Intercontinental Hotels Group (NYSE:IHG) reported what management described as “excellent financial performance” for 2025, supported by modest global RevPAR growth, record hotel openings, accelerating system expansion, and significant fee margin improvement. In a full-year results presentation, CEO Elie Maalouf and CFO Michael Glover also outlined shareholder return plans, development momentum across brands and regions, and continued investment in technology and artificial intelligence to support growth and efficiency.
2025 performance and returns to shareholders
IHG said global RevPAR increased 1.5% in 2025, driven by gains in both rate and occupancy. The company opened a record 443 hotels during the year, taking its estate to more than 6,900 hotels and over 1 million rooms. Gross system growth was 6.6% and net system growth was 4.7% (the fourth consecutive year of accelerating growth, according to management).
Glover said reportable segment revenue was $2.5 billion and EBIT was $1.265 billion, up 7% and 13%, respectively. Fee business revenue and fee business operating profit also rose 7% and 13%, while fee margin expanded 360 basis points to 64.8%.
IHG completed a $900 million share buyback in 2025, repurchasing 7.6 million shares and reducing share count by 4.8%, Glover said. Alongside ordinary dividends, IHG returned more than $1.1 billion to shareholders, which management said was equivalent to 5.9% of market capitalization at the start of 2025. The company also announced a new $950 million share buyback to begin immediately and said that, together with “growing our ordinary dividend payments,” it expects to return over $1.2 billion to shareholders in 2026. The total dividend proposed for 2025 was up 10%.
RevPAR trends by region and demand segment
Glover detailed uneven regional performance during 2025. In the Americas, RevPAR grew 0.3% for the year, with a 0.5% increase in rate offset by a slight 0.1 percentage point decline in occupancy. He said quarterly trends softened after a strong first quarter, citing the timing shift of Easter and “the onset of reductions in certain types of business and leisure travel in light of macroeconomic developments,” followed by tough year-on-year comparisons in the fourth quarter due to hurricane-related demand in late 2024.
In EMEA, RevPAR rose 4.6% for the year, with occupancy up 1.6 percentage points and rate up 2.4%. Glover said fourth-quarter RevPAR accelerated to 7.1%, driven by broad growth across business, leisure, and groups. By major markets, he cited full-year RevPAR growth ranging from 1.1% in the U.K. to 4.2% in Continental Europe, 5.5% in East Asia and Pacific, and just under 9% in the Middle East.
In Greater China, RevPAR declined 1.6% for the year, as occupancy rose 0.5 percentage points but rate fell 2.4%. Glover said performance improved sequentially through the year, returning to growth of 1.1% in the fourth quarter with “notable improvement in leisure demand.”
By demand driver, the company said global rooms revenue for business bookings grew 2% on a comparable hotel basis, supported by room nights and rate. Groups revenue increased 1%, predominantly from rate, while leisure revenue was unchanged from 2024.
Development momentum and pipeline growth
IHG said it signed 102,000 rooms across almost 700 hotels in 2025, which was 9% ahead of 2024 levels when excluding the Ruby acquisition and Novum conversions. Glover said both new builds (up 8%) and conversions (up 10%) contributed, with a little over half of signings coming from new builds. The pipeline rose to nearly 2,300 hotels, representing 33% future rooms growth.
Openings included more than 65,000 rooms added to the system, up 10% year-over-year, with just over half of all openings coming via conversions. Glover said 26,000 rooms left the system, equivalent to a 1.9% removal rate after adjusting for The Venetian. He attributed the higher removals versus the typical 1.5% average to “higher removals in China” linked to lagged post-COVID exits and “natural lumpiness of exits elsewhere,” adding that it was not indicative of a longer-term trend.
Margin expansion, cost actions, and cash flow
Management attributed the 360 basis point improvement in fee margin to a combination of operating leverage and step-ups in ancillary fee streams. Glover said fee business overheads were $666 million, down $23 million (3%) from 2024, following process redesign, increased centralized support, and greater use of technology, including AI. The company recorded an exceptional fee business cost of $12 million related to the realignment, which Glover said delivered a cash-on-cash payback within 12 months.
On ancillary streams, Glover said 2025 included the second step-up from loyalty point sales flowing directly to IHG, adding a margin uplift equivalent to 50 basis points. He also said IHG achieved the expected incremental $40 million of co-brand credit card revenue in 2025, contributing an additional margin uplift equivalent to 80 basis points. He noted that the combined 130 basis points of margin improvement from ancillary step-ups, plus 230 basis points from operating leverage and cost actions, drove the total margin expansion.
Adjusted free cash flow was $893 million, up $238 million year-over-year, driven by higher EBITDA and lower outflows including cash tax and CapEx within free cash flow. Free cash conversion was 115% of adjusted earnings, which Glover said was above the roughly 100% average expected over the medium to long term. After $1.1 billion of returns to shareholders, net debt rose $551 million and leverage ended the year at 2.5x net debt to EBITDA, which management said brought IHG back into its target range.
Brand expansion, technology priorities, and 2026 outlook items
Maalouf highlighted portfolio expansion, including the acquisition of Ruby in 2025 and the launch of Noted Collection, described as a new premium collection brand designed for “high-quality, upscale to upper upscale hotels with their own unique identity,” initially focusing on EMEA. He said IHG expects Noted Collection to exceed 150 hotels over the next decade, while Ruby is expected to reach 120 hotels within 10 years.
He also discussed brand and regional development updates, including: Holiday Inn Express opening 95 hotels in 2025 and reaching 3,300 open properties; Garner entering six new countries in 2025; and suites brands delivering 50 openings and 90 signings, for more than 1,200 open and under-development suites hotels. Regionally, Maalouf said the company opened 156 hotels and signed 233 hotels in the U.S., and ended 2025 with 882 open hotels in Greater China and a pipeline of 582 hotels. In EMEA priority markets, he cited growth in Germany, Japan, Saudi Arabia, and India, including record signings in several of those markets.
On technology, Maalouf said 3,400 hotels adopted IHG’s new revenue management system in 2025, completing rollout across the eligible estate, and that the accelerated rollout of new property management system solutions reached 2,000 hotels, with an expectation to reach 4,000 by the end of 2026. He also described AI initiatives across guest acquisition, commercial optimization, and cost efficiency, including a content platform to support evolving search and AI agents, AI-powered trip planning capabilities in partnership with Google, and a new AI-enhanced CRM platform. IHG One Rewards membership rose to more than 160 million members, with loyalty penetration at approximately 66% of room nights booked globally and 73% in the U.S. and Americas, according to management.
For modeling considerations, Glover said interest expense is expected to rise to $230 million to $250 million in 2026, reflecting higher average net debt and a slightly higher blended cost of borrowing, while the adjusted tax rate is expected to remain 27%. He reiterated capital expenditure guidance, with key money and maintenance CapEx of $200 million to $250 million within gross CapEx of up to $350 million on average annually.
About Intercontinental Hotels Group (NYSE:IHG)
Intercontinental Hotels Group plc (IHG) is a multinational hospitality company that develops, owns, manages and franchises a broad portfolio of hotels and resorts. The company operates across full-service luxury and upscale segments as well as midscale and extended-stay categories, providing lodging, food and beverage, meeting and event services, and related guest amenities. IHG’s business model emphasizes brand franchising and management agreements, while retaining ownership or direct investments in a smaller portion of its global property portfolio.
IHG’s brand portfolio spans global and regional names designed to serve different traveler needs and market segments.
