InterContinental Hotels Group PLC on Tuesday said it anticipated attractive long-term growth drivers as it announced an annual profit jump and a new share buyback programme.
The Windsor, Berkshire-based operator of the InterContinental, Holiday Inn and Crowne Plaza hotel chains said pretax profit surged 87% to $1.01 billion in 2023 from $540 million in 2022.
Revenue climbed 19% to $4.62 billion from $3.89 billion, boosted by growth in all regions. The sharpest growth was in Greater China, where revenue surged 85% to $161 million from $87 million. The weakest growth was in the Americas region, where revenue was 10% higher at $1.11 billion compared to $1.00 billion.
The company proposed a final dividend of 104.0 US cents, up 10% from a year ago. This brings the total dividend for 2023 to 152.3c, 10% higher than 138.4c for 2022.
It also launched a new up to $800 million share buyback programme aimed at reducing issued share capital. The bought back shares will be cancelled.
‘Travel demand was strong across all markets, with [revenue per available room] up 16% on last year and 11% ahead of the 2019 pre-pandemic peak. Combined with the power of our enterprise and efficient operating model, profit from reportable segments grew 23% and exceeded one billion dollars for the first time,’ said Chief Executive Officer Elie Maalouf. ‘Alongside strong trading and financial performances, 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 amount - 556 hotels - into our pipeline.’
Looking ahead, the company expects a compound annual growth rate in the US market of 4.0% through to 2033, with China to be faster at 4.2% CAGR.
‘Whilst geopolitical risks and the economic outlook in some geographies show challenges and uncertainties, current conditions, including employment, consumer savings and business activity levels, remain supportive of industry growth,’ InterCo Hotels said.
It added that near-term growth is expected to capture a number of tailwinds such as a full post-pandemic recovery in several countries with further improvement regarding room rates driven by increased demand, constrained net supply in the short term and any ongoing inflation.
InterCo Hotels expects high-single digit percentage growth in fee revenue annually on overage over the medium to long term, helped by the combination of revenue per available room growth and net system size growth.
InterCo Hotels shares were 1.1% higher at 7,996.00 pence each on Tuesday morning in London.
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