|By Rupert Steiner, Daily Mail,
LondonMcClatchy-Tribune Regional News
Aug. 13, 2008 - It was a sprint to the finish for Holiday Inn owner InterContinental hotels as it raced to open seven hotels in Beijing in time for the Olympics.
The world's biggest hotel group said it was now hoping for gold from its new investments, as China sees a surge in visitors which is expected to continue beyond the huge event.
However, it is likely to miss its target of completing 125 hotels in China by the end of the year.
IHG's profits beat forecasts as the owner of Crowne Plaza and Staybridge Suites said it had so far managed to dodge the gathering economic downturn because its customer base has changed.
Out went the dollar-poor Americans from its upmarket InterContinental chain to make way for the oil-rich Arabs. It has also benefited from a change in the habits of cash strapped consumers who are taking more weekend breaks at its Holiday Inns in place of expensive two-week breaks.
The shares rallied 22p to 772 1/2p on the good news despite pre-tax profits falling £12.5m to £116m for the six months to 30 June because it sold a number of hotels. But operating profits were up almost 30pc to £142m.
Revenue per available room also grew, but at slower rate, rising 4pc compared with 7pc for the same period the previous year.
The company hit its three-year target of adding another 60,000 suites to its estate. But the the hotel giant is vulnerable to the unfolding economic crisis in the United States, with 70pc of its profit in America.
Chief executive Andy Cosslett said: "With gloomy newsflow out of the US you would expect to see revenue per room declining. While there is an overall softening in the market, we are still seeing growth.
"Over the last three years we have worked hard to strengthen the foundations of the business through investment. This is now helping us to outperform in times of economic uncertainty."
Analysts had been concerned that the credit crunch might stifle growth at the group which relies on property partners raising cash to buy hotel sites which it then leases to operate.
But Cosslett said the IHG's focus on medium-sized hotels means developers were able to secure loans from smaller banks less affected by the squeeze on debt.
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