Andrew Cosslett is a well-travelled man, even by FTSE 100 chief executive standards. The head of InterContinental Hotels Group recently arrived in London from Singapore by way of New York and is set to make further trips to the US, UK and Shanghai in the coming weeks. He is encouraged by the activity that he sees around him. “I have been on six overseas trips in the last eight weeks and the planes have been completely full and the airports are full,” he says during an interview at the group’s InterContinental Hotel on London’s Park Lane. “Over the last couple of months, we have seen a sharp return of the business travellers. We are not out of the woods yet but we are getting a lot of good signs of recovery in big markets. Every month seems to be improving.” Indeed, 2009 was a tough year for the hotel sector. Having found 2008 surprisingly normal, hotels saw occupancy rates tumble in the early months of 2009 as corporate spending was slashed and business travellers – who drive the high-margin premium end of the hotel business – vanished overnight. With businesses reining in travel plans or trading down to cheaper options, operators, even at the top end of the market, began slashing room rates, some by as much as 50 per cent. While lower prices have helped lure in leisure travellers, revenue per available room (revpar) at IHG’s luxury hotels was still down 22 per cent last year. Its mid-market chains – including Holiday Inns – saw revpar fall 15 per cent. Underlying profits at IHG, the world’s biggest hotelier by rooms, fell 31 per cent to $309m (£197m) last year. “The past year ... let’s just say it has been character forming,” says Mr Cosslett with a laugh. “This recession has been the worst that we’ve experienced.” If the luxury end of the hotel sector suffered the steepest drop in occupancy and rates, it is now also recovering the fastest, thanks to the return of business travellers, who traditionally make up about 60 per cent of IHG’s revenue. The view is being echoed by other large hoteliers such as Marriott and Starwood, both of which say they are seeing a pick-up in demand and more forward visibility in their bookings. Still, Mr Cosslett cautions that it will probably take another year before trading gets back to pre-crisis levels. “We need to see where the unemployment figures in America go to because that obviously drives a lot of confidence, and we need to make sure that China continues to be the engine of Asia,” he says. The Weekend FT