IHG posts 13% adjusted EPS growth as hotel openings hit record

IHG Hotels & Resorts reported H1 operating profit of $665 million, up 10%, as global RevPAR rose 4.1% and hotel openings hit a record.

"Our diverse global footprint and better-than-expected demand in most markets around the world delivered strong RevPAR growth of +4.1% in the first six months of 2026," Chief Executive Officer Elie Maalouf said.

Adjusted EPS rose 13% to 274.7 cents, with fee margin expanding 1.2 percentage points to 65.9%. Revenue from reportable segments increased 7% to $1.26 billion. The company opened 197 hotels with 31,500 rooms and signed 352 hotels, both up 8% on an organic basis.

IHG is on track to return more than $1.2 billion to shareholders in 2026 through a $950 million buyback, 42% complete, and a 10% higher interim dividend of 64.5 cents. Management reaffirmed full-year consensus expectations.

RevPAR growth was led by the Americas at 4.8%, with EMEAA up 3.0% and Greater China up 3.1%. US RevPAR accelerated to 5.2% in the second quarter from 3.4% in the first, helped by FIFA World Cup match locations from mid-June. Greater China operating profit jumped 25% to $55 million on a 15.8% rise in fee revenue.

Net system growth reached 5.0% year on year, expanding the global estate to 7,109 hotels with 1.05 million rooms. The development pipeline stands at 2,385 hotels, equal to 33% of current system size, with Greater China net system growth accelerating to 11.7%.

Adjusted free cash flow rose to $360 million from $302 million, while net cash from operating activities increased to $355 million. Trailing 12-month adjusted EBITDA grew 11% to $1.39 billion, keeping the net debt-to-EBITDA ratio at 2.63 times, within the company's 2.5-3.0 target range.

The Middle East conflict weighed on EMEAA, where second-quarter RevPAR growth slowed to 0.6% from 5.6% in the first quarter. Maalouf said the impact is expected to be fully offset by growth in demand elsewhere.

The results signal resilient travel demand across most markets, with record development activity supporting future fee growth. Investors will watch the full-year results on Feb. 23, 2027, for continued margin expansion and progress on the buyback.

This article is for informational purposes only and does not constitute investment advice.