InterContinental Hotels Group (IHG), the owner of brands like Holiday Inn, Crowne Plaza, and Regent, has achieved a historic milestone with full-year earnings surpassing one billion US dollars (£794 million) for the first time in its history. This achievement is attributed to the resurgence in travel demand, leading to a substantial increase in revenues.
With underlying operating profits reaching 1.02 billion US dollars (£810 million) in 2023, up 23% from the previous year, IHG is set to reward its shareholders generously. The company plans to return over one billion US dollars (£794 million) to shareholders through dividends and share buybacks this year following the impressive profits.
Pre-tax profits more than doubled to 1.01 billion US dollars (£802 million) compared to 540 million US dollars (£429 million) in 2022, reflecting the robust financial performance of IHG. Additionally, the company announced an 800 million US dollar (£635 million) share buyback program and increased its final dividend by 10%.
IHG’s strong financial results are further evidenced by a 16.1% increase in revenue per available room, a key performance metric for hotel companies, over the year. Global revenue per available room also surged by 10.9% compared to 2019 levels, signaling a significant rebound in travel demand post-pandemic.
Elie Maalouf, IHG’s newly appointed chief executive, expressed optimism about the future, citing strong travel demand across all markets. He outlined the company’s strategy to target high single-digit growth in fee revenue by focusing on increasing revenue per room and expanding the number of hotels annually.
In 2023, IHG opened 275 hotels and has 556 more signed up in the pipeline, reflecting its commitment to expansion and development. The final quarter of 2023 witnessed a 27% year-on-year increase in hotel openings and a 50% rise in new signings, showcasing robust development activity for IHG.
Overall, IHG’s record-breaking earnings and ambitious growth plans underscore its resilience and optimism in navigating the evolving landscape of the travel industry.