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| Statement |
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| We had strong performance across all segments, but it was very pleasing to see our six Luxury & Lifestyle brands account for 23% of signings, further increasing this part of the portfolio in our pipeline mix |
| Accelerating system growth and fee income further, one in two Luxury & Lifestyle development deals now comprises a branded residences component |
| It was also a particularly strong year for the InterContinental brand, with eight openings including Jaipur, Bucharest, Durrat Al Riyadh and Rome |
| Signings were up 26% on last year, driven by one of IHG’s best ever quarterly signings performances in Q4 |
| Adjusted free cash flow reached a record high of $819 million in 2023, once again demonstrating the highly cash generative nature of our business model |
| Our Essentials and Suites brands had another strong year, and Luxury & Lifestyle is a rising proportion of our future growth |
| With year-on-year growth of 23%, our operating profit exceeded $1 billion for the first time, and helped drive earnings per share growth by an outstanding 33% |
| Our fee margin continued to expand, growing by 3.4 percentage points in the year and helping to drive operating profit to just over $1 billion, up 23% on 2022 |
| Earnings per share grew 33% year-on-year, and is 24% ahead of where earnings were back in 2019 |
| 2023 saw another record year of cash generation, with free cash flow totalling $819 million |
| It was also very pleasing to see an acceleration in the pace of openings for avid, with eight new properties added in the year, and a further 18 already under construction |
| Q3 RevPAR, which was strongly driven by domestic leisure trips, was up 43% versus 2022, an outstanding increase of 9.3% versus 2019 |
| Let me take you through some more detail of the strong financial performance that we delivered in 2023 |
| IHG has a well proven ability to successfully drive long-term growth in both demand and supply, with full year RevPAR growth of 16% and net system growth of 3.8% once again demonstrating this |
| Revenue from the fee business increased by 17% to $1.7 billion, while operating profit from the fee business increased by 23% to $992 million, or by 25% on an underlying basis |
| Fee margin once again made considerable progress, improving by 340 basis points to 59.3% -- and I’ll touch on this in more detail shortly |
| To summarise, we operate in a very attractive industry benefiting from long-term structural growth drivers of expanding GDP, growing populations, rising middle class and wealth, and people’s fundamental desire to travel and physically interact for both business and leisure |
| The resulting opportunity is for compound growth in earnings per share of 12% to 15% annually on average over the medium to long-term, driven by the combination of the above |
| We saw excellent progress in 2023, with key metrics for our trading performance, hotel openings and signings, profit and earnings all significantly ahead of last year |
| RevPAR improved significantly, up 16% versus 2022, and up 11% versus 2019 |
| As had become well known, trading in Greater China was bumpy in 2022, but in 2023 there was a sharp and sustained improvement and full recovery in RevPAR, with the year as a whole up 1% versus 2019 |
| Q3 RevPAR was particularly strong, up 9% versus 2019, driven by a better-than-anticipated uptick in domestic leisure trips |
| Occupancy improved year-on-year by 7.9 percentage points, while rate was up 9.8% |
| We expect to continue converting around 100% of earnings into free cash flow and that should enable routinely returning additional capital to shareholders, such as through annual share buyback programmes, which further enhances earnings growth |
| As I mentioned at the start of the presentation, we have seen further expansion of our fee margin, which, at 59.3%, increased 340 basis points ahead of 2022.This improvement was led by our EMEAA and Greater China regions, which saw margins increase significantly as trading performance continued to accelerate |
| Business demand continued to strengthen, both in terms of occupancy and pricing |
| This reinforces our future growth potential and clearly demonstrates the continued attractiveness of our brands and enterprise system |
| Conversions grew strongly, representing 39% of openings in the year |
| All of these additions combined to help us reach the milestone of 700 open hotels in Greater China, which is a fantastic achievement for our regional team |
| We continue to successfully capture conversion opportunities, which represented over 35% of both openings and signings |
| Statement |
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| industry that saw RevPAR in slight negative territory for midscale and upper midscale in Q4 |
| Q4 RevPAR dipped back down to a percentage point behind 2019 levels, but this was expected given the seasonally higher business demand in that quarter, which still lags leisure demand given the delayed return of international airlift capacity |
| The Americas region saw margins slightly dip, down 210 basis points to 82.2% |
| Trading in the first quarter of 2022 saw travel volumes impacted as a result of the Omicron variant of COVID-19, with comparatives becoming tougher from April onwards |
| Elsewhere, variances in performance largely reflected timing of recovery following the ease of travel restrictions, with fourth quarter year-on-year RevPAR in Australia up 7%, Continental Europe up 8%, South East Asia & Korea also up 8%, and Japan up 20%.RevPAR in the Middle East was down 1% in Q4 predominantly due to tough comps from the FIFA World Cup held a year prior, but was still up 24% on a versus 2019 basis |
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