InterContinental Hotels says an influx of business travellers had made the UK its hottest market in Europe.
The group said a revamp of menus for conferences and better services such as wireless points for internet connections had drawn a positive response from guests in the UK.
Revenues per available room were up 5.2 per cent during the first three months of the year at its Holiday Inn brand in the UK.
InterContinental Hotels has more than 3,500 hotels around the world, offering 535,000 guest rooms in nearly 100 countries. It also has a 47.5 per cent stake in soft drinks business Britvic.
In the UK, the group manages 200 hotels under the Holiday Inn, Crowne Plaza, Express by Holiday Inn and InterContinental brands.
It announced a 38 per cent jump in first-quarter profits, at the top end of forecasts.
The group reported hotel revenues up across all its global regions while it benefited from IFRS accounting changes on depreciation.
The company, valued at nearly £4 billion, posted pretax profit of £65 million for the first three months of 2005, after £47 million previously, while operating profits rose nearly 50 per cent to £76 million, towards the top of analyst forecasts.
This increase included a £15 million benefit from no depreciation being charged under new IFRS accounting standards on hotel assets held for sale, but even stripping out the effect of IFRS, operating profits would have risen nine per cent.
Morgan Stanley analyst Jamie Rollo said there were good results from hotels and Britvic soft drinks with strong growth in America and Asia and he was holding his 2005 pretax profit and earnings forecast at £286 million.
InterContinental, which has been selling hotels to become a franchised and managed hotel operator like rival US hotelier Marriott International, has so far offloaded 123 properties for £1.8 billion since the group's demerger from Six Continents in April 2003.
The group has 22 hotels still on the auction block with a book value of £420 million. These include ten in Australia, New Zealand and Fiji, four in the US and eight in Europe, including the InterContinental Paris, its second Inter-Continental in Paris, worth £200 million.
After this sell-off, the group will only own outright 52 hotels out of its 3,500-plus hotels around the world. It has said some of these 52 hotels, especially those in continental Europe, will eventually be put on the market.
It is handing back cash from the hotel sales to its shareholders, and is already nearly half way through returning a total amount of £2 billion via a special dividend and share buyback.