Shares in InterContinental Hotels were down on the FTSE 100 in morning trading despite the group reporting a rise in revenue and operating profit in the full year ended 31 December 2010.

Revenue increased six per cent to $1.6 billion in the period, while operating profit rose 22 per cent to $444 million.

The group said that it had cut its net debt from $1.1 billion to $743 million and that it would be raising its total dividend by 16 per cent to 48 cents per share.

Continuing political unrest in Egypt is expected to cost the group around three million dollars, the group added.

Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC, said, "2010 was an excellent year for IHG. After a slow start to the year, the industry staged the sharpest recovery in its history, exceeding all expectations. By focusing on our brands and using our scale, we delivered 6% growth in revenue per available room (RevPAR). We signed more rooms into our pipeline than in 2009 and despite the planned exceptional number of removals to drive up quality, we grew the number of rooms in our system, led by a 12% increase in China.

"The $1bn Holiday Inn relaunch is almost complete, delivering RevPAR outperformance and improved guest satisfaction. We are now working with our hotel owners to refresh Crowne Plaza, already the fourth largest upscale hotel brand in the world, and one with great future potential."

Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers, commented, "The hotelier is today helping to fuel optimism in the global economic recovery. Its results have come in at the high end of analyst expectations, buoyed by a bounce back in business travel, strong Asian demand and a revamp of the group's Holiday Inn outlets. China remains a point of strength, with Germany and a reduction in the sales tax providing a highlight in Europe."

"On the downside, Egypt has been impacted, Southern Europe continues to prove challenging, whilst the group's core US marketplace is only just beginning to face up to the prospect of required government spending cuts."

"In all, with the group's key corporate customers having already cut costs, the company remains a beneficiary of the rebound in economic confidence. Exposure to developing markets is playing its part, whilst the credit crisis itself has impacted the supply of hotels, a factor now leaving the company in something of a 'sweet spot'. With management confidence for the outlook expressed via a 16pc increase in the dividend payment, market consensus opinion currently denotes a buy."

By 10:55 shares in InterContinental Hotels were down 4.40 per cent on the FTSE 100 to 1,325.00 pence per share.

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