InterContinental Hotels Group Plc announced revenue per room that surpassed estimates and promised a special dividend payout after selling two assets.
Revenue per room available or revpar, which indicates occupancy and rates soared 6% from a year earlier. In comparison, a survey of nine analysts had projected a 4.8% average improvement. The Denham, England-based firm, which is the largest provider of hotel accommodation globally, said it will distribute $750 million to owners after disposing two US hotels in March.
“We have made an excellent start to the year with our strongest revpar performance in seven quarters. Current trading trends give us confidence for the rest of the year,†Chief Executive Officer Richard Solomons is quoted by Bloomberg as saying in a statement.
The firm, which operates the Holiday Inn and Crowne Plaza ventures, has been boosted by surging demand for hotel accommodation in the Americas, a market that accounts for almost 50% of its sales.
InterContinental raked in about $394 million in March after finalizing the sale of the Mark Hopkins San Francisco and 80% of its holdings in the New York Barclay.
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The company has been selling its assets over the past 10 years in order to pay attention to operating hotels and not holding stake. InterContinental’s Chief Financial Officer Paul Edgecliffe-Johnson announced in February that further property divestures were in the pipeline, following surging interests in hotel investments.
Its shares climbed 194p to £22.18 after announcing its intended dividend payout, according to Bloomberg. The hotel chain has paid its shareholders up to $10 billion since 2003.
Analyst Karl Burns said that they adjusted upwards the company’s forecast for per-share earnings by 5.5% for 2014 and 4.8% for 2015, based on the latest updates. The analyst believes InterContinental may dispose additional assets amounting to $1 billion and return proceeds to investors.
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To contact the reporter of this story; Yashu Gola at yashu@forexminute.com
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