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IHG: Terror Threats Have Little Impact on Hotel Sector

LONDON-Intercontinental Hotels Group shrugs off disruptions of terror alerts and war. Demand remains strong so the group presses ahead plans for a new hotel every day.

By Anita Howarth | Updated on August 23, 2006

LONDON-Travelers are sticking to their travel plans despite a Middle East war, a massive security operation in the UK, new restrictions on hand luggage and extra security checks across Europe, say officials at InterContinental Hotels Group. Chief executive Andrew Cosslett says demand at IHG, the world’s largest hotel operator, remained strong after the UK terror alert and instability in the Middle East this month. The group’s hotels around airports in London and New York had been filled to capacity because of the disruption to flights caused by tight security arrangements.

Revenue per available room rose 11.2% as a result of higher prices, with strong performance coming from the Middle East. But Cosslett does warn that slightly lower profits could be expected in the region in the wake of the conflict in Lebanon. All five of IHG’s Lebanese hotels remain open, one of which is completely full. Overall, “the region remains positive from a business point of view.”

“The traveling public has become somewhat desensitized to the constant threats and tends to stick to travel arrangements,” Cosslett notes. The gap between the public’s initial nervous response to a security situation and their return to the travel market is, he adds, getting “shorter and shorter.”

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