InterContinental Hotels Group, PLC reported Q4 and full-year 2024 results. Highlights include:
Trading and revenue
- Global RevPAR up 3 percent (Q4 up 4.6 percent), Americas up 2.5 percent (Q4 up 4.6 percent), EMEAA up 6.6 percent (Q4 up 6.9 percent), and Greater China down 4.8 percent (Q4 down 2.8 percent); U.S. RevPAR was up 1.7 percent, accelerating from .6 percent in the first half of 2024 to up 2.6 percent in the second half of 2024 (Q4 up 4.1 percent)
- Average daily rate up 2.1 percent, occupancy up 0.6 percentage points
- Total gross revenue1 $33.4 billion, up 6 percent
System size and pipeline
- Gross system growth up 6.2 percent; net system growth up 4.3 percent
- Opened 59,100 rooms (371 hotels), up 23 percent YOY; global estate of 987,000 rooms (6,629 hotels)
- Signed 106,200 rooms (714 hotels), up 34 percent YOY; new build signings up 3 percent YOY, conversions up 88 percent YOY; global pipeline of 325,000 rooms (2,210 hotels), up 10 percent YOY
- Opened 23.,600 rooms (147 hotels) in Q4, up 23 percent YOY and the second-largest ever quarter of openings
- Signed 30,000 rooms (201 hotels) in Q4, up 6 percent YOY, and also one of the largest quarters of signings
Margin and profit
- Fee margin 61.2 percent, up 1.9 percentage points, driven by strong trading together with new and growing ancillary fee streams
- Operating profit from reportable segments of $1,124 million, up 10.3 percent, includes a $16 million adverse currency impact
- IFRS operating profit of $1,041 million includes System Fund and reimbursable loss of $83 million (2023: $19 million profit) driven by the planned reduction of prior System Fund surplus noted in the first half of the year, and net $nil exceptional items (2023: $28 million exceptional profit)
- Adjusted EPS of 432.4, up 15.1√, includes adjusted interest expense of $165 million (2023: $131 million), an adjusted tax rate of 27 percent (2023: 28 percent) and a 4.6 reduction in the basic weighted average number of ordinary shares
Cash flow and net debt
- Net cash from operating activities of $724 million (2023: $893 million) and adjusted free cash flow of $655 million (2023: $837 million), with the decrease driven by the planned higher spend in the System Fund
- Net debt1 increase of $510 million reflects over $1 billion of shareholder returns through dividend payments and share buybacks; $3 million foreign exchange adverse impact on net debt
- Adjusted EBITDA of $1,189 million, up 9.5 percent; net debt:adjusted EBITDA ratio of 2.3x
Shareholder returns
- $800 million share buyback program completed and $259 million of ordinary dividends paid to shareholders in 2024
- Final dividend of 114.4 proposed, up 10 percent, resulting in a total dividend for the year of 167.6, up 10 percent
- New $900 million buyback program launched, which together with ordinary dividend payments is expected to return over $1.1 billion to shareholders in 2025
Strong delivery on our clear framework to drive value creation set out in February 2024
- Targeting compound growth in adjusted EPS of up 12-15 percent annually on average over the medium to long-term
- Strong progress made in 2024 on growing our brands, expanding key geographic markets, enhancing hotel owner returns through enterprise developments, driving ancillary fee streams, and returning surplus capital to shareholders
- Acquisition of Ruby, an urban lifestyle brand, for ~$116 million, further enhancing our portfolio and growth potential
Elie Maalouf, CEO, IHG Hotels & Resorts, said, “Thanks to the hard work and dedication of our teams around the world, 2024 was an excellent year of financial performance, strong growth, and important progress against a clear strategy that is unlocking the full potential of our business for all stakeholders. RevPAR growth accelerated in Q4, reflecting the breadth of our global footprint and improvements in all three regions. Together with strong system growth, notable margin expansion, and the benefit of returning surplus capital through buybacks, we’re pleased to report adjusted EPS growth for the year of 15 percent.
Strong demand globally from hotel owners and developers for our brands drove the opening of 371 hotels and an impressive 714 properties signed into our pipeline, equivalent to almost two a day. The 106,000 rooms signed were up 34 percent more than the previous year. Our global estate now stands at over 6,600 hotels, and momentum continued into 2025 with the recent celebration of our 800th opening in Greater China. Our global pipeline increased 10 percent to over 2,200 hotels, representing future system size growth of 33 percent.
We are delighted to announce the acquisition of the Ruby brand, which further enriches our portfolio with an exciting, distinct, and high-quality offer for both guests and owners in popular city destinations. This acquisition demonstrates our focus on building our presence in large, attractive industry segments and using our experience of integrating and growing brands and hotel portfolios. The urban micro space is a franchise-friendly model with attractive owner economics, and we see excellent opportunities to not only expand Ruby’s strong European base but also rapidly take this exciting brand to the Americas and across Asia, as we have successfully done with previous brand acquisitions.
We continue to strengthen our enterprise to position IHG as the first choice for guests and owners, further improving and growing our brands, driving loyalty contribution, rolling out new hotel technology, and increasing our ancillary fee streams. Our cash generation and strong balance sheet support further investment in growth, and we also continue to sustainably increase our ordinary dividend and the regular return of surplus capital through share buybacks. The Board is pleased to propose another 10 percent increase in the dividend, and the launch today of a new $900 million share buyback program. We enter 2025 with confidence in further capitalizing on our scale, leading positions, and the attractive long-term demand drivers for our markets, all of which support the ongoing successful delivery of our growth algorithm.”
