How IHG’s Service Excellence Fuels RevPAR Growth in 2024
IHG HOTELS & RESORTS reported global RevPAR growth of 3 percent for 2024 and 4.6 percent in the fourth quarter, with the Americas rising 2.5 percent and 4.6 percent for the year and quarter, respectively. The company acquired Germany-based lifestyle hotel brand Ruby for about $116 million, aiming for global expansion, including the Americas.
It opened 371 hotels globally in 2024, up 24 percent, and added 714 to the pipeline, a 34 percent increase, including 16,832 rooms opened and 26,552 signed in the Americas, IHG said in a statement.
“Thanks to the hard work and dedication of our teams around the world, 2024 was an excellent year of financial performance, strong growth and important progress against a clear strategy that is unlocking the full potential of our business for all stakeholders,” said Elie Maalouf, IHG's CEO. “RevPAR growth accelerated in the fourth quarter, reflecting the breadth of our global footprint and improvements in all three regions. Together with strong system growth, notable margin expansion and the benefit of returning surplus capital through buybacks, we’re pleased to report adjusted EPS growth for the year of 15 percent.”
Trading and revenue
- Americas RevPAR rose 2.5 percent for the year and 4.6 percent in the fourth quarter, with U.S. RevPAR up 1.7 percent, improving from 0.6 percent in the first half to 2.6 percent in the second half.
- EMEAA RevPAR increased 6.6 percent for 2024 and 6.9 percent in the fourth quarter, while Greater China declined 4.8 percent for the year and 2.8 percent in the fourth quarter.
- ADR rose 2.1 percent year over year, with occupancy up 0.6 percentage points.
- Total gross revenue reached $33.4 billion, up 6 percent year over year.
System size and pipeline
- Gross system growth of 6.2 percent for 2024, with net growth of 4.3 percent.
- Opened 59,100 rooms across 371 hotels, up 23 percent year over year, bringing the global estate to 987,000 rooms across 6,629 hotels.
- Signed 106,200 rooms in 714 hotels, up 34 percent year over year, with new-build signings up 3 percent and conversions up 88 percent. The global pipeline reached 325,000 rooms across 2,210 hotels, up 10 percent.
- Opened 23,600 rooms across 147 properties in the fourth quarter, up 23 percent year over year, marking the second-largest quarter for openings.
- Signed 30,000 rooms in 201 hotels in the fourth quarter, up 6 percent year over year, among the largest signing quarters.
Maalouf said strong global demand from hotel owners and developers drove 371 openings and 714 signings, nearly two per day.
“The 106,000 rooms signed were 34 percent more than the previous year,” he said. “Our global estate now stands at more than 6,600 hotels, and momentum continued into 2025 with the recent celebration of our 800th opening in greater China. Our global pipeline increased 10 percent to more than 2,200 hotels, representing future system size growth of 33 percent.”
Margin and profit
- 2024 fee margin reached 61.2 percent, up 1.9 percentage points, driven by strong trading and growing ancillary fee streams.
- Operating profit from reportable segments rose 10.3 percent to $1.124 billion, including a $16 million adverse currency impact.
- IFRS operating profit of $1.041 billion includes an $83 million system fund and reimbursables loss, compared to a $19 million profit in 2023, due to the planned reduction of prior System Fund surplus. Exceptional items were net zero, compared to a $28 million exceptional profit in 2023.
“We continue to strengthen our enterprise to position IHG as the first choice for guests and owners, further improving and growing our brands, driving loyalty contribution, rolling out new hotel technology, and increasing our ancillary fee streams,” Maalouf said. “Our cash generation and strong balance sheet support further investment in growth, and we also continue to sustainably increase our ordinary dividend and the regular return of surplus capital through share buybacks. The board is pleased to propose another 10 percent increase in the dividend and the launch today of a new $900 million share buyback program.”
IHG’s 20th brand
Established in 2013, Ruby is an urban lifestyle brand with space-efficient designs and a flexible concept for hotel owners. It operates 20 hotels with 3,483 rooms across major European cities, with 10 more comprising 2,235 rooms in the pipeline.
“This acquisition demonstrates our focus on building our presence in large, attractive industry segments and using our experience in integrating and growing brands and hotel portfolios,” Maalouf said. “The urban micro-space is a franchise-friendly model with attractive owner economics, and we see excellent opportunities to not only expand Ruby’s strong European base but also rapidly take this exciting brand to the Americas and across Asia, as we have successfully done with previous brand acquisitions.”
IHG's Crowne Plaza Hotels & Resorts introduced its “New Modern” design across U.S. properties, with plans to update 70 percent of its Americas estate by late 2025.
"We enter 2025 confident in further capitalizing on our scale, leading positions, and the strong long-term demand drivers for our markets, all of which support the ongoing successful delivery of our growth algorithm," he said.
