InterContinental Hotels Group (IHG) has revealed it expects trading conditions to remain challenging until the business market picks up after operating profits declined by a third during 2009.

Compared with the previous year, the hotel company saw operating profits fall from US$549m (£356m, €406m) to US$363m (£236m, €269m) but admitted it had seen signs of improvement during the fourth quarter. IHG, which operates the Crowne Plaza and Holiday Inn brands, revealed that it had made inroads into its net debt during the year, while a US$1bn (£649m, €740m) overhaul of the Holiday Inn business remains ongoing.

Andrew Cosslett, the company's chief executive said: "2009 was a very challenging year for the industry. The fourth quarter did show some improvement in trends and occupancy has now stabilised. "Rate however remains under pressure and we expect trading to stay tough until business travellers return in greater numbers."