Full Year 2025 InterContinental Hotels Group PLC Earnings Call - Q&A

February 17, 2026

Speaker #1: To withdraw your question, press star 1 again. When called upon to ask your questions, please use your device handset and ensure you are not on mute.

Speaker #1: Again, that is *star 1* to raise your hand, and I will now hand over to Elie Maalouf to introduce the Q&A session.

Speaker #2: Thank you, and welcome to this Q&A session. I'm Elie Maalouf, Chief Executive Officer of IHG Hotels and Resorts. Hopefully, you've all had a chance to watch the results presentation, which we made available at 7:00 a.m. UK time this morning.

Elie Maalouf: Thank you, and welcome to this Q&A session. I'm Elie Maalouf, Chief Executive Officer of IHG Hotels & Resorts. Hopefully, you've all had a chance to watch the results presentation, which we made available at 7:00AM UK time this morning. It featured myself and Michael Glover, our Chief Financial Officer. Michael and I are in different locations today. Michael is at our headquarters in Windsor, and I am currently with our business in the US, so do bear with us as we coordinate sharing the questions. Before we open the line to take the first questions, I will briefly summarize our excellent performance in 2025. Our RevPAR grew by 1.5%, reflecting the breadth of our geographic footprint, the depth of our brands, and the resilience of our operating model.

Speaker #2: We're featuring myself and Michael Glover, our Chief Financial Officer. Michael and I are in different locations today. Michael is at our headquarters in Windsor, and I am currently with our business in the US.

Speaker #2: So do bear with us as we coordinate sharing the questions. Before we open the lines to take the first questions, I will briefly summarize our excellent performance in 2025.

Speaker #2: Our RevPAR grew by 1.5% reflecting the breadth of our geographic footprint, the depth of our brands, and the resilience of our operating model. We delivered gross system growth of 6.6%, and net system growth of 4.7%, driven by outstanding development activity and record hotel openings.

Elie Maalouf: We delivered gross system growth of 6.6% and net system growth of 4.7%, driven by outstanding development activity and record hotel openings. We signed over 102,000 rooms across 694 hotels, a 9% increase over 2024, when excluding the Ruby acquisition in 2025 and the Novum Hospitality agreement in 2024. We expanded our fee margin by 360 basis points, driven by operating leverage and step ups in ancillary fee streams. EBIT grew 13% and adjusted EPS grew 16%, supported by the completion of 2025's $900 million share buyback. In summary, we made excellent progress on our strategic priorities, and we are confident in the strength of our enterprise platform and the attractive long-term growth outlook.

Speaker #2: We signed over 102,000 rooms across 694 hotels, a 9% increase over 2024 when excluding the Ruby acquisition in 2025 and the Novum Hospitality agreement in 2024.

Speaker #2: We expanded our fee margin by 360 basis points, driven by operating leverage and step-ups in ancillary fee streams. EBIT grew 13%, and adjusted EPS grew 16%, supported by the completion of 2025's $900 million share buyback.

Speaker #2: In summary, we made excellent progress on our strategic priorities, and we are confident in the strength of our enterprise platform and the attractive long-term growth outlook.

Speaker #2: Touching briefly on 2026, while it is very early in the year, we have seen—and are pleased with—the trading performance to date in all three regions.

Elie Maalouf: Touching briefly on 2026, while very early in the year, we have seen and are pleased with the trading performance to date in all three regions. We have also announced a new today, a new $950 million share buyback program and formally launched our latest brand, Notion Collection. And with that, let me turn it over to the operator to take the first question.

Speaker #2: We have also announced today a new $950 million share buyback program and formally launched our latest brand, Noted Collection. And with that, let me turn it over to the operator to take the first question.

Speaker #3: Thank you, Elie. And your first question comes from the line of Richard Clark of Bernstein. Please go ahead.

Operator: Thank you, Elie, and your first question comes from the line of Richard Clark of Bernstein. Please go ahead.

Richard Clarke: Hi, Elie. Hi, Michael. Thanks for taking my questions. If I'm allowed, I'll do three. I guess if I look back at 2025, if I was to strip out the cost savings and the boost on card revenues and points revenues, I think your EPS would have grown off algorithm about somewhere in the mid single digits. Appreciate it wasn't the best RevPAR year. If RevPAR doesn't play ball in 2026 or going forward, do you have other levers to pull to kind of make sure you hit your algorithm? I guess second question, you said a couple of times, Michael, that there's some key money that's been deferred into Q1 2026.

