ii view: InterContinental Hotels reports record new openings
An asset-light business model and charging fees to operate and run properties under its suite of hotel brands. We assess prospects for this FTSE 100 company.
17th February 2026 16:11
by Keith Bowman from interactive investor
Full-year results to 31 December
- Currency adjusted operating profit up 12% to $1.27 billion (£940 million)
- Final dividend of 125.9 US cents
- Total dividend up 10% to 184.5 US cents
- 2025 share buybacks of $900 million
- Group net debt up 20% to $3.33 billion
Guidance:
Plans 2026 share buybacks of $950 million
Chief executive Elie Maalouf said:
“Supported by attractive long-term industry demand drivers and our proven ability to capitalise on our scale and diverse fee streams across segments and geographies, we enter 2026 with confidence."
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ii round-up:
InterContinental Hotels Group (LSE:IHG) today detailed record annual new hotel openings, with the owner of brands including Holiday Inn and Crown Plaza reporting increased profit that matched City forecasts.
Just over 65,000 new rooms across 443 hotels helped drive annual operating profit up 13% to $1.27 billion (£940 million). A gain in Revenue per Available Room (RevPar), a key industry metric, of 1.5% for 2025, was down from 3% in 2024, although management is happy with analyst estimates for an improvement of 2.4% in 2026.
Shares in the FTSE 100 company rose 1% in UK trading having come into this latest news up 13% in 2025. That’s similar to rival Marriott International Inc Class A (NASDAQ:MAR) last year. The FTSE 100 index rose by just over a fifth in 2025.
InterContinental operates 20 global hotel brands from budget to luxury names across more than 100 countries.
Management outlook comments pointed to less turbulent trading conditions in the US and stronger demand more broadly, aided by events such as the 2026 football World Cup. In 2025, Trump trade tariffs potentially alienated overseas visitors to the US.
A pipeline of 2,300 properties to possibly convert to one of its branded hotels offers ongoing growth potential, and system growth equivalent of 33% based on existing outlets of 6,900.
Group year-end net debt of $3.3 billion is up a fifth year-over-year, pushed by an annual $900 million share buyback programme.
A final dividend of 125.9 US cents per share takes the total payment for 2025 up 10% to 184.5 US cents. A share buyback programme of $950 million is planned for 2026.
A first quarter 2026 trading update is scheduled for 7 May.
ii view:
Headquartered in Buckinghamshire, other group brands globally include InterContinental itself, Six Senses, Regent, Kimpton and Candlewood. The number of group brands continues to expand, having doubled from 10 a decade ago. Other management initiatives include expanding key geographic markets, developing the group’s technology and enterprise platform, as well as driving ancillary fee streams such as those for its customer rewards loyalty programme.
For investors, US tariffs and ongoing economic challenges in China saw RevPAR rates of just 0.3% and -1.6% over this latest financial year. A forecast price/earnings (PE) ratio above the three-year average may suggest the shares are not obviously cheap. Group net debt has risen with interest charges likely to rise, while video meetings now likely replace some former business travel.
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More favourably, geographical and brand diversity are high. The business model is asset-light, with other organisations usually owning the properties and IHG charging fees to operate and run under its hotel brands. A sizeable pipeline of potential future hotels exists, while shareholder returns focus on both share buybacks and a prospective dividend yield of around 1.3%.
In all, and despite continued risks, this global hotelier looks to remain worthy of its place in many diversified investor portfolios.
Positives:
- Brand and geographical diversity
- Focus on shareholder returns
Negatives:
- Uncertain economic outlook
- Heightened global geopolitical tensions
The average rating of stock market analysts:
Strong hold
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