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Intercontinental Hotels Group (IHG) has reported better-than-expected profits for the final three months of 2016.
The hotel giant – which owns brands including Crowne Plaza and Holiday Inn – saw operating profit jump 9.5 per cent to $702 million, with the company also announcing a $400 million return to shareholders.
IHG said revenue per available room (RevPAR), a key industry measure, grew 1.7 per cent year-on-year in the three months to the end of the year.
RevPAR was helped by higher room rates and record occupancy levels, while profit was boosted by higher returns from its fee business, where the company franchises and manages hotels, rather than owning them.
Richard Solomons, chief executive, IHG, said: “Our results clearly demonstrate our strong operational performance and the success of IHG's long-term strategy, which have delivered a 9.5 per cent increase in underlying profit and a 23 per cent increase in underlying EPS.
“Our cash generative business model underpins our decision to announce a $400 million special dividend and to propose an 11 per cent increase in the total dividend for the year.”
IHG said profits were helped by its digital strategy with digital revenue up $4.3 billion and mobile delivering 50 per cent of digital traffic and $1.6 billion of gross revenues globally.
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