The InterContinental Hotels Group (IHG) is using the sale of two of its major US hotels as fuel for a $750-million dividend, which it will return to its shareholders.
According to the International Business Times, IHG may be considering the disposal of more hotels in the future due to the high demand for prime hotels. IHG's most recent dividend payout raises the total funds the company has returned to shareholders to $10.3 billion since 2003, including $1.6 billion in ordinary dividends.
The properties that IHG shed include the InterContinental Mark Hopkins San Francisco, and an 80 percent interest in the InterContinental New York Barclay, raking in a total of $394 million, Reuters reported. In return for the sales, IHG picked up long-term management contracts at the hotels.
IFA Magazine reported that IHG posted its strongest revenue per available room performance in seven quarters. The company's first-quarter RevPAR grew by 6 percent, which was bolstered by higher occupancy numbers and a 6.6 percent growth in its core North American market. During the first quarter of this year the group opened 9,000 rooms, and signed another 13,000.
The improving global economy has also helped. RevPAR in Europe was up 6.1 percent in Q1 2014, supported by double-digit growth in Britain. A 3.9 percent increase was also seen in China, where IHG has nearly one third of its expansion pipeline on its way up.