By Andy Sambidge
InterContinental Hotels Group warns that Middle East unrest, Japan quake to hit profit by up to $20m
UK-based InterContinental Hotels Group (IHG) has warned that it expects recent events in the Middle East, Japan and New Zealand to negatively impact estimated full-year operating profit by $15-20m.
It said it had seen "significant declines" in revenues in Bahrain, where it operates two properties, and Egypt, where it has 10 hotels.
In the Europe, Middle East and Africa region, IHG reported that revPAR (revenue per available room) had increased by an average of three percent.
Without the problems in Bahrain and Egypt, that figure would have been 4.2 percent, the hotel group added in its first quarter results announcement.
In other Middle East markets, revPAR continued to grow, including 7.5 percent in Saudi Arabia and 2.4 percent in the UAE.
Revenue increased to $95 million and operating profit rose to $23 million, attributed to good revPAR growth at both the owned and leased and franchised hotels.
However, managed operating profit declined $2 million as the impact of unrest in the Middle East offset good growth in fees across Europe, IHG said.
Overall, IHG reported global revPAR growth of 6.9 percent and a 23 percent increase in operating profit for the quarter.
Net profit was up 28 percent to $69 million thanks to a nine percent rise in revenue to $396 million.
Andrew Cosslett, chief executive of IHG, said: “We remain confident about the outlook for the rest of the year. Demand for our brands continues to strengthen with both guests and hotel owners.
"This is driving our performance and reinforcing our industry leading pipeline. We are well positioned to take advantage of the gathering rate momentum we now see around the world.”