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1. Company Snapshot

1.a. Company Description

InterContinental Hotels Group PLC owns, manages, franchises, and leases hotels in the Americas, Europe, Asia, the Middle East, Africa, and Greater China.The company operates hotels under the Six Senses, Regent, InterContinental Hotels & Resorts, Vignette Collection, Kimpton Hotels & Restaurants, Hotel Indigo, EVEN Hotels, HUALUXE, Holiday Inn, Holiday Inn Express, Holiday Inn Club Vacations, avid, Staybridge Suites, Atwell Suites, Candlewood Suites, voco, and Crowne Plaza.It also provides IHG Rewards loyalty program.


As of December 31, 2021, the company operated 5,991 hotels and 880,327 rooms in approximately 100 countries.InterContinental Hotels Group PLC was founded in 1777 and is headquartered in Denham, the United Kingdom.

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1.b. Last Insights on IHG

InterContinental Hotels Group PLC's recent performance was driven by strong first-half earnings, which beat expectations despite revenue lagging. The company's CEO noted that macroeconomic uncertainties are subsiding, and development strength is evident, with a record number of rooms opened. IHG's global hotel expansion has reached over one million rooms, with a presence in more than 100 countries, and the company has doubled its brand portfolio to 20 in the last ten years.

1.c. Company Highlights

2. Strong Q1 Performance Amidst Macroeconomic Volatility

IHG Hotels & Resorts delivered a robust Q1 2025 performance, navigating macroeconomic uncertainties with ease. Global RevPAR rose 3.3%, driven by a 2.2% increase in ADR and a 0.6 percentage point improvement in occupancy. This growth was broad-based across stay occasions, with group demand leading the charge at 5%, followed by business (3%) and leisure (2%) segments. While EPS of $2.27 slightly missed consensus estimates of $2.29, the company's fee revenue growth of 6% and disciplined cost management underscored its operational resilience.

Publication Date: May -13

📋 Highlights

Regional Performance

The Americas and EMEAA regions stood out, with RevPAR growth of 3.5% and 5%, respectively. The Middle East and East Asia-Pacific regions posted standout RevPAR increases of 6.2% and 6.8%, benefiting from strong demand and strategic openings. However, Greater China saw a 3.5% RevPAR decline, attributed to easing post-COVID demand comparables. Despite this, the company remains optimistic about China's stabilization, with improving occupancy trends.

Development and Pipeline Growth

IHG's development pipeline expanded to 334,000 rooms, up 9% year-over-year, with notable contributions from the Garnett brand. The system added 14,600 rooms across 86 hotels, excluding The Venetian removal, achieving a net growth of 4.3%. The Ruby brand acquisition further bolstered IHG's presence in the premium lifestyle segment, adding 30 hotels to the pipeline. Elie Maalouf, CFO, emphasized, "Our strong signings and openings across regions position us well to meet our net system growth target of 4.3%." </h6> <h6>Financial Guidance and Outlook</h6> <p> IHG reaffirmed its full-year operating profit consensus of $1.251 billion, supported by fee margin expansion from ancillary streams and loyalty programs. While RevPAR growth is expected to moderate, the company remains confident in its ability to deliver on its EBIT guidance. The share buyback program, now 36% complete, has reduced the share count by 1.9%, enhancing shareholder value.

Valuation Analysis

Trading at a P/E ratio of 30.77 and an EV/EBITDA of 18.72, IHG's valuation reflects its premium positioning and growth prospects. The stock's dividend yield of 1.19% and free cash flow yield of 3.84% provide attractive returns for investors. While the ROIC of 21.24% highlights strong capital efficiency, the negative ROE of -28.26% raises concerns about leverage. With a net debt-to-EBITDA ratio of 2.37, IHG must maintain its disciplined approach to deleveraging.

Structural Growth Drivers

Elie Maalouf highlighted IHG's structural growth drivers, including its diverse geographic distribution and strong brand portfolio. The company's ability to balance luxury and mid-scale offerings positions it well to navigate economic cycles. With a strong pipeline and improving demand trends, IHG remains confident in its long-term growth trajectory.

3. NewsRoom

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Aimbridge Hospitality Welcomes voco Sandpiper All-Inclusive Resort to its Expanding Portfolio

Dec -03

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Agilysys InfoGenesis® Point-of-Sale (POS) Platform Approved by IHG Hotels & Resorts Across Its Portfolio

Dec -02

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How Recent Developments Are Shaping the Investment Story for InterContinental Hotels Group

Nov -29

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Holiday Inn downgrades key visitor offering

Nov -27

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Aimbridge adds six-property hotel collection to portfolio

Nov -25

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Aimbridge Hospitality Selected to Manage Six-Hotel Portfolio in Mexico

Nov -24

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European Equities Traded in the US as American Depositary Receipts Rise in Friday Trading, Down 3% for Week

Nov -21

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Horst Schulze to Open International Luxury Hotel Association's INSPIRE Las Vegas Conference in an Exclusive Fireside Chat with Phil Keb of IHG

Nov -20

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.71%)

6. Segments

System Fund and Reimbursable

Expected Growth: 8.3%

InterContinental Hotels Group PLC's System Fund and Reimbursable segments drove 8.3% growth, fueled by increased RevPAR, expanded global footprint, and strategic partnerships. Strong brand recognition, efficient cost management, and investments in digital transformation also contributed to the growth.