Speaker #4: Hi, Elie. Hi, Michael. Thanks for taking my questions. If I'm allowed, I'll do three. I guess, if I look back at 2025, if I was to strip out the cost savings and the boost on card revenues and points revenues, I think your EPS would have grown off algorithm about somewhere in the mid-single digits.

Speaker #4: Pre-shape wasn’t the best RevPAR year. If RevPAR doesn’t play ball in 2026 or going forward, do you have other levers to pull to kind of make sure you hit your algorithm?

Speaker #4: I guess, second question—you said a couple of times, Michael, that there's some key money that's been deferred into the first quarter of 2026. Just the scope of that, and whether that should make us quite optimistic about unit growth and, sort of, luxury unit growth in 2026.

Richard Clarke: Just the scope of that, and whether that should make us quite optimistic about unit growth, and sort of luxury unit growth in 2026. And then thirdly, I think there was your margins down in China. You made a comment about improving unit economics or owner returns in China. I guess Holiday Inn Express now a $22 RevPAR brand in China?

Speaker #4: And then, thirdly, I think there was your margins down in China. You made a comment about improving unit economics or owner returns in China.

Speaker #4: I guess Holiday Inn Express now has a 22 RevPAR brand in China. I don't think you'd open a 22 RevPAR brand in the US. So, do you need to improve those RevPAR numbers?

Michael Glover: ... I don't think you'd open a $22 RevPAR brand in the US. So do you need to improve those RevPAR numbers? Do you need to improve owner returns? Does the brand work at that level of RevPAR?

Richard Clarke: ... I don't think you'd open a $22 RevPAR brand in the US. So do you need to improve those RevPAR numbers? Do you need to improve owner returns? Does the brand work at that level of RevPAR?

Speaker #4: Do you need to improve owner returns? Does the brand work at that level of RevPAR?

Speaker #2: Thank you, Richard. I'll take the key money question first, and then I'll turn over the fee margin triangulation—while I'll touch on it briefly and hand over to Michael for some details.

Elie Maalouf: Thank you, Richard. I'll take the key money question first, and then I'll turn over the fee margin triangulation. Well, I'll touch on it briefly, then hand over to Michael for some details and turn over to him the margin question on China. So first on key money, as you saw in Michael's presentation, we have been very prudent and thoughtful deployers of capital across a range of places and manners in which we deploy capital, whether it's key money, recyclable, maintenance, and of course, our capital returns to shareholders. If you go back over an extended period of time, our capital has been fundamentally stable, up some years, down some years, because some of it's lumpy, but it's been pretty stable. While our revenues and profits have grown significantly, something we're very pleased with.

Speaker #2: And turn over to him the margin question on China. So, first on key money, as you saw in Michael's presentation, we have been very prudent and thoughtful deployers of capital across a range of places we—and manners in which we deploy capital—whether it's key money, recyclable, maintenance, and of course, capital returns to shareholders.

Speaker #2: If you go back over our extended period of time, our capital has been fundamentally stable—up some years, down some years—because some of it's slumpy.

Speaker #2: But it's been pretty stable while our revenues and profits have grown significantly—something we're very pleased with. But some of these investments, whether it's key money or whether it's recyclable, can be lumpy instead of happening towards the end of one year.

Elie Maalouf: But some of these investments, whether it's key money, whether recyclable, can be lumpy. Instead of happening towards the end of one year, they happen in the other. So we're flagging that some of it may roll over from 25 into 26, but then you never know what rolls over from 26 to 27. Nonetheless, we are confident in the growth track record that we have. Our 4.7 system size growth in 2025 is the fourth year of acceleration, our best in 6 years. Our signings were strong, as you can see, up 9%. Our pipeline grew 4.4%. Our openings were strong at 10%. And that just shows that we have a lot of firepower. Now we have more brands with Noted Collection being announced today.

Speaker #2: They may happen in the other. So we're flagging that some of it may roll over from '25 into '26, but then you never know what rolls over from '26 to '27.

Speaker #2: Nonetheless, we are confident in the growth track record that we have. Our 4.7% system size growth in 2025 is the fourth year of acceleration.

Speaker #2: Our best in six years. Our signings were strong. As you can see, up 9%. Our pipeline grew 4.4%. Our openings were strong at 10%.

Speaker #2: And that just shows that we have a lot of firepower. Now we have more brands. With Noted Collection being announced today, we're not putting a ceiling on our growth potential for 2026.

Elie Maalouf: We're not putting a ceiling on our growth potential for 2026. The consensus is 4.4. I would say there's more upside than downside to that number, but we're comfortable with it where it sits, and we think we have even more potential to continue to accelerate that system size growth. Michael will touch on the fee triangulation for 2025, before he takes on the China margin thing. Look, we have a lot of confidence in our trajectory in China. I've been saying for 2 years now that China is bottoming out, bottoming out gradually. It turned out to actually be true at some point, right? And we saw it gradually bottom out in 2025, quarter after quarter, turned positive in Q4.

