InterContinental Hotels Group PLC (LON:IHG) saw its share fall today as it revealed that its chief executive Richard Solomons will retire this summer, and as growth in a key industry metric slightly missed forecasts in the first quarter.
The FTSE 100-listed firm said Solomon, who joined the Holiday Inns group 25 years ago, will step down from his role on June 30 and retire from the company on August 30.
He will be replaced by Keith Barr, IHG’s chief commercial officer on July 1.
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IHG’s chairman Patrick Cescau said that Barr "has had a significant career in the hospitality industry and has the leadership skills and operational experience to take on the role of CEO.”
In a separate statement, IHG said it has made a good start to 2017, with revenue per available room up 2.7% in the first quarter, although that was slightly below Barclay Capital's forecast for 2.9% growth.
IHG said RevPAR benefited from the later timing of Easter this year, as well as increases in both room rates and occupancy.
Room rates were up 0.8% and occupancy was up 1.2% year-on-year.
The group’s outgoing CEO Solomons said: "Despite the uncertain economic and political environment in some markets, we remain confident in the outlook for 2017 and our ability to deliver sustainable growth into the future.”
In early morning trading, IHG shares shed 1.9%, or 78p at 4,101p.
"Solomons has a great track record of creating value for shareholders"
Steve Clayton, manager of Hargreaves Lansdown’s HL Select UK Shares fund, said: “Under any other circumstances, these results would have been taken better.
“But Mr Solomons has a great track record of creating value for shareholders and the stock had enjoyed a strong run in recent weeks.”
However, he added: “The underlying message is clear though; IHG continues to grow its estate, with a pipeline offering years of visible expansion that should feed through to steadily rising income, as long as the wider economy behaves itself.
“This visibility of growth is what attracts us to the stock, along with its structural bias toward the USA and China, both hugely attractive long term growth markets.”
-- Adds share price, fund manager comment --