Americas

Expected Growth: 4.65%

Strong brand presence, increasing travel demand, and strategic partnerships drive growth in Americas for InterContinental Hotels Group PLC. Additionally, investments in digital transformation, loyalty programs, and expansion into new markets contribute to the 4.65% growth rate.

Europe, Middle East, Asia and Africa

Expected Growth: 4.73%

{'Europe': 'Strong RevPAR growth driven by robust demand, favorable currency exchange rates, and strategic brand portfolio.', 'Middle East': 'Government-led tourism initiatives, infrastructure development, and growing business travel demand fuel growth.', 'Asia': 'Rapid urbanization, increasing middle-class disposable income, and strategic partnerships drive expansion.', 'Africa': 'Infrastructure development, growing tourism, and increasing business travel demand driven by natural resource investments.'}

Central

Expected Growth: 4.78%

InterContinental Hotels Group PLC's Central segment growth of 4.78% is driven by increasing demand for luxury travel, strategic expansion in high-growth markets, and effective cost management. Additionally, the company's focus on digital transformation, loyalty programs, and partnerships with local businesses have contributed to the segment's growth.

Greater China

Expected Growth: 7.4%

Strong demand from Chinese travelers, government support for tourism infrastructure development, and strategic partnerships with local companies drove 7.4% growth in Greater China for InterContinental Hotels Group PLC. Additionally, the group's focus on mid-scale and luxury brands, such as Holiday Inn and InterContinental, resonated with the growing middle class and affluent consumers in the region.

7. Detailed Products

InterContinental Hotels & Resorts

Luxury hotels and resorts offering upscale accommodations and amenities

Kimpton Hotels & Restaurants

Boutique hotels offering unique design, amenities, and culinary experiences

Hotel Indigo

Boutique hotels offering unique, locally-inspired design and amenities

Crowne Plaza Hotels & Resorts

Upscale hotels offering business-friendly amenities and services

voco Hotels

Upscale hotels offering high-quality amenities and services

Holiday Inn Hotels & Resorts

Mid-scale hotels offering comfortable accommodations and amenities

Holiday Inn Express

Limited-service hotels offering convenient, affordable accommodations

avid hotels

Select-service hotels offering modern design and amenities

Staybridge Suites

Extended-stay hotels offering spacious suites and amenities

Candlewood Suites

Extended-stay hotels offering spacious suites and amenities

8. InterContinental Hotels Group PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

InterContinental Hotels Group PLC faces moderate threat from substitutes, as customers have various options for accommodations, including Airbnb, hostels, and budget hotels. However, the company's strong brand reputation and loyalty program help to mitigate this threat.

Bargaining Power Of Customers

Customers have significant bargaining power due to the high level of competition in the hospitality industry. InterContinental Hotels Group PLC must invest in customer loyalty programs and personalized services to maintain customer loyalty.

Bargaining Power Of Suppliers

Suppliers have limited bargaining power due to the company's large scale of operations and diversified supply chain. InterContinental Hotels Group PLC can negotiate favorable terms with suppliers, reducing costs and improving profitability.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the hospitality industry, including significant capital requirements and regulatory hurdles. InterContinental Hotels Group PLC's established brand and global presence provide a competitive advantage.

Intensity Of Rivalry

The hospitality industry is highly competitive, with many established players and new entrants vying for market share. InterContinental Hotels Group PLC must focus on differentiating its brands, investing in digital marketing, and improving operational efficiency to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 218.76%
Debt Cost 4.31%
Equity Weight -118.76%
Equity Cost 8.81%
WACC -1.03%
Leverage -184.21%

11. Quality Control: InterContinental Hotels Group PLC passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NEXT

A-Score: 5.6/10

Value: 1.8

Growth: 5.7

Quality: 6.7

Yield: 4.4

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
InterContinental Hotels

A-Score: 5.4/10

Value: 3.8

Growth: 6.2

Quality: 6.3

Yield: 1.9

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Whitbread

A-Score: 5.2/10

Value: 4.4

Growth: 5.9

Quality: 3.8

Yield: 4.4

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Redrow

A-Score: 4.9/10

Value: 6.7

Growth: 3.8

Quality: 7.4

Yield: 4.4

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Accor

A-Score: 4.8/10

Value: 3.6

Growth: 6.2

Quality: 5.3

Yield: 3.1

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Pandox

A-Score: 4.4/10

Value: 4.3

Growth: 5.4

Quality: 3.9

Yield: 2.5

Momentum: 3.5

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

100.1$

Current Price

100.1$

Potential

0.00%

Expected Cash-Flows