Speaker #2: The consensus is 4.4. I would say there's more upside than downside to that number. But we're comfortable with it where it sits, and we think we have even more potential to continue to accelerate in system size growth.

Speaker #2: Michael will touch on the fee triangulation for 2025. Before he takes on the China margin thing—look, we have a lot of confidence in our trajectory in China.

Speaker #2: I've been saying for two years now that China is bottoming out gradually. It turned out to actually be true at some point, right? And we saw it gradually bottom out in 2025, quarter after quarter.

Speaker #2: Turned positive in the fourth quarter. Indications are that that will continue. In the first quarter of 2026 and into the year, we have a bigger system now with over 880 hotels open, over 550 under development, record signings and openings again.

Elie Maalouf: Indications are that that will continue in Q1 2026 and into the year. We have a bigger system now with over 880 hotels open, over 550 under development, record signings and openings again. The economics, at a general level, Michael will take you through the details. Our economics work across our brands. That's strong signing, strong performance, and strong openings of Express in China last year, where we keep the full economics. Economics work for our owners. Now, different tier markets have different, you know, rates, as you know. But because of the very strong openings that we have, that RevPAR is also influenced by the ramp up, right? Many of those hotels are new in the year in China. Express is our fastest growing brand.

Speaker #2: And the economics and the general level, Michael will take you through the details. Our economics work across our brands—that's strong signings, strong performance, strong openings of Express in China last year.

Speaker #2: Where we keep the full economics, economics work for owners. Now, different share markets have different rates, as you know. But because of the very strong openings that we have, that RevPAR is also influenced by the ramp-up, right?

Speaker #2: So many of those hotels are new this year in China. Express is our fastest-growing brand. It was our latest-growing brand too.

Elie Maalouf: It was our latest growing brand, too, the one that started growing the latest, because we started with Holiday Inn, Crowne Plaza, and InterContinental. So a lot of these brands are still in ramp up, and some of them, in fact, some of the hotels are still ramping up post-pandemic. So I think that that is influencing the RevPAR. If you look at the RevPAR in total in China, it's about half of where it is in the US, which, you know, is, is a good place to be for a GDP that's per capita; it's probably an eighth of what it is in the US, right? So you actually see leverage on the RevPAR from the GDP per capita.

Speaker #2: The one that started growing the latest, because we started with Holiday Inn and Grand Plaza and InterContinental. So a lot of these brands are still in ramp-up.

Speaker #2: And some of them, in fact, some of those hotels are still ramping up post-pandemic. So I think that that is influencing the RevPAR. If you look at the RevPAR in total in China, it's about half of where it is in the US.

Speaker #2: Which is a good place to be for a GDP that's per capita is probably an eighth of what it is in the US, right?

Speaker #2: So you actually see leverage on the RevPAR from the GDP per capita and economy that's growing at 5%. If technology sector that is actually competitive with the US technology sector, leaders in renewables, leaders in many industries, exports again at a record last year.

Elie Maalouf: An economy that's growing at 5%, a technology sector that, you know, is actually competitive with the US technology sector, leaders in renewables, leaders in many industries. Exports, again, at a record last year. We're confident in the Chinese economy. We're confident in our business in China. We're confident in how our hotels are going to perform in China. Michael, over to you.

Speaker #2: We're confident in the Chinese economy. We're confident in our business in China. We're confident in how our hotels are going to perform in China. Michael, over to you.

Speaker #1: Thanks, Elie. Yeah, let me—Richard, let me first go to your first question on kind of 2025 and earnings per share without the ancillaries and cost savings.

Michael Glover: Thanks, Ellie. Yeah, let me, Richard, let me first go to your first question on kind of 2025 and earnings per share, without the ancillaries and cost savings. I guess the first thing I would say there is the ancillaries are not going to stop growing. And so, if you look at what we've said, kind of moving forward, while we don't have the step-ups next year, we do see strong growth there and at a rate, in the double digits above 10%. So we do still see that, moving forward. The second thing around cost, you know, obviously, you know, we've talked about this a bit at the half year.

Speaker #1: I guess the first thing I would say there is the ancillaries are not going to stop growing . And so if you look at what we've said , kind of moving forward , while we don't have the step ups next year , we do see strong growth there .

Speaker #1: And at a rate in the double digits above 10% . So we do still see that moving forward . The second thing around cost , you know , obviously , you know , we've talked about this a bit at the half year .

