Shares in InterContinental Hotels Group fell by more than 4 per cent after the hotel group opted for further investment rather than returning cash immediately to investors.

　　Shares in InterContinental Hotels Group fell by more than 4 per cent after the hotel group opted for further investment rather than returning cash immediately to investors.

　　The share price fall came after InterContinental Hotels Group, which operates the Holiday Inn brand among others, underwent its biggest expansion in five years in 2013, with the London listed group banking on China for future growth.

　　IHG opened 237 hotels and added a further 444 hotels to its “pipeline” during 2013 – its biggest expansion since 2008 – as the group attempted to bulk up its market share.

　　The London-listed hotel group has about 5 per cent of the world’s hotel rooms, but more than 10 per cent of the hotel industry’s pipeline of new hotel rooms. China accounts for about a third of IHG’s planned expansion.

　　Richard Solomons, chief executive of IHG, said: “We have invested heavily in China.”

　　China lagged behind other markets as global revenue per available room (Revpar) rose 3.8 per cent globally for the year to December 31, with Europe and North America proving more resilient, despite a mixed macroeconomic backdrop.

　　China, in which IHG has operated for 30 years, was sluggish as government austerity weighed on the group, with Revpar growth of 1 per cent.

　　Mr Solomons said that any short-term weakness in China would be offset by longer-term gains. “You are worried about austerity etc, but you have to make long-term bets,” he said.

　　"In 2005 we had 43 hotels in China. We have gone from 43 to 200-and-something, with another 200 in the pipeline.”

　　The FTSE 100 group has been a cash machine for investors, returning almost $10bn to shareholders in its decade as a standalone company. But investors looking for further returns were left disappointed on Tuesday.

　　Analysts brushed off the absence of immediate cash returns, with Deutsche Bank highlighting a potential $2bn of cash that could be returned if IHG sells its flagship hotels in Hong Kong and Paris.

　　"We will continue to generate cash and recycle it,” Mr Solomons said. “If we can invest it, we will.”

　　IHG continued its policy of selling off the properties it still owns outright as it shifts to a hotel management model. IHG sold its Mark Hopkins San Francisco hotel to private equity groups Woodridge Capital Partners and funds managed by Oaktree Capital Management for $120m in cash.

　　IHG reported a 10 per cent jump in pre-tax profits, which rose to £600m for the year.