InterContinental Hotels blames early Easter for slowdown in the first quarter

Shares in InterContinental Hotels Group (IHG) declined early on Friday (6 May), after the hotel operator said the early timing of Easter had a negative impact on its first-quarter results.

In the first three months of the financial year, the FTSE 100 group reported its growth in revenue per available room (RevPAR) – a key gauge of performance in the hotel industry – fell to 1.5%, compared with 2.4% in the previous quarter and with a 4.4% pace for the whole of 2015.

IHG, the largest hotelier in the world by number of rooms, said Easter falling at the end of March negatively affected its business in Europe, North and South America. RevPAR in Europe fell from 3.6% in the final quarter of 2015 to 1.6% in the first three months of the current year, on the back of a 2.3% decline in France where hoteliers continue to struggle following the terrorist attacks in Paris in November.

RevPAR in the Americas grew 1.9% in the first quarter, compared with a 2.9% gain in the previous three months, while growth in the US market stood at 1.5%.

However, despite the cooling market, the owner Holiday Inn and Crowne Plaza brands remained confident of reversing the downward trend in the second quarter of 2016.

"We have made a good start to the year, driving RevPAR up 1.5% against the background of weak oil markets and the earlier timing of Easter, which affected several of our markets," said group chief executive Richard Solomons.

"Looking ahead, despite economic and political uncertainty in some markets, current trading trends and the momentum behind our brands give us confidence for the rest of the year."

The group added it had opened more than 5,000 rooms across 38 hotels in the first quarter, during a period which is traditionally the company's slowest quarter in terms of openings. IHG said its projection increased to 220,000 rooms, with 90% in the group's 10 priority markets and approximately 45% under construction.