Billion dollar windfall for Intercontinental investors

Intercontinental Hotels saw revenues rise in the first half of the year and said it would return one billion dollars to shareholders.

The funds will be returned to shareholders via a $500m special dividend, to be paid in the fourth quarter of 2012, and a $500m share buyback programme that will begin at the same time.

"Consistent with our asset light strategy and our strong track record of returning funds to shareholders, we today announce a $1bn return of capital," said Chief Executive Richard Solomons.

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"This recognises the expected proceeds from the ongoing disposal of InterContinental New York Barclay and our commitment to maintaining an investment grade credit rating," he added.

The hotel group, which has 666,873 hotel rooms across the world, reported revenues up 3% to $878m with earnings per share up 8% to 64c.

Pre-tax profits rose 60% to £178m and to make shareholders even more happy the company is increasing its interim dividend by 31% to 21c.

First half global RevPAR growth of 6.5% (rate up 3.5%) with second quarter up 6.1% (rate up 3.8%)

RevPAR is a key metric in the industry, which is calculated by multiplying a hotel's average daily room rate by its occupancy rate.

The firm saw first half RevPAR in the Americas up 7.1% (US 7.2%), Europe up 1.9%, AMEA up 7.9% and Greater China up 9.7%.

The company added that provisional July RevPAR saw growth of 3.8% overall, with the Americas seeing 5.0%, Europe dropping 0.2%, AMEA rising 1.7% and Greater China rising 7.1%.