Speaker #1: You know, when Lee and I came in, we really started to focus and look at how we could look at this cost base and how we could change the curve and change, and really be able to take more dollars of revenue to the bottom line.

Michael Glover: You know, when Elie and I came in, we really started to focus and look at how we could look at this cost base and how we could change the curve and really be able to take more dollars of revenue to the bottom line. And obviously, you've seen us do that in 2025, with costs being down about 3%. Now, next year, we're in 2026, what we're looking at is that being coming back and being around an increase of 1%, but still having some of that savings come through that we've been doing with our programs. And so we still feel like we'll have strong cost control as we move into 2026.

Speaker #1: And obviously , you've seen us do that in in 2025 , with costs being down about 3% . Now , next year we're in 2026 .

Speaker #1: What we're looking at is that being coming back and being around an increase of 1%, but still having some of that savings come through that we've been doing with our programs.

Speaker #1: And so we still feel like we'll have strong cost control as we move into 2026. And then I think the other thing that we also mentioned at the half year was really around the fee triangulation, where I think we talk about, and many of you will know, where you look at rupture and system size and look at then the revenue growth. And we mentioned kind of a few things that were really impacting us in 2025.

Michael Glover: And then I think the other thing that we also mentioned at the half year was really around the fee triangulation, where I think we talk about, and many of you will know, where you look at RevPAR and system size and look at then fee revenue growth. We mentioned kind of a few things that were really impacting us in 2025. First and foremost, which is really a good thing, is that we've had record number of openings, and obviously as those hotels open, they, they're not fully ramped, so you don't get the fee income as quickly as you would normally, because you're actually accelerating those openings. So it's not normalized yet year-over-year, and so you're having a bit of that impact in there as well.

Speaker #1: First and foremost , which is a really is a good thing , is that we've had record number of openings . And obviously as those hotels open , they're not fully ramped .

Speaker #1: So you don't get the fee income as quickly as as you would normally , because you're actually accelerating those openings . So it's not normalized yet year over year .

Speaker #1: And so you're having a bit of that impact in there as well . We also mentioned we have a large number of hotels under renovation that obviously has a fee impact , as those hotels close and renovate .

Michael Glover: We also mentioned we have a large number of hotels under renovation. That obviously has a fee impact as those hotels close and renovate and then come open again. And then the third thing was we mentioned at the half year was that we had a few large exits, particularly, you know, two hotels in New York, where the replacement hotel hasn't come in, but will be coming in and ramping up soon. So that's affected that fee triangulation and fee growth in the Americas. So we expect that to normalize as we move into this year and not have some of those effects. The other effect is you have, you know, the Novum hotels who came in and are in the process of ramping up.

Speaker #1: And then come open again . And then the third thing was we mentioned at the half year was that we had a few large exits , particularly , you know , two hotels in New York where they replacement hotel hasn't come in but will be coming in and ramping up soon .

Speaker #1: So that's , that's affected that fee triangulation and fee growth in the Americas . So we expect that to normalize as we move in into this year and not have some of those effects .

Speaker #1: The other effect is you have , you know , the hotels who came in and are in the process of ramping up . That was a large impact as they because a large set of hotels have come in over the last year or so and then , you know , some smaller things like you had one less day with a leap year this year .

Michael Glover: That was a large impact, because a large set of hotels have come in over the last year or so. And then, you know, some smaller things, like you had one less day with leap year this year. So a few smaller things there. I think we feel confident over the medium to long term, we can still get back to our growth algorithm, and that's still gonna grow. I think what we showed this year is really the breadth of our organization and how we can actually, even in a turbulent time, as we've said, we can still deliver that growth algorithm, and we feel confident that we can continue to do that. And, I'll just add to Elie's key money point.

Speaker #1: So, a few smaller things there. I think we feel confident over the medium to long term. We can still get back to our growth algorithm.

Speaker #1: And that's still going to grow . I think what we showed this year is really the breadth of our organization , organization and how we can actually , even in a turbulent time , as as we've said , we can still deliver that growth algorithm and we feel confident that we can continue to do that .

Speaker #1: And just I'll just add to Elise , key money point . You know , it is lumpy and and certainly we have not changed that guidance at all that we're going to be in that 200 to 250 million range .

Michael Glover: You know, it is lumpy, and certainly we have not changed that guidance at all, that we're gonna be in that GBP 200 to 250 million range, so same as what we said last year. And that overall capital will, will, be around that GBP 350 million a year mark. So we'll continue with that guidance and view there. In terms of China, the margin was down very slightly, and, but yet overall profit was still up by GBP 1 million. So overall, a good result in a year where you had RevPAR negative.

