InterContinental Hotels Chief Executive Andrew Cosslett says financing for new hotels in North America is tough but the world's largest hotelier still has the largest pipeline in the industry, especially in China.
The British owner of the InterContinental and Holiday Inn chains, which manages or franchises most of its hotels, says the owners of its hotels in North America are finding refinancing stretching and new hotels projects difficult to fund.
"Financing in North America is tough, many banks refuse to lend to the industry as they have their own priorities which often do not include hotel projects," he told Reuters in an interview after half-year results.
He puts this down to the more fragmented banking system in the US and Cosslett expects recovery to take longer for these generally more conservative banks. The hotelier earns around two-thirds of its profits in the US He says the group has around 17 percent of the world's pipeline of hotels compared to a market share of around 3.5 percent after signing up 130 hotels in its first half, more than its rivals, to bring its pipeline of new hotels to 1,302.
This strong pipeline, the relaunch of its 3,400 Holiday Inns due by the end 2010, and the expected easing of the financing situation puts Cosslett in a optimistic mood for 2012.
"We see modest system growth in terms of rooms over the next 2 years then we will be well set for 2012 and beyond as financing come back," he said. One area where financing is less of a problem is China where the hotelier is the biggest international operator with 130 hotels and 148 in the pipeline, and it is now the group's second biggest market in terms of rooms after the US.