the IHG commercial vice president of Middle East and Africa, said last week.
"Tourism infrastructure starts with upscale properties and as the markets that are attracted to the destination mature, you then start seeing a broader diversity of brands opening up, and that's where we're now at with the Middle East region." Mr Rowntree said the InterContinental Phoenicia Beirut was the first upscale hotel to open in the region in 1961. According to the report, there was a 15.1 per cent decline in REVPAR for the EMEA region last month, compared with July last year.
Globally that fell by 16.2 per cent, with a second-quarter decline of 18.6 per cent. In its report, IHG said it "outperformed the industry in each of its three regions". firstname.lastname@example.org