InterContinental Hotels Group Plc 2026 H1 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- IHG Hotels & Resorts reported a strong financial performance in the first half of 2026 with global RevPAR growth of 4.1% and net system growth of 5%.
- Fee revenue increased by 7% to $971 million, and fee margin expanded by 120 basis points to 65.9%, driving a 10% growth in operating profit from reportable segments to $655 million.
- Adjusted earnings per share grew 13% to 274.7 cents, supported by a $950 million share buyback program and strong cash conversion.
- IHG declared an interim dividend of $0.645 per share, a 10% increase consistent with growth since 2022, with total shareholder returns expected to exceed $1.2 billion in 2026 including dividends and buybacks.
- The company opened 197 hotels with 31,500 rooms and signed 352 hotels with 49,200 rooms in the first half, representing record development activity and 6.5% gross system growth.
- Regional RevPAR growth was 4.8% in the Americas, 3% in EMEAA, and 3.1% in Greater China, with some impact in EMEAA from Middle East conflict.
- Fee margin improvements were broad-based across regions, with the Americas at 84.2%, EMEAA at 69.8%, and Greater China at 62.5%.
- Adjusted free cash flow was $360 million, up $58 million year-over-year, with financial leverage within the target range of 2.5-3x net debt to EBITDA.
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Transcript
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Hello, and welcome to IHG's 2026 half-year results presentation. I'm Stuart Ford, Senior Vice President and Head of Investor Relations at IHG Hotels & Resorts. Shortly, you'll be hearing from Elie Maalouf, our Chief Executive Officer, and Michael Glover, Chief Financial Officer. Before we proceed, I'm obliged to remind all viewers and listeners that the company may make certain forward-looking statements as defined under U.S. law. Please refer to the accompanying results announcement and the company's SEC filings for factors that could lead actual results to differ materially from those expressed in or implied by any such forward-looking statements. In addition, the presentation will refer to certain non-GAAP financial measures. Once again, please refer to the accompanying results announcement and SEC filings for reconciliations of these measures to the most directly comparable line items within the financial statements.
The results announcement, together with the usual supplementary data pack, as well as the presentation slides accompanying this webcast, can all be downloaded from the Results and Presentations section under the Investors tab on ihgplc.com. Now, over to our first half highlights reel, followed by Elie.
Hello, I'm Elie Maalouf, Chief Executive Officer of IHG Hotels & Resorts. Welcome to IHG's 2026 half-year results presentation. I will begin with a short overview of our results in the first half, a period of strong financial performance, record development activity, and further progress on a clear strategy that's unlocking IHG's full potential. Michael Glover, our Chief Financial Officer, will then provide a financial review. After that, I will return to take you through the progress we are making on our strategic priorities. IHG delivered a strong financial performance in the first half of 2026. Global RevPAR grew 4.1%, net system growth reached 5%, fee revenue grew 7%, and fee margin expanded by 120 basis points, driving 10% growth in operating profit from reportable segments. Supported by strong cash conversion in our share buybacks, EPS grew even faster at 13%.
Today, we are pleased to declare an interim dividend of $0.645, an increase consistent with our 10% growth rate since 2022. Dividend payments, along with a $950 million share buyback program, are expected to return over $1.2 billion to shareholders in 2026. Together, the results reflect the strength and resilience of our business model, the diversification and scale of our estate, and the long-term value creation potential of our enterprise platform. They are a clear demonstration of how IHG's continuing to deliver against the growth algorithm we set out in 2024. Let me now hand over to Michael to take you through the financial results in more detail.
Thanks, Elie. I'm Michael Glover, Chief Financial Officer for IHG Hotels & Resorts. Let me take you through some more detail on the strong financial performance delivered in the first half of 2026. I'll start, as usual, with our reportable segments, which includes the fee business together with our owned and leased portfolio of 17 hotels. Revenue was $1,255 million, and EBIT was $655 million, growing 7% and 10% respectively. Within this, fee business revenue increased 7% to $971 million, and fee business operating profit increased 8% to $640 million. Fee margin increased by 120 basis points to 65.9%. I'll come back to the drivers of that performance in more detail shortly. Adjusted interest increased to $106 million, putting us on track for our full-year guidance range that we've narrowed to $230 million-$240 million.
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