InterContinental Hotel Group (IHG) operating profit increased 23% to exceed $1 billion for the first time in 2023. While, after-tax profit increased to $750 million in 2023, up from $376 million a year earlier.
Key indicator revenue per available room (RevPAR) rose 16% year-over-year thanks to strong trading following the lifting of travel restrictions imposed due to the pandemic, which were still in place in some parts of the world in 2022.
The average daily rate (ADR) increased by 5% year-on-year and by 13% compared to 2019, as occupancy increased by six percentage points.
This came as 275 hotels opened, representing nearly 48,000 rooms.
The group signed up to open a further 556 hotels as part of a global pipeline of 297,000 rooms across 2,016 hotels.
A new $800 million share repurchase program, which along with ordinary dividends, is expected to return more than $1 billion to shareholders in 2024, according to IHG.
“Reflecting the different stages of recovery after the pandemic, by the fourth quarter of 2023 our global revenues were above 2019 levels for all three types of accommodation. For the full year 2023, leisure revenue was higher than 2019 by 33%, business travel revenue was higher by 3% and although group revenue was still 5% lower, it changed to positive in the last quarter,” the hotel group said.
IHG’s mobile app and other mobile channels now account for 58% of all digital bookings.
Commenting on the results, IHG CEO Elie Maalouf said: “Travel demand was strong across all markets, with RevPAR up 16% year-on-year and 11% higher than the pre-pandemic peak in 2019. Today we are announcing a further $800 million share repurchase program, which together with ordinary dividends is expected to return over $1 billion to shareholders in 2024.”
Alongside strong commercial and financial performance, he added, we continued to grow our portfolio and the global footprint of our brands. We opened 275 hotels in 2023 and signed more than double that number – 556 hotels – under our pipeline.
“Adjusting for the impact of the integration of Iberostar hotels into the IHG system, openings for the fourth quarter were up 27% year-over-year and signings were up 50%, representing one of our best quarters ever in terms of growth activity,” concluded Mr. Maalouf.
