Home Business NewsBusiness InterContinental returns to first half profit

InterContinental returns to first half profit

by LLB Editor
10th Aug 21 10:10 am

The owner of the Holiday Inn and Crowne Plaza chains, InterContinental Hotels is looking to move up in the world.

InterContinental’s plans to launch a new luxury brand coming out of the pandemic suggest it reckons regular foreign travel might be dominated by wealthier holidaymakers in the future amid the extra costs and complexity of jetting overseas.

“InterContinental’s model should in theory leave it well positioned to rebound as the economy recovers, given it does not have lots of capital tied up in owning hotels. Instead operating an asset-light model with most of its premises managed on a franchise basis,” said AJ Bell’s Danni Hewson.

“With many independent hoteliers facing severe Covid-related pressures InterContinental has been able to sign them up to its brands.

“However, InterContinental’s franchise model does arguably give it less control over the pace of growth with its hotel estate expanding much more slowly than that of rivals like Marriott and Hilton in the first half of the year.

“The company’s material footprint in the US and China could be a risk in the second half of the year as the Delta variant which has already swept through Europe begins to affect these markets.

“InterContinental’s Chinese business in particular had started to look like it had emerge from crisis mode in the first half with revenue per available room down relatively modestly on 2019 levels. A reversal here could be damaging to the company.”

 

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