Shares in InterContinental Hotels Group (LON:IHG) have fallen deep into the red in London this morning, as the Holiday Inn and Crowne Plaza owner reported lacklustre revenue growth in the third quarter of the year. The group’s plans to return $500 million to shareholders have also failed to cheer investors.
As of 09:55 BST, InterContinental’s share price had given up 7.16 percent to 3,915.00p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.07 percent lower at 7,021.91 points. The group’s shares have lost just under five percent of their value over the past year, as compared with about a 6.6-percent dip in the Footsie.
InterContinental posts results
InterContinental announced in a statement this morning that its global third-quarter revenue per available room (RevPAR) had grown one percent, boosted by strong performance in China, which saw 4.8 percent growth. In the Americas, RevPAR was flat, while Europe, Middle East, Asia & Africa grew by 2.5 percent.
“We delivered a good third quarter performance,” InterContinental’s chief executive Keith Barr commented in the statement. The FTSE 100 company further announced a $500m special dividend with share consolidation, to be paid early next year.
Analysts weigh in on update
“Revenue per available rooms is a little lower than hoped for, largely as a result of weak occupancy numbers in the US. With IHG rapidly expanding its rate of room growth, including some sizeable acquisitions and new brand launches, lower revenues are far from welcome,” Hargreaves Lansdown equity analyst Nicholas Hyett said of the results, as quoted by City A.M., adding that “having been behind the wider sector in terms of new openings earlier in the cycle, the worry is that IHG is playing catch up just as the market starts to cool”.