InterContinental Hotels gloomy on year ahead

By Rhys Jones

LONDON (Reuters) - InterContinental Hotels (IHG.L), the world''s largest hotelier, said a marked fourth-quarter slowdown had continued into 2009 and demand was still easing, as it met forecasts with a 13 percent rise in 2008 profit.

The operator of InterContinental, Crowne Plaza and Holiday Inn hotel brands, said underlying revenue per available room (RevPAR), a key industry measure, fell 6.5 percent in the fourth quarter of 2008 and slid 12.2 percent in January, led by a steep decline in demand in the Asia Pacific region.

"The trading environment is very tough. The sharp deterioration that we reported on last November has continued into 2009 and we see no signs of improvement at this stage," chief executive Andrew Cosslett said in a statement on Tuesday.

The company met 2008 forecasts as continuing operating profit rose 13 percent to $535 million on continuing revenue 5 percent higher at $1.85 billion, as global RevPAR grew 0.9 percent.

The hotelier, which operates 4,100 worldwide hotels with more than 600,000 rooms, maintained the final dividend at 29.2 cents.

InterContinental said it had added 82,000 rooms to its portfolio by the end of 2008, beating a three-year growth target to add 60,000 rooms by the year-end.

A $1 billion relaunch of its Holiday Inn brand is progressing as planned, with 350 hotels operating under the new standards. Some 220 further conversions should be completed by the end of March, it said.

The company, which refinanced $2.1 billion of long-term debt facilities in May, said it hoped to keep 2009 costs $30 million below 2008 levels as part of a cost-cutting drive.

InterContinental shares, which have lost 15 percent of their value so far this year, closed at 475 pence on Monday valuing the group at around $2 billion. They were flat in early trading.

(Editing by Dan Lalor)