InterContinental Hotels (IHG) Shares Open Higher on Strong 2025 Results and Shareholder Returns

Shares of InterContinental Hotels Group (LON: IHG) opened higher on Tuesday before pulling back following the release of its full-year results for 2025, showcasing strong financial performance and shareholder returns. Markets reacted positively to the report, signaling confidence in the company's growth trajectory.

IHG reported a robust increase in operating profit from reportable segments, up 13% to $1,265 million, and an adjusted earnings per share (EPS) increase of 16% to 501.3¢. These figures underscore the company's operational efficiency and profitability.

Revenue from reportable segments increased by 7% to $2,468 million, with revenue from the fee business also growing by 7% to $1,897 million. The company's fee margin saw a significant improvement, rising 3.6 percentage points to 64.8%, driven by positive operating leverage and increased ancillary fee streams.

The company's global RevPAR (revenue per available room) increased by 1.5%, with varying performance across regions: Americas up 0.3%, EMEAA (Europe, Middle East, Africa, and Asia) up 4.6%, and Greater China down 1.6%. Total gross revenue reached $35.2 billion, a 5% increase.

IHG's system size expanded with gross system growth of 6.6% and net system growth of 4.7%. The company opened a record 443 hotels, adding 65.1k rooms to its portfolio. Signings also increased by 9% year-over-year, excluding the Ruby acquisition in 2025 and NOVUM signings in 2024.

The company demonstrated commitment to shareholder returns, distributing over $1.1 billion through dividend payments and share buybacks. A new $950 million buyback program has been launched, expected to return over $1.2 billion to shareholders in 2026, contributing to cumulative returns exceeding $5 billion over five years.

Net debt increased by $551 million to $3,333 million, influenced by shareholder returns, acquisition spending, and foreign exchange impacts. Adjusted EBITDA stood at $1,332 million, a 12% year-over-year increase, resulting in a net debt to adjusted EBITDA ratio of 2.5x.

Elie Maalouf, Chief Executive Officer, IHG Hotels & Resorts, stated, “Thanks to the hard work of our teams we delivered excellent financial performance in 2025 and in the face of some turbulent trading conditions…Collectively, this powered adjusted EPS growth of +16%.”

Driver Breakdown:

• Brand Growth: Accelerated expansion of brands, including the launch of the new Noted Collection and the acquisition of Ruby.
• Market Expansion: Strategic growth in key geographic markets, evidenced by record hotel openings and signings in Greater China.
• Technology & Platform: Investments in technology and enterprise platforms to enhance guest experiences and drive loyalty.

The outlook for the global travel industry remains positive, with the World Travel and Tourism Council (WTTC) projecting significant growth. IHG is well-positioned to capitalize on these trends, supported by its established brands and expanding global presence.

IHG's management anticipates attractive long-term structural growth drivers for both demand and supply. The company aims for compound growth in adjusted EPS of 12-15% annually on average over the medium to long term.