Shareholders may soon shift their attention from electric companies to hospitality-management firms for income considerations. Hoteliers have long mothered their profits to accommodate capital investment. Yet in a curious turn of tradition, InterContinental Hotels Group, the UK-based owner of the Crowne Plaza and Holiday Inn brands, declared a special dividend this week for investors based on profits from the last fiscal year. One interpretation is that the company is outflanking shareholder pressure amid industry uncertainty. Blame terrorism and the internet. Those pressures are provoking investors to rethink cyclical positions. But asset managers now pay generously for investments that deliver income. IHG shares traded at a record high following the dividend announcement. That message should resonate with those companies operating elsewhere in the hospitality industry. ■
Our Vantage Point: Given worldwide economic pressures, growth ideas no longer square with investors. Shareholder loyalty only reaches as far as the dividend payment.
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Image: Revenue per available room is a key hotel-industry metric. Credit: YakobchukOlena at Can Stock Photo.