Hotel companies end 2013 on a high note
The hotel industry ended 2013 on an upswing as occupancy and average daily room rates rose with the improving economy, earnings statements for some of the top hotel companies show.
InterContinental Hotels Group, the world’s largest hotel company by number of rooms, on Tuesday reported a 10% increase in profit for 2013. Operating profit before exceptional items and taxes jumped to $668 million from $605 million the year before.
Profit after tax, or net income, fell to $372 million from $537 million the year before. But revenue rose 4% to $1.9 billion.
IHG, parent company of Crowne Plaza and Holiday Inn, also announced it was selling the InterContinental Mark Hopkins in San Francisco for $120 million. Last year, it sold the InterContinental London Park Lane and its 80% stake in the InterContinental New York Barclay.
“I think the travel industry has some tailwind continuing,” says IHG President for the Americas Kirk Kinsell. “When you think about what’s happening in our business ? consumer confidence is good and solid. People are seeing the underlying value of their homes increase. The equity markets continue to be fairly robust, and people are feeling good about their nest eggs.”
The major hotel chains say there is stronger demand for rooms across the USA from both leisure and business travelers.
IHG, for instance, reported that revenue per available room, a key indicator of market health, was up 3.8% last year, thanks to higher occupancy levels and daily rates.
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