Holiday Inn owner IHG is celebrating the acquisition of its 20th brand and heightened returns for shareholders amidst a resurgence in the travel sector.
The company, based in Windsor, has seen its fortunes ascend as travel regains momentum post-pandemic, with early projections for 2024 indicating that the hotel industry's revenues have eclipsed those of 2019, as reported by .
In a statement to the markets this morning, IHG revealed that its revenue climbed to $2.3bn (£1.82bn) in 2024, marking a 7% increase from $2.1bn in the previous year.
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Operating profit experienced a 10% rise to $1.1bn, while earnings per share saw a significant 15% climb to 434.4 cents.
Despite the positive financial indicators, IHG's share price experienced a slight downturn, dropping by 1.73% in early trading.
The hospitality giant, known for owning rights to a plethora of prominent brands including Crowne Plaza, Six Senses, and Staybridge Suites, primarily adopts a franchise business model.
This past year, IHG launched 59,100 rooms across 371 hotels, which is a 23% year-on-year surge, bringing their worldwide portfolio to 987,000 rooms at 6,629 properties.
Furthermore, IHG's development pipeline is robust, featuring 325,000 rooms across 2,210 hotels, boasting a 10% year-over-year growth.
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"2024 was an excellent year of financial performance, strong growth and important progress against a clear strategy," commented Maalouf.
"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," she elaborated.
IHG acquires European lifestyle brand
In conjunction with its latest results announcement, the hotel conglomerate revealed that it has acquired Ruby, a European urban lifestyle brand, for €110.5m (£91.6m).
Ruby, which was established in 2013 and currently operates 20 hotels across Europe, including three in London, has become the 20th brand under the hotel giant's umbrella.
"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," said Elie Maalouf, CEO of IHG Hotels & Resorts.
The company praised Ruby's "space-efficient designs" and "attractive, flexible concept that IHG expects to rapidly expand globally."
"This acquisition demonstrates our focus on building our presence in large, attractive industry segments and using our experience of integrating and growing brands and hotel portfolios," added Maalouf.
Share buyback and dividend jump
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IHG also announced the completion of its $800m share buyback programme and the payment of $259m of ordinary dividends to shareholders in 2024.
It proposed a final dividend of 114.4¢, resulting in a total dividend for the year of 167.6¢ for 2024, up 10 per cent year on year. Furthermore, it launched a new $900m buyback programme, which along with ordinary dividend payments is expected to return over $1.1bn to shareholders in 2025.
"We enter 2025 with confidence in further capitalising on our scale, leading positions and the attractive long term demand drivers for our markets, all of which supports the ongoing successful delivery of our growth algorithm," stated Maalouf.
This comes after several share buyback schemes following the pandemic.
John Moore, senior investment manager at RBC Brewin Dolphin, commented: "IHG has booked a strong set of results.
"They reflect the renewed focus and investment in the business, which continues today with the acquisition of Ruby – the company's 20th brand.
"Aside from the robust figures, there is also a subtle shift in the approach to shareholder returns, with the dividend reduced in favour of share buy backs – a move that aligns with a more US approach to shareholder returns and, perhaps, mirrors IHG's ambition to be as successful at attracting global investors as it is at attracting global travellers."