IHG Profits Take Third-Quarter Nosedive, but CEO Remains Upbeat

InterContinental Hotels Group reported a 61 percent drop in third quarter profits as costs rose and the company bought 2.4 million shares of stock. Net income for the three months ended September 30 fell from $341 million last year to $131 million this year.

But the British company that owns the Holiday Inn and Crowne Plaza brands, among others, said it had seen no impact from the American credit crisis and was on course to exceed its target of between 50,000 and 60,000 new hotel rooms by the end of 2008. The company said sales climbed 14 percent to $467 million in the third quarter.

“IHG has had a good third quarter with strong performances across all our brands and the continuation of a record singings pace, which is seeing us sign two new hotels a day and keeping us on track to beat our net room additions targets,” CEO Andrew Cosslett said in announcing the results.

Revenue per available room rose 6.1 percent globally for the quarter and 5.6 percent in North America. The Middle East had the strongest growth, at 18 percent. Costs were up to $35.4 million, compared with $4.2 million last year; the company spent $48 million during the period to buy back stock.