InterContinental Hotels Group PLC

Morning, everyone, from me, and welcome to IHG Hotel and Resorts conference call covering the 2025 first quarter trading update. I'm Stuart Ford, Senior Vice President and 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. Please do 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 three of this morning's R&S release. The release, together with the usual supplementary data pack for the first quarter, can be downloaded from the results and presentation section under the investors tab on isgplc.com. Now over to Eli.

Thank you, Stuart, and good morning, everyone. I'd like to start today by thanking our teams for what has been a very busy and productive start to the year across our business and another period that has really demonstrated the attractiveness and strength of our globally diverse footprint, despite heightened macro volatility. Rev Park continued to grow and on a global basis was up 3.3%. This was driven by both ADR, which was up 2.2%, and occupancy, which was up 0.6%. The growth was across all three drivers of stay occasions. Rooms revenue on a comparable hotel basis for leisure stays was up 2% globally. Business was up 3%, and groups were strongest, up 5%. In terms of system growth, we opened 14,600 rooms across 86 hotels in the quarter, more than double the same period last year, and with increases delivered in each region. This produced 7.1% gross growth year-on-year and 4.3% net growth, or 5%, excluding the Venetian removal. It is worth reminding that we typically experience seasonality in our system growth with relatively fewer openings and more removals in the first quarter of each calendar year. Year to date, net system growth was therefore flat, the same result as this time last year, but it was actually growth of 0.7% when excluding the Venetian removal. We expect that growth to ramp up through the rest of 2025, as is typical with our phasing. Turning to signings, we added nearly 26,000 rooms into our pipeline in the quarter, or over 20,000 when you exclude the Ruby acquisition. This level of signings was also well ahead of last year and led to a closing pipeline of 334,000 rooms, which is 9% more than a year ago and 3% more than the start of this year. Around 40% of organic signings were quicker-to-market conversions, reflecting the breadth and attractiveness of our brands and the benefits to owners of joining ISG's powerful enterprise. Let me pull out a few highlights for you. Garner, which we only launched around 18 months ago, has already reached 35 hotels open and a further 91 in the pipeline. Combined, that's 126 hotels, just under half of which are in the Americas, with the rest in EMEAA as we rapidly internationalize. There were also 10 openings across Vodko and Vignette in the quarter, as well as another 18 signings for these two brands. These were part of our strong performance in conversions, which also saw more than 30 other conversion signings across the rest of our brands. Once again, there was a strong development performance across our six luxury and lifestyle brands, with nearly 30 openings and signings combined. The Intercontinental brand was seven of these. We opened in Indianapolis, U.S., and in Monterrey, Mexico, and the five signings were in Nashville, two more in Greater China, and the two in EMEA were in Cambodia and India. This was another great quarter performance for this truly iconic global brand as we continue to penetrate established and new growth markets. On the point of growth markets, Saudi Arabia had five openings in the total quarter, India had six, and Japan had seven. Great progress in each of these target markets. And then when I look at our powerhouse brands and essentials, there were 24 openings for Express and 30 signings. This world-leading brand has an estate of over 3,200 hotels and a pipeline to add over 600 more. Hottie Inn itself has over 1,500 open and pipeline hotels with another 11 openings and 22 signings achieved in the quarter. The final point I make on development is reminding you of our completion of the acquisition of the Ruby brand in the quarter, which added 30 hotels to our pipeline. We are very excited about the potential of this premium urban lifestyle brand, and we've actually achieved two more signings just since the acquisition. So the year has gotten off to a strong start for development activity, as well as delivering a strong trading performance, even in a more volatile environment. And with that, let me now hand over to Michael, who will provide more color by region, and he will also detail for you that, though we are at an early stage, we are on track to meet current full-year consensus profit expectations.

