Bonanza payout for investors as hotels group faces probe

Intercontinental Hotels Group (IHG), which along with two online travel agents is under investigation for potential unlawful practices, said operating profits rose 7 per cent to $286m (£183.2m) in the six months to June 30 as it benefited from strong growth in China.

Its hotels in central London have seen a slight boost from the Olympics in recent days, while its Holiday Inn brand is expected to benefit globally from the kudos of sponsoring the event.

IHG has 12 hotels in Yorkshire, including five in Leeds.

IHG will start returning £640.7m to shareholders later this year, reflecting its “good” half-year results and confidence that it will conclude the sale of its InterContinental New York Barclay hotel, sending shares 7 per cent higher. The group added that a hotel in London’s Park Lane – formerly the site of a royal residence – was likely to be next to be sold as it looks to offload assets but it will not make a decision until after a new hotel in Westminster opens to guests next year.

The strong performance came shortly after the Office of Fair Trading revealed provisional findings that IHG has been involved in a potentially unlawful deal with Booking.com and Expedia to limit discounts on rooms.

Asked about the matter yesterday, IHG said that it believes it is in compliance with the law.

Meanwhile, bookings across its 51 London hotels have seen 80 per cent occupancy over the Games, which is about normal for the time of year.

IHG’s half-year results were boosted by a strong performance in China.

Total revenues rose 5 per cent to $878m.