Earning Date, Transcript Summary & Report

RevPAR Growth Analysis: RevPAR grew by 3% for the year, driven by rate and occupancy gains with good performance across groups, leisure and business and a strong finish in Q4.

Room Inventory Expansion: Added 59,000 rooms to the system, taking total estate to 987,000 rooms across more than 6,600 hotels, with gross system growth of 6.2% and net system growth of 4.3%.

Hotel Room Signings Surge: Signed 106,000 rooms across 714 hotels, 34% ahead of 2023 levels, equivalent to almost 2 a day, taking the pipeline to more than 2,200 hotels.

Fee Margin Improvement: Fee margin grew 190 basis points, contributing to a 10% increase in operating profit from reportable segments.

EPS Growth and Buybacks: Adjusted EPS grew 15%, supported by the $800 million share buyback program, with a new $900 million share buyback program announced for 2025.

Brand Acquisition Expansion: Acquisition of the Ruby brand for $116 million, extending the portfolio into the premium urban lifestyle segment.

Revenue and EBIT Growth: Revenue was $2.3 billion, and EBIT was $1.124 billion, representing growth of 7% and 10%, respectively.

EMEAA Operating Profit Surge: Operating profit for the EMEAA region jumped 26% to $270 million, outstripping the 10% growth in revenue.

Operating Profit Increase: In Greater China, operating profit of $98 million was 2% up despite the challenging trading environment, with a record number of hotel openings.

Loyalty Program Expansion: IHG One Rewards grew to more than 145 million members, with enrollments up 13% year-over-year and loyalty penetration exceeding 60% of all room nights booked.

Earnings Miss Reported: InterContinental Hotels Group PLC missed earnings expectations with a reported EPS of $2.27, falling short of the expected $2.29.

Rising Interest Expenses: Interest expenses increased to $165 million, reflecting higher average net debt and a slightly increased blended interest rate, which could impact future profitability.

RevPAR Decline in Greater China: RevPAR in Greater China decreased by 4.8% for the year, with a significant drop of 10.3% in Q3, indicating challenges in that market.

Fee Margin Decline: The Americas region saw a decline in fee margin by 1 percentage point, suggesting increased costs or reduced profitability despite revenue growth.

Net System Growth Analysis: The net system growth of 4.3% was accompanied by a higher than average removals rate of 1.9%, indicating potential instability in the hotel portfolio.

Rising Interest Costs Impact: The company expects interest costs to rise to between $190 million and $205 million in 2025, which could further pressure earnings.

Cash Conversion Decline: Cash conversion was lower than typical at 94%, down from a record 132% in 2023, indicating potential cash flow challenges ahead.