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Last Updated: Tuesday, 22 August 2006, 09:53 GMT 10:53 UK
New strategy boosts hotels group
Reception in Holiday Inn hotel
Holiday Inn hotels are operated by Intercontinental
Intercontinental Hotels has seen a rise in operating profits as it continues with its strategy of concentrating on hotel management contracts.

Operating profits at continuing operations rose 30% to 107m ($202m) in the first half of 2006.

The Holiday Inn and Crowne Plaza operator has been selling its hotels in order to concentrate on franchises and management rather than full ownership.

The shift follows its split from the Six Continents Group in 2003.

It has since sold 175 hotels for 3bn, as well as return 2.74bn to investors.

Reporting its latest results, Intercontinental also promised to return more cash to shareholders after selling 24 of its European hotels.

'Positive' future

After including profits from discontinued operations, pre-tax profits for the half year fell to 151m from 166m a year ago.

Across the business, the group said trading had been excellent in the six months to 30 June, adding that its outlook for the year remained "positive".

InterContinental - which has more than 3,650 hotels in almost 100 countries - said it had increased the number of rooms it operates by nearly 3,500 in the first half to 541,002.

As a result of strong interest and good progress, the firm added it had also increased the number of rooms it plans to open in coming years by 21,588 to 130,000 - with 80% of these set to open before 2008.

"We continue to attract strong interest from owners and partners, both new and existing, and for the first time we now have over 1,000 hotels in the development pipeline across the world," chief executive Andrew Cosslett said.

He told reporters that the company thought there would be little impact following the recent security scare regarding flights from the UK, and that there had been no impact on business in the Middle East outside Lebanon and northern Israel.

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