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IHG Posts Flat-Lined Q3 Results in Europe

Terror attacks in France and Belgium, political instability in Turkey and Brexit have all contributed to lackluster results for the period from July to September.

InterContinental Hotels Group (IHG), the British multinational owner of the Crowne Plaza and Holiday Inn brands, says that terror attacks and Brexit have had a considerable impact on its European growth and profits.

According to its 2016 Third Quarter Trading Update, IHG’s revenues-per-available-room, an indicator of business performance in the hotel industry, increased by just 1.3 percent. For the period between April and June, the company reported a revenues-per-available-room growth of 2.5 percent.

This latter period was marked by multiple terror attacks in Europe as well as a foiled coup attempt in Turkey.

However, IHG believes that it is in a good position to weather the tough current market conditions and Richard Solomons, the multinational’s chief executive, said that, “Despite the uncertain environment in some markets, we remain confident in the outlook for the remainder of the year.”

Brexit may be on the horizon, but IHG has said that, as a major chunk of its business is based overseas, it will actually benefit from the dropping of the pound once Article 50 is formally triggered.

However, it did say that fluctuations in currency would have an impact on its reported profit for 2016. These stagnant figures for IHG’s European and Turkish operations take place against a backdrop of growth in Mexico and Canada.

Speaking of IHG’s future, Solomons admitted that while growth had slowed, “…the fundamentals for the sector, and particularly for IHG, remain compelling. This, combined with our winning strategy and the strength of our cash generative business model, will enable us to drive sustainable growth into the future.”

[Photo: IHG]

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