Intercontinental Hotels Group (NYSE:IHG) executives used the company’s latest earnings call Q&A to underline what Chief Executive Officer Elie Maalouf described as an “excellent performance” in 2025, while also addressing investor questions about fee momentum, China profitability, cost actions, unit growth visibility, and the company’s growing emphasis on loyalty, ancillary fees and technology.
2025 results: modest RevPAR, faster growth in earnings and the system
Maalouf said 2025 RevPAR grew 1.5%, which he framed as a reflection of IHG’s geographic and brand diversification and its “resilience.” He highlighted gross system growth of 6.6% and net system growth of 4.7%, driven by “record hotel openings.”
On profitability, management said fee margin expanded by 360 basis points, driven by operating leverage and step-ups in ancillary fee streams. The company reported EBIT growth of 13% and adjusted EPS growth of 16%, supported by completion of a $900 million share buyback in 2025.
2026 early trading, buybacks and the new Noted Collection brand
Looking to 2026, Maalouf said that while it is “very early” in the year, IHG has been “pleased with the trading performance to date in all three regions.” Management also announced a new $950 million share buyback program and said it has formally launched a new brand, Noted Collection.
On unit growth expectations, both Maalouf and CFO Michael Glover referenced market consensus for 2026 net unit growth of about 4.4%, saying they see more “upside than downside” to that figure. Glover pointed to strong openings and visibility across markets, while Maalouf emphasized that IHG is focused on “keys with fees,” rather than growth at any cost.
Fees, ancillaries and what management called “noise” in the algorithm
Several analysts questioned the relationship between RevPAR, system size and fee revenue growth—what management referred to as “fee triangulation.” Glover said 2025 fee growth was impacted by factors the company expects to normalize over time, including:
- Record openings that are not fully ramped, delaying fee income versus more mature hotels.
- A large number of hotels under renovation, which temporarily reduces fees while properties are closed or operating below potential.
- Large exits, including two hotels in New York, where replacement hotels “will be coming in and ramping up soon.”
- Ramp-up of Novum hotels that entered the system over the past year.
- Calendar effects, including one less day due to the absence of leap year.
Glover said the company remains confident it can return to its medium- to long-term growth algorithm and argued that the 2025 impacts were largely timing-related and in some cases reflected positive underlying dynamics such as accelerated openings.
On questions about “take rate” and whether new rooms are coming with lower effective royalty rates, Maalouf said IHG’s “take rate is not reducing” and pointed to key money amortization as one factor that can affect reported fee metrics. Glover reiterated that the company views the current pattern as “a bit of noise” tied to the ramp-up dynamics of record openings, renovations and other items, and said there is “nothing to suggest” IHG cannot deliver high single-digit fee revenue growth over time.
Cost actions, overhead efficiency and where AI fits
Management said cost discipline has been a multi-year strategic effort rather than a reaction to a single year’s market conditions. Glover said costs were down about 3% in 2025, after being up only about 1% in 2024, and the company expects roughly a 1% increase in 2026 while maintaining strong cost control.
Maalouf and Glover described the efficiency work as broad-based across regions and functions and said it extends into the system fund as well. Glover added that IHG also continued investing in areas such as integrating Ruby in EMEAA and growth markets like India, emphasizing that the goal is to “repurpose” spending toward growth.
On artificial intelligence, Maalouf outlined an enterprise-wide strategy spanning guest acquisition, commercial optimization and cost efficiency. He said IHG’s recent technology modernization positions it to “plug AI-powered systems” into its ecosystem, citing a cloud migration of core data, AI-powered revenue management deployed across hotels, a cloud-based DMS platform expected in most hotels by the end of the year, and new loyalty and digital content platforms. He also discussed trip-planning capabilities in partnership with Google and a new Salesforce-powered CRM system launching for the loyalty platform this year, with plans to scale it further in 2026.
China, segments, loyalty and branded residences
In China, executives said RevPAR improved sequentially through 2025 and turned positive in the fourth quarter (1.1%). Glover said China margin was down “very slightly” but profit was still up $1 million for the year, and both he and Maalouf said early indications for the first quarter of 2026 suggest positive RevPAR across all three regions, including China.
On demand segmentation, Glover said that for the year business was up 2%, leisure was flat, and group was up 1%. Looking into 2026, he said business demand started solidly but was affected by storms and cold weather in the U.S., while group demand “on the books” was up “almost double digits” year-over-year, with improved comparables after lapping U.S. election-related events.
Maalouf also highlighted momentum in loyalty and ancillaries, noting IHG One Rewards has reached 160 million members, with loyalty members accounting for 66% of global room nights and 72%–73% in the U.S. He said card sign-ups are up double digits and reiterated IHG’s expectation that credit card fees, which he said doubled in 2025 versus 2023, are on track to triple by 2028. Glover added the company has launched a new U.K. credit card partnership with Revolut and is pursuing additional country opportunities.
On branded residences, Maalouf said the business has not yet been “that material,” estimating fees in the $5 million–$10 million range so far, but he expects a “substantial increase” starting in 2027 and beyond as more projects enter sales phases.
IHG said its next market communication will be its first-quarter trading update on Thursday, May 7.
About Intercontinental Hotels Group (NYSE:IHG)
Intercontinental Hotels Group plc (IHG) is a multinational hospitality company that develops, owns, manages and franchises a broad portfolio of hotels and resorts. The company operates across full-service luxury and upscale segments as well as midscale and extended-stay categories, providing lodging, food and beverage, meeting and event services, and related guest amenities. IHG’s business model emphasizes brand franchising and management agreements, while retaining ownership or direct investments in a smaller portion of its global property portfolio.
IHG’s brand portfolio spans global and regional names designed to serve different traveler needs and market segments.
