InterContinental Hotels Group (IHG), which operates the Holiday Inn and Crowne Plaza chains, has reported a 38 per cent slump in operating profits for the six months ending 30 June 2009.

The company currently operates more than 4,300 hotels across the world after increasing its portfolio by a net 117 properties during the first half of the year, but it has been hit by a 16.2 per cent decline in global RevPAR during the period. IHG, which also reported a 25 per cent fall in revenue, has revealed that it plans to reduce costs by around US$80m (£48.5m, 56.6m euro) during the whole of 2009 compared with 2008 levels, while also opening a further 25,000 rooms during the second half of the year.

Andrew Cosslett, IHG chief executive, said: "Trading was very challenging throughout the first half of the year and we expect the remainder of 2009 to be tough. We have made good progress on improving efficiency and reducing costs as we make more effective use of our scale. "The outlook remains challenging, but we are confident that with our fee based business model, substantially reduced cost base, strong financial position and the renewal and refreshment of our brands supported by our system scale, we will outperform the competition and be well positioned for the upturn."