By Mike Elliott
LONDON (Reuters) - InterContinental Hotels Group Plc (IHG), the world's largest hotelier, reported a 22 percent rise in first-quarter profit and said it was well placed for further growth despite an economic downturn.
The Britain-based company, which operates InterContinental, Crowne Plaza and Holiday Inn hotels, said it had seen little impact from the credit crunch on its ability to sign new deals.
"Since the credit crunch began, and let's say that was the end of September, we've signed 418 deals around the world, and most of those were in the (United) States," Chief Executive Andrew Cosslett said on a conference call on Wednesday.
The company added 5,267 net new rooms in the first quarter, more than double the increase in the same period last year.
InterContinental has a 3-1/2 year target to open 50,000 to 60,000 net new rooms by the end of 2008. The total stood at 53,000 at the end of the first quarter.
"(We are) well on track to exceed the target," Cosslett said. "Our outlook for the rest of the year remains positive."
Underlying operating profit was 55 million pounds ($108 million) for the three months to March 31, up from 45 million last year. The average profit forecast of five analysts polled by Reuters was 53.9 million, in a range of 51.5-57.0 million.
The profit figure excluded 7 million pounds of liquidated damages as a result of one hotel leaving the pipeline. Cosslett said such events were "fairly routine" in the business and that it only highlighted it because the size was bigger than most.
Continuing revenue climbed 15 percent to 226 million pounds.
Shares in InterContinental were up 1.2 percent at 835.5 pence by 4:00 EDT (0800 GMT), valuing it at around 2.5 billion pounds.
Cazenove analysts said the results were in line and that they did not expect any change to forecasts.
Revenue per available room (RevPAR) grew by 3.5 percent in the quarter, which Cosslett said was solid given the adverse impact of an early Easter, a period when trading is weaker due to a drop-off in business travel.
Finance Director Richard Solomons told reporters that revPAR -- which had risen 7 percent in 2007 -- grew 6 percent in January and February before showing a small decline in March due to the timing of Easter.
"Once the Easter effect has gone through, you'll see us bounce back in April," Cosslett added.
The company said it had 590,361 rooms in 3,983 hotels with a development pipeline of more than 1,700 hotels giving it good visibility on future openings.
"Even in a less-certain economic environment, our broad market coverage, record pipeline, strong brands and resilient fee-based business model position us well for continued growth," Cosslett said in the results statement.
Solomons told reporters the strongest growth was seen in the Europe, Middle East and Africa regions where revPAR rose by 5.9 percent in the first quarter, driven by rate increases.
The United States, which accounts for around 70 percent of group profits, saw revPAR increase by 2.3 percent -- having grown by 4.6 percent in the first two months but falling 1.2 percent in March due to the timing of Easter.
In Asia-Pacific, revPAR increased by 5.1 percent.
(Editing by David Jones and David Hulmes)
