No plane no gain

10 August 2010 By Alexander Smith

Intercontinental Hotels reported a rebound in business travel, while TUI Travel struggled with more frugal holidaymakers. But economic uncertainty is clouding visibility for both. With limited scope to quickly adapt capacity, travel companies are set for a bumpy ride.

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Intercontinental Hotels, the world's biggest hotelier, reported on Aug. 10. that trading strengthened through the first half, driven by Asia and especially China.

Guests filled more of its 650,000plus worldwide rooms and started to pay more in July in signs of a growing recovery.

Package holiday group TUI Travel was hit first by a volcanic ash cloud closing European airspace and the prospect of public spending cuts in Britain which forced many Britons into rethinking their summer holiday plans.

Shares in TUI fell nearly 10 percent after it reported a 4 percent decline in thirdquarter revenue and said results for the fullyear would be at the low end of expectations.

Despite reporting betterthanexpected operating profit, Intercontinental shares fell nearly 5 percent.

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