IHG Hotels & Resorts posts results to June 30, 2023

“In the first half of this year, we’ve seen very healthy demand across leisure, business and group travel around the world, with revenue per available room, a key industry metric, up 24 per cent year-on-year. During the same period, we celebrated the opening of 21,000 rooms, 40 per cent more than last year, across 108 hotels—and we signed a further 239 into our pipeline,” says the IHG Hotels & Resorts team.

KEY METRICS:

• $15.2bn total gross revenue +29 per cent vs 2022, +12 per cent vs 2019.

• +24 per cent global H1 RevPAR vs 2022, +8.7 per cent vs 2019.

• +17% global Q2 RevPAR vs 2022, +9.9 per cent vs 2019.

• Strong trading: H1 RevPAR up +24 per cent YOY; further sequential improvement vs 2019 with Q1 +6.8 per cent and Q2 +9.9 per cent.

• Americas H1 RevPAR up +11 per cent YOY, EMEAA +42 per cent and Greater China +94 per cent, reflecting the differing levels of travel restrictions that were still in place in H1 2022.

• Average daily rate up +7 per cent vs 2022, +11 per cent vs 2019; occupancy up +9 per cent pts vs 2022, just (1.3) per cent pts lower vs 2019.

• Gross system growth +6.3 per cent YOY; net system size growth of +4.8 per cent YOY.

• Opened 21.0k rooms (108 hotels) in H1, +40 per cent more than H1 2022; global estate now at 925k rooms (6,227 hotels).

• Signed 34.2k rooms (239 hotels) in H1, +11 per cent more than H1 2022; global pipeline now at 286k rooms (1,931 hotels), +2.9 per cent YOY; 17.7k rooms (131 hotels) in Q2, +7 per cent ahead of Q1 and +25 per cent more than Q2 2022.

• Fee margin of 58.8 per cent, up +3.3 per cent pts vs 2022 on trading recovery in EMEAA and Greater China.

• Operating profit from reportable segments of $479m, +27 per cent vs 2022; this included $5m adverse currency impact.

• Reported operating profit of $584m, including $87m of System Fund profit and an $18m exceptional profit.

• Net cash from operating activities of $315m (2022: $175m), with adjusted free cash flow of $277m (2022: $142m).

• Net debt increase of $419m since start of the year includes $372m share buybacks, $166m dividends and a $112m net foreign exchange adverse impact.

• Interim dividend 48.3¢, +10 per cent vs 2022; dividend payments in 2023 will return close to $250m to IHG’s shareholders.

• Trailing 12-month adjusted EBITDA of $996m, +23 per cent vs 2022; net debt:adjusted EBITDA ratio of 2.3x.

• Current $750m buyback programme 47 per cent complete; share buybacks together with ordinary dividends are on track to return approximately $1.0bn to shareholders in 2023.

• New midscale conversion brand launching, with strong interest from owners already expressed.