Higher business spending aids Intercontinental
DESPITE talk of a double-dip recession in the US, the noises coming from corporate America are increasingly positive. Take technology giant Intel, which recently said firms were beginning to ramp up their IT spend, despite nearly two years of hibernation. Now Intercontinental is hailing the return of the business traveller, leading to a dramatic recovery in Americas revenue per available room (revpar) for the third quarter?– the hotel industry’s preferred yardstick for performance.
Budget brands Holiday Inn (up 7.9 per cent) and Holiday Inn Express (up 6.8 per cent) also performed well, although this was largely due to a refurbishment. Revpar at unrefurbished Holiday Inns was up just 2.2 per cent while branches of Holiday Inn Express that didn’t get a makeover added 3.9 per cent.
Crucially, it was the hotelier’s upmarket brands that outperformed the rest of the group. Revpar at Intercontinental and Hotel Indigo-branded hotels was up 11.8 per cent. Neither of these brands was relaunched, suggesting that the improved figures are a result of higher business spending, and not a relaunch.
That’s good news for Intercontinental’s shares, which are now even more attractive. But it also suggests corporate America is on the mend – despite what the doomsayers think.