InterContinental says annual net profit slumps 43%

AFP

Posted at Feb 17 2009 06:05 PM | Updated as of Feb 18 2009 02:05 AM

LONDON - InterContinental Hotels Group said on Tuesday that net profit tumbled 43 percent to $262 million (208 million euros) last year and forecast a bleak 2009 owing to the global economic slump.

"The trading environment is very tough," IHG's chief executive Andrew Cosslett said in the group's earnings statement.

"The sharp deterioration that we reported on last November has continued into 2009 and we see no signs of improvement at this stage."

IHG, the world's largest hotel operator by number of rooms, said that revenue per available room -- a key performance indicator for the industry -- fell 6.5 percent in the fourth quarter of 2008 compared with a rise of 1.6 percent in the third.

Trading worsened even further in January, with RevPAR down 12.2 percent, it said.

"It has been clear for some time that 2009 will be a challenging year and we have taken action to prepare the business, including strict management of cash and a significant reduction in costs," said Cosslett.

Net profit meanwhile dropped to $262 million in 2008 from $463 million in 2007 owing to one-off charges including costs linked to the relaunch of IHG's Holiday Inn brand.