InterContinental Puts Another $2B Tranche Up for Sale

LONDON-InterContinental has put another 76 hotels up for sale with a total price tag of about euro 1.3 billion ($2.3 billion). Most of the hotels form part of the UK-based Holiday Inns brand but also include the InterContinental Paris. The group plans to retain its flagship Holiday Inn at Hyde Park but will sell the hotels in Mayfair and Kensington.

Receipts from the sale will help fund the return of euro 1 billion ($1.3 billion) to investors, euro 731 million ($892 million) of which will be paid as a special dividend in December. Today’s announcement brings the total value of hotels sold or being marketed by the company to more than euro 3.2 billion ($3.9 billion).

The group also revealed profits had soared by 55.4% in the first half after its recovery continued in the UK, the US and Asia Pacific. The rise in profits to euro 209.3 million ($255 million) in the six months to June 30 included a 50.7% hike in operating profits at the hotels division. InterContinental has been recovering from the impact of the Iraq war, which led to some of the worst conditions ever seen in the industry.

Today it said current trading remained strong in the UK, where it is gaining significant market share, as well as the US and Hong Kong. “This is a strong set of results reflecting improvements in operating performance coupled with recovery in key markets such as the US, UK and Hong Kong,” says chief executive Richard North. But he warned that western Europe, particularly Paris, remained a challenge.

InterContinental owns, manages, leases or franchises more than 3,500 hotels under the InterContinental, Holiday Inn and Crowne Plaza brands in almost 100 countries. Since a demerger separated it from leisure conglomerate SixContinents last year, the London-based group has been selling off properties in a bid to concentrate on management and franchises. But North also says other hotels could also be put up for sale in the “long term.” InterContinental may continue to manage or franchise the hotels put up for sale today, as it has done with the majority of other sales.