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Outlook remains tough - Cosslett
InterContinental Hotels Group (IHG) has today (Aug 11) reported a $50m pre-tax loss in the first half of the year.
IHG suffered a 121.6% decline on the $232m profit recorded in the first six months of 2008.
Global revenue per available room (revPAR) fell 16.2% year-on-year in H1 2009 with most of the decline seen in the second quarter.
Overall group revenues also fell 25% year-on-year to $726m from $974m the year before.
"As expected, trading in the first half of the year has been very challenging for the industry and we expect the remainder of 2009 to be tough," Andrew Cosslett, IHG's chief executive, said.
"Inside IHG we've made good progress on improving efficiency and reducing costs.
"We expect our 2010 overheads to come in at 20% down now on 2008 levels as we make much better use of our global scale."
IHG said it expected regional and central costs to be around $80m below last year's figure with a further $65-70m in sustainable savings by 2010.
Mr Cosslett added: "Some of these savings will be reinvested into the business to drive our revenues, build market share of make sure our brands keep on out-performing the competition."
IHG said it is on track to open 25,000 new rooms this year out of a total of 90,000 under construction.
Mr Cosslett said growth was expected despite finance "still being hard to find for developers."
He said: "We continue to sign new hotel deals at the rate of one a day and we continue too at a steady pace.
"We're actually on track to add more than 400 hotels to our system by the end of this year."
But IHG said around 35,000 existing rooms would be removed from its portfolio by the end of 2010 due in part to a quality improvement programme.
Mr Cosslett said: "So far this year we've removed 112 hotels that were not quite reaching the new quality standards that we've set.
"This removal programme combined with the $1bn re-launch of Holiday Inn is set to transform our largest brand.
"The general outlook does remain challenging, but we're confident that given the depth and talent of our management, our strong financial position and our global scale, we will continue to outperform the competition and be in a really good position when the upturn arrives."