Speaker #1: So, same as what we said last year, that overall capital will be around that $350 million a year mark. So we'll continue with that guidance.

Speaker #1: And view there in terms of China, the margin was down very slightly, but yet overall profit was still up by $1 million.

Speaker #1: So overall a good result in a year where you had read Pas negative . And so I think as we go forward , you know , we've talked about and been saying for quite some time that China Repar is bottoming out and we really saw that happen throughout the year with the fourth quarter actually turning positive , 1.1% .

Michael Glover: I think as we go forward, you know, we've talked about and been saying for quite some time that China RevPAR is bottoming out, and we really saw that happen throughout the year with the fourth quarter actually turning positive 1.1%. As Elie mentioned, we're really pleased with how RevPAR is starting to shape up in Q1. You know, we mentioned last year at the Q3 announcements, we felt like Q4 could, or sorry, Q1 into 2026 might look negative because of, you know, some of the tougher comps. As we sit here today, it looks like all three regions will be positive, and that includes China. So, you know, early trading indicating that it looks good.

Speaker #1: And as Ellie mentioned , we're really pleased with how Repar is starting to shape up in Q1 . You know , we mentioned last year at the at the Q3 announcements , we felt like Q4 could or sorry , Q1 into 2026 might look negative because of , you know , some of the tougher comps as we sit here today , it looks like all three regions will be positive .

Speaker #1: And that includes China . And so , you know , early trading indicating that it looks good . So let me pass back to Ellie and just see if he wants to add anything on there .

Michael Glover: Let me pass back to Elie and just see if he wants to add anything on there.

Speaker #2: No Michael that was great . And I just on those factors affecting the fee triangulation for 2025 . Just note that most of those are positive things , right ?

Elie Maalouf: No, Michael, that was great. And I just... On those factors affecting the fee triangulation for 2025, just note that most of those are positive things, right? First, you know, strong openings, way above the prior years, renovations, then all those other factors, whether it was a leap year or whatever, all those we start to comp against in a better way. So there were good factors in one end, and then, and then they become tailwinds as we go forward. Thank you, Richard.

Speaker #2: So you know , strong openings way above the prior years renovations . Then all those other factors , whether it was a leap year or whatever , all those we start to comp against in a better way .

Speaker #2: So they were good factors on one end, and then they become tailwinds as we go forward. Thank you, Richard.

Speaker #3: And your next question comes from the line of Jafar, Mystery of BNP Paribas. Please go ahead.

Operator: Your next question comes from the line of Jafar Mesteri of BNP Paribas. Please go ahead.

Speaker #4: Hi . Good morning . I have two of those . Okay . The first one is just on the fee business overheads . Those $23 million of cost efficiencies in 25 .

Jaafar Mestari: Hi, good morning. I have two, if that's okay. The first one is just on the fee business overheads. Those $23 million of cost efficiencies in 2025, should we assume they were broad-based across the three regions, across central costs? Or was the restructuring this year particularly targeted in one region? Thinking specifically Americas, were you able to flex the costs more in response to what's been a turbulent year? And then on credit card fees and ancillary fees in general, when you announced your two big renegotiations 18 months ago, loyalty point sales and then credit card fees, you were the only major global company to have something of that materiality going on, really.

Speaker #4: Should we assume they were broad-based across the three regions, across central costs? Or was the restructuring this year particularly targeted in one region?

Speaker #4: I'm thinking specifically Americas . Were you able to flex the costs more in response to what's been a turbulent year ? And then on credit card fees and ancillary fees in general , when you announced your two big renegotiations 18 months ago , loyalty point sales and then credit card fees , you were the only major global company to have something of of that materiality going on .

Speaker #4: Really , it looks like you were closing the gap with us peers who had historically more material contribution from those . And it's great that you're able to to to have a bit of a mark to market with , with issuers that you're much stronger today , etc.

Jaafar Mestari: It looked like you were closing the gap with US peers who had historically more material contribution from those, and it's great that you're able to have a bit of a mark to market with issuers, that you're much stronger today, et cetera. But since then, we've now seen Hyatt last November, and then, Marriott just last week, also announced their own major renegotiations, big explicit millions of dollars targets for increases in fee contributions over the next few years. My question is, once everyone's fully ramped up, you've had your step-up, it will continue to grow. They will have their step up in the next 12, 18 months. When everyone's fully ramped up, where do you think that gap will be? Because historically, you were saying, "Well, we're a bit behind.

