Holiday Inn owner IHG is returning more than $1.1 billion to shareholders in 2025 and buying European urban hotel brand Ruby for $116m, it said today, after annual room revenue beat expectations.
IHG, which also owns Crowne Plaza and Six Senses hotels, reported growth of 3% in annual room revenue, above market expectations, boosted by a pick-up in demand in the US and despite weakness in China.
Analysts had expected average revenue per available room (RevPAR), a key industry metric, to grow 2.6% for the year ended December 31, 2024, a company-compiled consensus showed.
CEO Elie Maalouf said he planned to expand the Ruby brand to the US and Asia. Currently the business operates 20 hotels in European cities.
"We would expect this (Ruby) brand to compete with Hilton's Motto and CitzenM, both successful brands globally," analysts at Bernstein said in a note.
In the US - its largest market - IHG reported a RevPAR growth of 1.7% for the year. In China, RevPAR fell 4.8%.
IHG kept its medium-term targets, but projected 2025 adjusted interest expense to range between $190m and $205m, above analysts' consensus estimate of $174m.
Shares in the company, which scaled all-time highs last week, were down 1.2% in early trade, with Jefferies analysts saying the worse-than-expected interest expense forecast could drag profit estimates.
Peers Marriott International and Hilton Worldwide had forecast a downbeat 2025, hurt by poor performance at hotels in Greater China, while Hyatt Hotels reported a less than stellar fourth quarter last week.
IHG today reported annual operating profit in line with market expectations.
It launched a new $900m share buyback programme and proposed a 10% increase in its annual dividend, taking shareholder returns this year to more than $1.1 billion.