Thanks, Ali. Starting with the Americas, where red par was up 3.5%, was also the growth rate for the U.S. Occupancy in the region was up 0.7 percentage points, and pricing remained robust. with rate growing by 2.4%. In terms of demand types, groups was the strongest, with comparable rooms revenue up year on year by 6%. Leisure revenue was also ahead by 2%, and business revenue was up by 4%. So, as with the global performance, there was growth in all three stay occasions. In 2-1 of this year, there was the benefit to March from the timing of Easter pulling forward some business travel, and this reversed in April. This is the opposite of the timing impacts last year. When we take the last eight weeks in aggregate, WebPAR has been broadly flat. We've also noted in today's statement, that the latest position of on-the-books revenue for comparable hotels across the balance of Q2, i.e., for May and June, is also broadly flat. Our confidence remains for growth beyond Q2, particularly when economic uncertainty subsides and when the industry's fundamental tailwinds prevail. And we already see on-the-books revenue ahead of last year for July and August. Going back to our performance for the first quarter compared to the U.S. industry, we are very satisfied when we look at it on a weighted chain scale basis. Taken together, this industry outperformance combined with growth across all demand drivers underlines our continued confidence of IHG's delivery in the region. In terms of system size in the Americas, we opened just over 4,000 rooms in Q1, a 30% increase on the same period last year. Albeit, as we've noted, Q1 is a seasonally small quarter for openings. This included 12 hotels across the Holiday Inn brand family, and there were also 12 more signed in the quarter. In total, we signed 4,500 rooms across the Americas, broadly in line with the first quarter of 2024. Further signings for Garner took the brand to almost 60 open and pipeline hotels in the region. Moving on now to our Europe, Middle East, Asia, and Africa region, which had another strong quarter, was well far up 5%. As with the Americas, this too was driven by both pricing and demand, with rate up 4% and occupancy up 0.6 percentage points. Looking at rep part performance across this diverse region, the UK was broadly flat, with continental Europe, which was up 5.6%, the Middle East up 6.2%, and East Asia and Pacific was up 6.8%. There was further benefit to the latter from inbound leisure travel from greater China. This helped even stronger rep our performance within that sub-region, such as 11% in Thailand and 12% in Japan. Over 6,000 rooms were opened in the quarter, almost six-fold more than the same quarter a year earlier. Within the 30 hotels open, there were 13 that were part of last ABLE's No Loan Hospitality Agreement. Another notable opening was the BOCO Xel Exeter Science Park, our first branded net zero carbon hotel. 12,900 rooms were signed into the pipeline in the quarter, which included 5,700 rooms from the acquisition of the Ruby brand. Of those 30 Ruby hotels, 20 are open and will start to be added in the ISG system from the second quarter, while 10 were in the Ruby pipeline at the time of the acquisition. Since then, a further two have already been signed, Copenhagen and Berlin. Within other signs, there were three more Gartners, including a flagship for the brand in Edinburgh Haymarket. And since the quarter end, we've also launched the brand in India with the first two signings in that country. Q1 was also another strong development period in Saudi Arabia with four signings in Regent, Vignette, BoCo, and Holiday Inn. Finally, moving on to Greater China, where REFAR was down 3.5%, which was similar to the previous quarter and an improvement on the 2024 overall REFAR performance. From here, there's an easing in the strong comparatives from the prior resurgent return of post-COVID travel demand. Travel has been occurring in the same volumes as the prior year, which is reflected in the occupancy holding up, though rate is down year on year. This included further impact from the increased outbound leisure travel, leading to Tier 2 to 4 cities being down 5.7%, whereas 10 Tier 1 cities were close to . Record-breaking momentum in development activity has continued. 4 400 rooms were opened in the quarter more than double the previous year with the milestone of 800 hotels open achieved there were 8 500 rooms signed in the quarter also well ahead of last year there's now three atwell suites in the pipeline since launching the brand a few months ago eight signings across luxury and lifestyle brands and of course express holiday inn and crown plaza all powered ahead with 28 signings between those three brands as we've noted in this morning's announcement we remain encouraged of further improvement to come and of the continued attractiveness of the long-term drivers for the region which are fueling development activity Last week, the Investors Relations team issued our eighth episode of IHG Checks In On, and this one featured a Greater China CEO, Daniel Aumer, and Chief Development Officer for the region, Ken Sun, talking more about the huge strengths and further opportunities for IHG in Greater China. Now, to update you on the share buyback, we are currently 36% of the way through the $900 million program announced in February. To date, this has reduced our share count this year by a further 1.9%. In concluding with some comments on consensus, as was said in the statement, whilst we are in an early stage in the financial year, we are on track to meet our current full-year profit expectations. We publish details of consensus on our website based on the visible alpha data service. This currently sees consensus for operating profit from reportable segments as $1,251,000,000. While spread part expectations may well come down a little from the current consensus of 2.3% growth for the year, we remain comfortable with the profit consensus. One thing to remind is that in 2025, we have a step up in ancillary fee streams as previously described. The incremental profit from loyalty point sales and from the new U.S. Co-brand credit card agreements should add around 130 basis points to our fee margin expansion. And then on top of that, there would be further margin progress from the positive operating leverage, given we expect fee revenues to be growing in excess of where we are controlling overheads growth. The profit consensus implies growth of 11% on 2024's results. And the adjusted earnings per share consensus, which is 497 cents, implies growth of 15%. This would result in another year of IHG delivering on our growth outlook. With that, I'll hand back to Ellie for closing comments.