IHG(US:IHG)2023-02-21 19:00Financial Data and Key Metrics Changes - Revenue for the year reached $1.8 billion, an increase of 33% compared to 2021, while operating profit grew by 55% to $828 million [15][9] - Adjusted EPS nearly doubled to $282.3, with an effective tax rate of 27%, down 4 percentage points from the previous year [16][9] - Adjusted free cash flow was $565 million, demonstrating the company's ability to convert over 100% of adjusted earnings into cash [49] Business Line Data and Key Metrics Changes - Underlying revenue from the fee business increased by 28%, with operating profit rising by 43% [16] - The company opened 269 hotels and signed 467, leading to a 4% year-on-year increase in the pipeline, which now represents 31% of the current system size [8] - The Americas region saw RevPAR increase by 29% compared to 2021, while the EMEAA region's RevPAR was up 93% year-on-year [21][46] Market Data and Key Metrics Changes - The Americas region surpassed 2019 levels in RevPAR by 9% in Q4, while the EMEAA region also achieved a 9% increase in the same quarter [7][46] - Greater China faced challenges due to COVID restrictions, but recent data showed a strong recovery with 300 million trips made during the Chinese New Year, nearing 90% of 2019 levels [7] - The underlying fee revenue in Greater China was down 18% against the prior year, reflecting a decline of 40% compared to 2019 [25] Company Strategy and Development Direction - The company aims to leverage its asset-light, fee-based business model to drive growth and shareholder value, with a focus on expanding its brand portfolio and enhancing technology and loyalty programs [30][31] - The addition of Iberostar Beachfront Resorts is expected to significantly enhance the company's offerings in the all-inclusive segment and drive high-quality fee streams [35][60] - The company is committed to balancing growth investments with operational efficiency, as evidenced by a 6.6 percentage point improvement in group fee margin [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of international, corporate, and group travel, particularly with the reopening of China as a significant tailwind [51][52] - The company anticipates that macroeconomic uncertainties may impact corporate travel budgets and leisure spending, but believes current industry tailwinds outweigh these headwinds [28][29] - The long-term growth drivers for the industry remain strong, with expectations for U.S. industry RevPAR to be 12% ahead of 2019 levels in 2023 [54] Other Important Information - The company announced a final dividend increase of 10% and a new share buyback program of $750 million to return capital to shareholders [9][50] - Capital expenditure for the year was $161 million, with a focus on long-term health and stability of core business infrastructure [11] - The company has invested over $1 billion annually in its enterprise platform, enhancing its technology and loyalty programs [31][56] Q&A Session Summary Question: What is causing the revenue drop despite RevPAR being up? - Management indicated that the revenue shortfall is due to various factors, including the construction side and pipeline growth being slower as projects ramp up post-restrictions [45] Question: Any slowdown in U.S. RevPAR and thoughts on the outlook? - Management acknowledged some recent softness in U.S. RevPAR but remains optimistic about the overall outlook, citing strong demand and recovery trends [72][73] Question: Is the company still targeting industry-leading net unit growth? - Management confirmed the aspiration for industry-leading growth, aiming for 4% to 5% net unit growth, contingent on market conditions, particularly in China [87][89]