LONDON (ShareCast) - InterContinental Hotels (Other OTC: ICHGF - news) said revenue per available room (RevPAR) slipped during its financial year but strong growth and cost cuts helped produce a double-digit increase in profits.
The Holiday Inns and Crowne Plaza hotels owner said RevPAR fell to 5.2% for the year to December 31st 2012 from 6.2% a year earlier.
Operating profit for the period increased 10% to $614m while pre-tax profit advanced to $556m from $532m. Revenue was up 4% at $1.84bn after a strong performance in the US and as it expands into developing markets.
Fee revenue growth climbed to 6.8% from 5.7% before while net rooms growth increased to 2.7% from 1.7%.
Chief Executive Richard Solomons commented: "2012 was another year of significant progress for IHG with our preferred brands driving RevPAR up 5.2%, led by the US up 6.3%."
"Together with 2.7% net rooms growth, which is fuelled increasingly by our expansion in developing markets, this drove up fee revenues by an impressive 6.8%. This growing scale allowed us to reinvest in the business while achieving better than anticipated margin progression," he added.
The hotel operator said it was positioned for a good performance in 2013.
The dividend has been increased 16% to 64 cents.
"IHG's proven strategy and resilient business model position us for further good performance in 2013, despite the challenging economic environment. The 16% increase in our dividend demonstrates the confidence we have in our ability to deliver sustained high quality growth," Solomons said.