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Intercontinental to sell off European properties
InterContinental Hotels Group, the world’s biggest hotel operator will put additional European hotels worth $ 1 billion on the market after yesterday confirming the sale of its Paris hotel for $385 million.
The group said it had sold 82 hotels during the first six months of the year, generating over $2 billion. Disposals included the UK portfolio of 68 Holiday Inns, four Crowne Plazas and one Holiday Inn Express.
While operating profits released yesterday are up 33% to $275 million in the first half of this year, sales of the European hotels are due to their weak performance.
The British-based group, which owns the Holiday Inn and Crowne Plaza hotel chains, reported that trading continues to be good in the US, UK and Asia.
The company said the future sell-off of European properties will leave it with $1.8 billion worth of assets in strategic cities such as London, New York and Hong Kong.
Finance director Richard Solomons, quoted in the Financial Times, said a sale would be made “when the time is right.”
“It’s about looking at hotel trading and the real estate market and when we see them coming together we will make a move,” he is reported to have said.
Meanwhile, the company said it was too early to say what financial impact Hurricane Katrina will have on the group. It has been forced to close 25 hotels in the Gulf Coast region but with 3,600 worldwide hotels, chief executive Andrew Cosslett said “there’s not going to be a massive impact.”
IHG intends to continue to dispose of its remaining hotels, except those hotels which play a strategic role in supporting a brand and can generate an appropriate return on investment.
Following the de-merger of its parent company Six Continents in 2003, IHG has sold 139 hotels, netting $4 billion.
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