InterContinental Hotels Group PLC

Good morning, everyone, from me, and also welcome to IHG's conference call covering that 2024 third quarter trading update. So I'm Stuart Ford, Head of Investor Relations at IHG, and I'm joined this morning by Ellie Maloof, our Chief Executive Officer, and Michael Glover, our Chief Financial Officer. Just to remind listeners on the call that in discussions today, the company may make certain forward-looking statements as defined under U.S. law. Do please refer to this morning's announcement and the company's SEC filings for factors that could lead actual results to differ materially from those expressed in or implied by any such forward-looking statements. For those analysts or institutional investors who are listening via our website, may I remind you that in order to ask questions, you will need to dial in using the details on page two of this morning's R&S release. The release, together with the usual supplementary data pack for the third quarter, can be downloaded from the Results and Presentations section under the Investors tab on ixgplc.com. Now over to Eli.

ELLIOT METCALF- Well, thank you, Stuart, and good morning, everyone. As Stuart said, I'm here this morning with Michael. I will pass over to him in just a moment, and he will review each of the regions for you in more detail. And before that, I would like to cover some of the highlights for the group overall. We are certainly pleased with the latest trading performance, and it's been another strong period of development activity. And we are on track to finish 2024 in line with market expectations and our growth algorithm. Revpar continued to grow, driven by our globally diverse footprint. It was up 1.5% for the third quarter, and the year-to-date performance is up 2.4%. There was continued pricing power, with third quarter ADR up 1.7%. Occupancy was pretty much unchanged in Q3 and was up 0.4 percentage points for the year to date. Michael will provide more detail, but within this global performance, the red bar for Greater China was down as expected, which reflected the unusually strong comps a year ago. These comps, of course, get easier in the fourth quarter. In terms of performance by demand driver, Groups showed further strong growth, with revenue up 6% in the quarter globally. Business revenue also grew up 2%. Leisure revenue was broadly flat, down less than 1%, despite the particularly strong comparative, as leisure was already 34% above 2019 levels this time last year. Going back to groups activity for a moment, Q3 was a record period for bookings, taken up by our global sales organization. Pace looks strong through the rest of 2024 and into 2025. And we're pleased to see corporate travel organizations like Amex saying that two thirds of meeting planners expect to spend more on meetings in 2025. What's on the books for groups and meetings cumulatively for all future time periods is about 25% ahead of this time last year. And what's on the books across all demand drivers, so that's including leisure and business, as well as groups and meetings, is 7.7% ahead of this time last year. While you will all appreciate that the overall booking window is relatively short for all major global hotel operators, these on-the-book statistics will still give confidence of future total revenue growth to come. In terms of system growth, we opened more than 17,500 rooms across 98 hotels in the quarter, well over double the same period last year, which was in part due to the next 6,000 rooms of the Novum Hospitality Agreement joining Aishi System. This contributed to year-on-year gross growth of 5.9% and net system growth of 4.1%. It is worth reminding that we typically experience seasonality in our system growth with a greater proportion of openings occurring in the last quarter of each calendar year. Year-to-date net system growth of 2.3%, which is ahead of the 2023 Q3 year-to-date of 2.0%, is therefore expected to significantly ramp up through the final quarter of 2024, just as it did last year, and as reflected in the net growth being 4.1% for the rolling 12 months. Turning to signings, we added over 19,000 rooms to our pipeline in the quarter, which was an increase of 14% on the same period last year. Our global pipeline, which now stands at 327,000 rooms, representing future growth equivalent to over a third of our current system size, finished a quarter 12% larger than at the same point last year. So, we've got good momentum heading into Q4 and 2025. And with that, let me now hand it over to Michael.