Speaker #4: , but since then we've , we've now seen higher last November and then Marriott just last week also announced their own major renegotiations , big explicit millions of dollars targets for for increases in fee contributions over the next few years .

Speaker #4: And my question is once once everyone's fully ramped up . So you're you've had your step up . It will continue to grow .

Speaker #4: They will have their step up in the next 12 to 18 months when everyone's fully ramped up. Where do you think that gap will be?

Speaker #4: Because historically you were saying , well , we're a bit behind . We can convince issuers and increase that and catch up . Where do you think that will be ?

Jaafar Mestari: We can convince issuers and increase debts and catch up. Where do you think that will be? Will the gap have closed over 36 months as everyone gets their renegotiations, or will it have just translated your level of ancillaries and their level of ancillaries, please?

Speaker #4: Will the gap have closed over 36 months as everyone gets their renegotiations, or will it have just translated your level of ancillaries and their level of ancillaries?

Speaker #4: Please

Speaker #2: Thank you . Let me take those questions and Michael , of course , jump in and build on on that . So on the fee business costs , I think we just have to pull back and touch on what Michael said in his presentation earlier , what he mentioned when speaking to Richard's questions .

Elie Maalouf: ... Jafar, let me take those questions, and Michael, of course, jump in and build on that. So on the fee business costs, I think we just have to pull back and touch on what Michael said in his presentation earlier, what he mentioned when speaking to Richard's questions. We've always maintained a highly disciplined approach to cost management. If you look in the presentation, you know, our cost growth over a long period of time has been well below revenue and profit growth.

Speaker #2: We've always maintained a highly disciplined approach to cost management. If you look in the presentation, you know, our cost growth over a long period of time has been well below revenue and profit growth.

Speaker #2: But since Michael and I came in , we've taken a more philosophical view of how do we just shape the whole cost structure for the future , make it future ready , scalable , using technology in your processes , shared services , locations and now artificial intelligence so we can continue in the future to grow revenues and profits at a much higher gradient than cost .

Elie Maalouf: But since Michael and I came in, we've taken a more philosophical view of how do we just shape the whole cost structure for the future, make it future-ready, scalable, using technology, new processes, shared services, locations, and now artificial intelligence, so we can continue in the future to grow revenues and profits at a much higher gradient than cost. This was not a reaction to last year because actually, we started our work, our strategic work, when he and I assumed our positions in 2023, and it took some time to redesign it strategically. We had outside help. We had inside teams. We had a long, you know, runway of work that we started deploying in 2024. You saw our cost growth in 2024 be only 1%.

Speaker #2: This was not a reaction to last year because actually we started our work , our strategic work when he and I assumed our positions in 2023 and it took some time to really design it strategically , we had outside help .

Speaker #2: We had inside teams , we had a long , you know , runway of work that we started deploying in 2024 . You saw our cost growth in 2024 be only 1% .

Speaker #2: Then you saw cost reduction of up to -3% in 2025 . So there's been a trajectory of us bringing in these initiatives in a thoughtful , strategic way , not a reaction to a market that was up or a market that was down .

Elie Maalouf: Then you saw, cost reduction of, up to -3% in 2025. So there's been a trajectory of us bringing in these initiatives in a thoughtful, strategic way, not a reaction to a market that was up or a market that was down. It's just really reshaping our cost base and our processes and our technology and taking advantage of new technologies like AI. So that is generally how we achieved the, the benefits of 2024 +1, 2025 -3, and we're saying that going forward, low or very low single digits is what would happen on average. It could be a little bit different from year to year, but, we're not actually done with the opportunities in cost efficiency as technology continues to give us more opportunity.

Speaker #2: It's just a really reshaping our cost base . And our processes and our technology and taking advantage of new technologies like AI . So that is generally how we achieved the benefits of 2024 plus one 2025 , minus three .

Speaker #2: And we're saying that, going forward, low or very low single digits is what would happen on average. It could be a little bit different from year to year, but we're not actually done with the opportunities in cost efficiency as technology continues to give us more opportunity on the credit card fees.

Elie Maalouf: On the credit card fees, look, I won't comment on what others have renegotiated, are renegotiating, will renegotiate. Those are questions for them, and we don't have the particulars of all their arrangements or where they plan to be in the future. What we do know is, we have a lot of upside and a lot of exciting upside. Maybe the most upside, I don't know about other businesses, but we believe we have a lot or maybe the most upside in the industry. And we started delivering that in 2025 by doubling the fees and credit cards earned from 2023, and then we, you know, continue to be on the right track to triple it by 2028. We're not putting a ceiling on it whatsoever.

