IHG announces $1 billion in shareholder returns

Hotel News - 13/08/2012

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Hotel giant InterContinental is to return $1 billion (£637 million) to shareholders despite its current regulatory debacle.

The UK-based company said late last week that it was preparing a $500 million (£314 million) dividend scheme for the fourth quarter of 2012 and that at the end of the quarter it would launch a subsequent $500 million buyback effort. The firm said the move comes as a result of exceptional performance in China and the North American market.

The news comes despite the UK’s regulators recently saying that the agency was preparing to investigate the Holiday Inn and Crowne Plaza owner over price fixing allegations. Competition officials said in a statement released earlier this month that IHG was suspected of colluding with online travel giants Expedia.com and Booking.com in order to fix rates and squeeze out smaller, discount-oriented internet hotel retailers.

Recent figures from IHG revealed that the company saw pre-tax profits rise to $284 million (£181 million) during the six months leading up to 1 July, marking a 38 per cent year-on-year increase.

However the firm, which is the largest worldwide by number of rooms, also said that it saw revpar figures drop last month due to Ramadan and the US Independence day holidays landing midweek in 2012.

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