Thanks, Ellie. Let me start with some further detail on each region. For the Americas, REBPAR was up 1.7% year on year, with the U.S. up 1.2%. It has been encouraging to see the economy hold up well and demonstrate both stability and normalization as expected. Across Canada, Latin America, and the Caribbean, Repar was up 6.2%. Occupancy for the region, which had already normalized quite some time ago, was unchanged for the quarter, and pricing remained robust, with rate growing 1.7%. If we take a closer look at the stay occasion drivers, groups demand was the strongest, with comparable rooms revenue up year-on-year by 7%. Business revenue was ahead by 3%, while leisure revenue was only slightly lower than the same period in the previous year. In terms of development progress in the Americas, 3,500 rooms were opened in the quarter. In the first three quarters of this year, we have opened almost the same number of rooms as we did for the whole of 2023, and we still expect further acceleration of this run rate as we head into Q4. Openings in the quarter included 11 hotels across the Holiday Inn brand family. One of these is an express that is dual branded with Candlewood Suites, which was completed in just 16 months from ground break to open, an example of the speed of which new builds can be done in a more normal environment. There were also two more VOCO properties that opened in the quarter, two for Kempton, and two for Intercontinental as well. And on October 1st, the Regent Santa Monica Beach officially opened, the first hotel for this legendary luxury brand in the region, and which will drive further progress at the very top end of luxury with this flagship property. We signed close to 7,000 rooms across the region, an increase of more than 30% on the same period last year. It was another great quarter for Garner with seven more hotels signed, which now takes the brand to 92 hotels across open and pipeline just one year on since launch. There were 19 Holiday Inn brand family signings and 17 across our extended stay brands, showing their continued strong appeal to owners. And within the seven signings across our luxury and lifestyle brands, there is a 700-key Intercontinental in Orlando, another flagship for this leading global brand. Moving on now to Europe, Middle East, Asia, and Africa region, where Repar was up an impressive 4.9%. Pleasingly, this was driven by both pricing and demand, with rate up 3.6% and occupancy up 0.9 percentage points. In a region as broad and diverse as the MEAA, there will be a range of trading performance observed across individual submarkets. Continental Europe saw Q3 repart increased by 7%, with benefits including the Olympics in France, as well as very strong groups and events demand in Germany. The Asia Pacific region saw repart growth of 6.5%, with a continued uplift in outbound Chinese travel boosting demand. Within this subregion, Growth was up high single digits in Japan, as well into the double digits in popular leisure destinations like Vietnam and Thailand, but growth was modest in locations like Australia. The UK saw red par increase by over 2%, with both London and the regions driving growth. The Middle East saw red par decline year-on-year by 3%, having been up by 9% in the first half of the year. There were some impacts from the timing of religious tourism events and the ongoing conflicts in the wider region. It's worth remembering the geographic breadth of ISG's portfolio within the whole of the Middle East region is representing less than 5% of ISG's global system. Over 8,500 rooms were opened in the quarter, including 6,000 related to the Novum Agreement we signed earlier this year. 31 further Novum hotels were opened in Q3, bringing the overall total to 37. As a reminder, 119 hotels were signed as part of the original agreement, and therefore this portfolio will continue to contribute to our overall system growth in the next 12 to 18 months. There will be a smaller number of openings in the next quarter, as we move into the next tranche of hotels that have more extensive PIPs required for them to convert to our system, and then further openings next year. Gross growth for EMEAA was 8.2% year-on-year, while net system growth was 6.6%. 5,800 rooms were signed to the pipeline in the quarter, over 20% more than a year earlier. These signings were well dispersed across all segments, demonstrating ISG's ability to compete in win deals all through the chain scales. It was great to see Vignette perform particularly well with eight signings in the quarter, clearly reflective of the traction the brand has already established. There were also two Garner signings as it ramps up development activity in the region, and conversions overall represented 56% of all rooms signed in the quarter. Finally, moving on to Greater China, where Repar was down 10.3% year-on-year, against very strong comparatives on the back of resurgent domestic travel this time last year. To remind you, in Q3 of 2023, Repar left up to be 9.3% ahead of 2019 levels. And so, a year on from that, we're back to being broadly in line with 2019. Rate was down 7.4%, reflecting a pricing environment that has been normalizing in the effect of the high-end Chinese leisure travel heading outbound. In Q3 last year, we witnessed what was in effect a captive market in Greater China, with limited outbound capacity driving up domestic rates, particularly in Tier 4 resort locations. Chinese leisure travels now have more optionality with most short-haul flight capacity in fully back to pre-pandemic levels. And so they have trended towards international destinations through the summer, which, as I've already mentioned, has provided an uplift in other locations, particularly our business in Asia Pacific. It's also worth noting that in September, there were two typhoons that passed through numerous Chinese provinces. And trading in September was also adversely impacted from the shifts in the timing of public holidays compared to the prior year. Coming on to development activity in the region. While short-term trading performance has been impacted particularly by the unusually strong comparatives a year ago, we remain very encouraged by the longer-term demand drivers for the region and the continued supportive government policies toward travel and tourism, infrastructure investment, and economic development. and this is reflected in the excellent levels of hotel development activity we've been seeing. In terms of system size, 5,500 rooms were opened in the quarter, an increase of over 50% on the same period last year. This has driven gross growth of 11.9% year-on-year, while net system growth was 9.6%. Highlights for the quarter included the opening of a dual-brand Voco Suites and Even Hotel facility in Shanghai, representing the second examples for each of these brands in the city, and further demonstrating the growing popularity of these more recently introduced brands. A further 6,700 rooms were added to the pipeline as development momentum continues to build following the extended period of COVID-related restrictions. Cumulative signings to date in 2024 are up by over 20% on last year. Notable signings include another stunning representation of the Kempton brand in Shanghai. Elsewhere, the Holiday Inn brand family also performed particularly well, with 24 signings in the quarter. As we've noted in this statement out today, for both hotel openings and hotel signings, 2024 is headed to be one of our biggest years ever in the region, which is very exciting. Just to update you on the share buyback, we are currently 77% of the way through the $800 million program we announced in February. To date, this has reduced our share count by a further 3.7%. This year's buyback, along with ordinary dividend payments, will have returned over $1 billion in to shareholders in 2024, equivalent to 7.1% of our market cap at the start of the year. I'd also note to you, last month we issued a new $750 million Euro bond, which we swapped into dollars, then repaid a bond that matured earlier this month. This results in the blended borrowing cost across our six bond maturities being just a touch over 4%. As we set out back in August, leverage continues to be expected to be around the lower end of our net debt to adjusted EBITDA target range of two and a half to three times at December 31st, 2024. And then finally, a brief update to note that ISG's license agreement to affiliate the Venetian and Palazzo hotels in Las Vegas with the Intercontinental Hotels and Resorts brand will come to an end on January 1, 2025, after 15 years. This will mean the removal of just over 7,000 rooms, or approximately 0.7% of IHG's overall system in 2025. However, the unique nature of the fee structure under this particular licensing agreement means that it contributed significantly contributed less than $1 million to our fee business revenue last year, and it made a net nil contribution to operating profit from reportable segments, or EBIT. The impact on the system fund is also not material. In fact, the agreement created a small loss to the system fund. Other agreements in the Intercontinental Alliance, which are three resorts located of the Venetian Macau, the Parisian Macau, and the Londoner Macau remain unchanged. I will now hand back to Eli.