Speaker #2: Look , I won't comment on what others have renegotiated are . Renegotiating will renegotiate . Those are questions for them . And we don't have the particulars of all their arrangements or where they plan to be in the future .

Speaker #2: What we do know is we we have a lot of upside and a lot of exciting upside . Maybe the most upside , I don't know about other businesses , but we believe we have a lot .

Speaker #2: Or maybe the most upside in the industry. And we started delivering that in 2025 by doubling the fees and credit cards earned from 2023.

Speaker #2: And then we , you know , continue to be on the right track . To triple by 2028 . We're not putting a ceiling on it whatsoever .

Speaker #2: We think it continues to grow from there . And I think that the as we grow our system , number of hotels , as we grow our membership in IG won awards is now 160 million members at a fast growth rate from 145 .

Elie Maalouf: We think it, it continues to grow from there, and I think that the as we grow our system, number of hotels, as we grow our membership, and IHG One Rewards is now 160 million members, at a fast growth rate from 145. As we grow the engagement of our guests, it's not really how many members you have, it's how engaged they are. And now we're at 66% of our members constituting, you know, our nightly stays, 72, 73 in the United States. So we're right up there in the industry. So we've got more members, they're more engaged, they're spending more, they're taking out more credit cards. Our sign-ups are up double digits for cards, and that is all fueling, you know, our growth in card fees, and that will continue.

Speaker #2: As we grow the engagement of our guests , it's not really how many members you have . It's how engaged they are . And now we're at 66% of our members constituting , you know , our nightly stays , 72 , 73 in the United States .

Speaker #2: So we're right up there in the industry . So we've got more members there , more engaged . They're spending more . They're taking out more credit cards .

Speaker #2: Our signups are up double digits for cards. And that is all fueling, you know, our growth in card fees. And that will continue.

Speaker #2: We don't see a ceiling to it. How it compares to others? I'm confident it will compare very favorably to others, and, frankly, the more potential others reveal, the higher our ceiling goes.

Elie Maalouf: We don't see a ceiling to it. How it compares to others? I'm confident it will compare very favorably to others. And frankly, the more potential others reveal, the higher our ceiling goes. So I'm not, I'm not discouraged by what others are doing. In fact, it encourages me. Super. Thank you.

Speaker #2: So I'm not I'm not discouraged by what others are doing . In fact , it encourages me .

Speaker #4: Super . Thank you .

Speaker #1: Ellie , can I just . . Yeah , let me .

Michael Glover: Eli, can I just,

Elie Maalouf: Michael, do you want to come in on the credit card?

Michael Glover: Yeah, let me just-- Yeah, let me, let me jump in on both of those, actually. And, and Jafar, you know, great question on the overheads, and Elie mentioned it is broad-based, but he also mainly covered the P&L. And I'd say we've also done this within the system fund as well, because that gives us more firepower as well. And so actually, in terms of total dollars, we've saved more as a part of this program in the system fund than we have in the P&L, which is actually great because it allows us to reinvest and go after things that drive revenue. And, and then if you look at kind of by region and it being broad-based, it was across every region and every function within IHG, but we also had investment, and I think that's important to note as well.

Speaker #5: Just .

Speaker #1: Yeah . Let me let me jump in on both of those actually . And and you know , great question on the overheads .

Speaker #1: And Elie mentioned it is broad-based, but he also mainly covered the P&L. And I'd say we've also done this within the system fund as well, because that gives us more firepower as well.

Speaker #1: And so, actually, in terms of total dollars, we've saved more as a part of this program in the System Fund than we have in the P&L, which is actually great because it allows us to reinvest and go after things that drive revenue.

Speaker #1: And then, if you look at it kind of by region, and being broad-based, it was across every region and every function within ISG.

Speaker #1: But we also had investment . And I think that's important to note as well . Certainly , you know , we had the investment about integrating Ruby come in in the Ma .

Michael Glover: Certainly, you know, we had the investment about integrating Ruby coming in the MEAA. That's why you might see some of the cost a little, not as, not as, as much down in MEAA. Actually, I think it was slightly, slightly up. But we're also investing in places like India, and I think that's really important, that it's not just about cost, cost reduction, it's about investing our dollars where we can get the most growth in the future and repurposing those dollars. And that's what we want to do because we've said many, many times our biggest risk is not capturing our share of that growth in the future because this is a growth industry. It's an industry that's going to achieve higher highs and higher lows, and we want to be a part of that.

Speaker #1: That's why you might see some of the the costs a little , not as not as as much down in EMEA actually . I think it was slightly , slightly up .

Speaker #1: But we’re also investing in places like India, and I think that’s really important—that it’s not just about cost reduction. It’s about investing our dollars where we can get the most growth in the future and repurposing those dollars.

