Intercontinental Hotel Group (IHG) saw profits rise 13 per cent worldwide last year, but has warned of `tough` times ahead.
The Holiday Inn, Crowne Plaza and Intercontinental Park Lane owner made a profit of $535m in the year to December 31 2008.
However, the group said there was a `sharp deterioration` in fourth quarter trading with revenue per available room (RevPAR) dropping 6.5 per cent. And the situation worsened in January with RevPAR falling nearly 12 per cent across the Europe, Middle East and Africa zone.
IHG Chief executive Andrew Cosslett said good results in 2008 meant the group had exceeded its three year target to add up to 60,000 rooms to its estate and was committed to a $1bn programme to relaunch Holiday Inn.
However, he said the trading environment was `very tough` and said the decline which started in November was not expected to turn around.
He said: "It has been clear for some time that 2009 will be a challenging year and we have taken action to prepare the business, including strict management of cash and a significant reduction in costs. The actions we have taken to move the business to an asset light model with strong brands, scale advantage and leading technology and reservation systems position us well to grow market share in the testing times ahead.”
IHG opened 21 hotels in the UK in 2008, adding 2,460 new rooms and introduced a new brand - Hotel Indigo - to the market.