News

Booming IHG profits is positive news for hotel room investment
20/02/2012

Gemma Stephenson

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Last week Intercontinental Hotels (IHG) announced that it surpassed its forecasted 2011 profits, thrusting its current available hotel room investment into the spotlight for private investors looking to enter this income generating asset class.

“You can really call this a great British success story,” Richard Solomon, Chief Executive commented. “We are the largest hotel group in the world based in Britain but the UK accounts for just 5% of our revenues.”

Benefiting from rising tourist numbers due to this summer’s London Olympic Games and the Queen’s Diamond Jubilee celebrations, the company’s 50 London hotels have almost reached full capacity.

“We are now 80% booked for the Games. It’s not just London hotels and there has been a good knock-on effect to further out-of-town hotels. We are also managing the main athlete and official accommodation units in the Olympic Village, drafting in more than 100 of our best general managers from around the globe,” Solomon continued.

The world’s biggest hotel operator, which has launched a new The Holiday Inn Express, London-Excel hotel room investment, also revealed that its pre-tax profits rose by 34% to $532 million (£337.6 million) on revenues up by 9% to $1.8 billion for the full year. The dividend has been increased by 15% to 55 cents per share.

RevPar also saw a 6% increase while room rates have risen by 3.5% when compared to figures from the preceding year.

“In spite of the considerable uncertainty in the Eurozone, IHG is well positioned to globally benefit from positive, long-term industry trends, and, in particular, growing demand in emerging markets,” Solomon added.

Helping private investors to enter hotel room investment, Experience International has a number of units available in the new The Holiday Inn Express, London-Excel development. Offering yields higher than more traditional buy-to-let investments, the hotel offers a 9% assured income for year 1 with yields rising over time.

For more information about hotel room investment, please contact Experience International on 0207 321 5858 or email enquiries@experience-international.co.uk.