IHG Reports Full Year Gross Revenue Increase of 33% for 2022
IHG Reports Full Year Results to 31 December 2022
Underlying 2022 2021% change
|Revenue from fee business1||$1,449m||$1,153m||+26%||+28%|
|Total dividend per share||138.4¢||85.9¢||+61%|
- $25.8bn total gross revenue1 +33% vs 2021, (8)% vs 2019
- +37% global FY RevPAR1 vs 2021, (3.3)% vs 2019
- +26% global Q4 RevPAR1 vs 2021, +4.1% vs 2019
1 Definitions for non-GAAP measures can be found in the ‘Use of key performance measures and non-GAAP measures’ section, along with reconciliations of these measures to the most directly comparable line items within the Financial Statements.
- Further significant improvement in trading: sequential improvement each quarter in global RevPAR vs 2019
- Strongest recovery in Americas, with RevPAR +3.3% vs 2019 (Q4 +9.0%); EMEAA improving to (7.5)% (Q4 +8.8%); Greater China (38)% (Q4 (42)%) due to the scale of travel restrictions that were still in place
- Average daily rate +18% vs 2021, +8% vs 2019; occupancy +9%pts vs 2021, (7)%pts vs 2019
- Iberostar Beachfront Resorts agreement signed in November 2022, with first 12.4k rooms added to IHG’s system in December 2022; continue to explore further opportunities with Exclusive Partners to drive additional system growth
- Gross system growth +5.6% YOY; adjusted net system size growth of +4.3% YOY
- Opened and added 49.4k rooms (269 hotels); global estate now at 912k rooms (6,164 hotels)
- Signed 80.3k rooms (467 hotels); global pipeline now at 281k rooms (1,859 hotels), +3.9% YOY
- Fee margin of 56.2%, +6.6%pts vs 2021 (+2.1%pts vs 2019’s 54.1%)
- Operating profit from reportable segments of $828m, +55% vs 2021; this was held back by $17m adverse currency impact and included $5m of costs related to Iberostar agreement
- Reported operating profit of $628m, after $105m System Fund reported loss and $95m net exceptional charges
- Net cash from operating activities of $646m (2021: $636m), with adjusted free cash flow1 of $565m (2021: $571m); net debt movement includes $482m share buybacks, $233m dividends and a $230m net foreign exchange benefit
- Adjusted EBITDA1 of $896m, +42% vs 2021; net debt:adjusted EBITDA ratio reduced to 2.1x
- Final dividend of 94.5¢ proposed, +10% vs 2021, resulting in a total dividend for the year of 138.4¢
- Share buyback programme to return an additional $750m of surplus capital in 2023
Keith Barr, Chief Executive Officer, IHG Hotels & Resorts, said:
“In 2022 we saw demand return strongly in most of our markets, pushing Group RevPAR back close to 2019 levels and fee margin ahead. It’s particularly pleasing that in the second half of the year we exceeded 2019 levels for both RevPAR and profitability. Looking to 2023, while there are economic uncertainties, we expect continued strong leisure demand in many markets, alongside further return of business and group travel and the ongoing reopening of China.
Our strategy over the last five years has significantly strengthened our brand portfolio and seen substantial investment to innovate our technology and distribution platforms. Our recent agreement with Iberostar adds our 18th brand and substantially increases our resort and all-inclusive presence, and we continue to explore further new opportunities like this for additional growth through exclusive partners. Meanwhile, the other six brands we have added since 2017 already contribute more than 10% of our pipeline, and our Luxury & Lifestyle portfolio is now 13% of our system size and 20% of our pipeline as we increase our exposure to higher fee income segments.
In total, we signed 467 hotels in 2022 and opened 269, which led to net system growth of over 4%. The further 1,800 hotels in our pipeline represents future growth of over 30% of today’s system size. The Holiday Inn Brand Family, with its global leadership position, delivered around a third of our hotel signings and half of openings.
IHG’s enterprise platform strength helps our hotel owners capture demand and grow their business, with enterprise contribution increasing in 2022 to represent 77% of their total room revenue. Critical to this was the launch of our new mobile app during the year, which has led to mobile now accounting for more than half of all digital bookings, while the transformation of our IHG One Rewards programme has delivered significant improvements in both enrolments and loyalty contribution. Alongside substantial investments in revenue-generating technology platforms to support future growth, we have also continued to invest in our internal systems to maintain the health of the business, and in capabilities to help IHG and our hotel owners meet our 2030 Journey to Tomorrow responsible business commitments.
IHG’s overarching ambition is to deliver industry-leading growth in our scale, enterprise platform and performance, doing so sustainably for all stakeholders including our hotel owners, guests and society as a whole. We are a stronger and more resilient company than ever before, and we are proud of the advancements made in each of our strategic priorities. Reflecting the confidence we have in continued growth and the highly cash generative nature of our business, the Board is pleased to be recommending a 10% increase in the final dividend in respect of 2022 and to announce a further share buyback programme to return an additional $750m to shareholders in 2023.”
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