Speaker #1: And that's what we want to do, because we've said many, many times our biggest risk is not capturing our share of that growth in the future, because this is a growth industry.

Speaker #1: It's an industry that's going to achieve higher highs and higher lows, and we want to be a part of that. We want to participate.

Michael Glover: We want to participate. We want to compete in that. On the credit card fees, the only thing I'd add there is we're – we announced a new credit card, Revolut, a deal here in the UK with Revolut. We have more countries we can go to. Now, it doesn't bring the quantum for sure that the US does, and it's much smaller, but that just shows the power of the loyalty program as it grows. We have more opportunity in different countries around the world to continue to launch that. It's great to launch one here in the UK, and we're in the process of launching others around the world, and as we get those agreements done, we'll let you know about them.

Speaker #1: We want to compete in that . On the credit card fees . The only thing I add there is we announced a new credit card , Revolut , a deal here in the UK .

Speaker #1: With Revolut , we have more countries we can go to now . It doesn't bring the quantum for sure that the US does , and it's much smaller , but that just shows the power of the loyalty program as it grows .

Speaker #1: We have more opportunity in different countries around the world to continue to launch that. It's great to launch one here in the UK, and we're in the process of launching others around the world.

Speaker #1: And as we get those agreements done, we'll let you know about them. I'll pass it back to you, Ali, or—

Elie Maalouf: Thank you.

Michael Glover: I'll pass it back to you, Elie, or the-

Elie Maalouf: ... Thank you, Michael. Thank you, Jeffrey. I'll just add that in addition to credit cards and our ancillaries, let's not forget our point sales business, which grows very nicely and also has no ceiling to it, and our emerging and rapidly growing branded residences, all of which you know, are high margin accretive to our bottom line. Next question.

Speaker #2: Thank you , Michael . Thank you Jennifer . I'll just add that in addition to credit cards and our ancillaries , let's not forget our point sales business , which grows very nicely and also has no ceiling to it .

Speaker #2: And our emerging and rapidly growing branded residence fees, all of which, you know, are high-margin and accretive to our bottom line.

Speaker #2: Next call, next question.

Speaker #3: Yeah, next question comes from the line of Jamie Rollo of Morgan Stanley. Your line is open.

Operator: Yeah, next question comes from the line of Jamie Rollo of Morgan Stanley. Your line is open.

Speaker #6: Thanks . Morning , everyone . Three questions to please . First , just on that branded residence income . I don't think you've quantified it yet .

Jamie Rollo: Thanks. Morning, everyone. Three questions, too, please. First, just on that branded residence income, I don't think you've quantified it yet. I know you've got 30 projects, both open and in the pipeline, but what did those generate for you last year? And when you say substantial increase in 2027 and beyond, could you sort of give us some numbers behind that, please? Secondly, on the removals rate, I think it was 1.9% ex The Venetian. Should we expect that to fall back towards sort of 1.5%, this year? Is that, is that what's giving you confidence to the upside, to the consensus, 4.4% net unit growth?

Speaker #6: I know you've got 30 projects, both open and in the pipeline, but what do those generate for you? Last year?

Speaker #6: And when you say substantial increase in 27 and beyond , could you give us some numbers behind that , please ? Secondly , on the removals rate , I think it was 1.9% extra Venetian .

Speaker #6: Should we expect that to fall back towards sort of 1.5% this year ? Is that is that what's giving you confidence to the upside , to the consensus 4.4% net unit growth ?

Speaker #6: And then just coming back , if I may , on the sort of gap between the comparable and the total rev par . And then looking at the fees , you've got to helpful slide on on slide 56 .

Jamie Rollo: And then just coming back, if I may, on the sort of gap between the comparable and the total RevPAR, and then looking at the fees. You've got a helpful slide on slide 56. So there's about a 2-point gap between comparable and total RevPAR, and there's also another couple of points in the three regions, between underlying fee income and the sum of total RevPAR and available rooms. Are you saying that those timing issues mean that those negative figures turn positive this year or at some point in the future, just to sort of clarify the algorithm? Thank you.

Speaker #6: So there's about a two point gap between comparable and total rev par . And there's also another couple of points in the three regions between underlying fee income and the sum of of of of of total rev par and available rooms .

Speaker #6: Are you saying that those timing issues mean that those negative figures turn positive this year, or at some point in the future? Just to clarify—the algorithm, thank you.

Speaker #2: Thank you, Jamie. I'll take Brandon Residences removals. I'll turn over the fee income to Michael, and anything else he wants to build on.

Elie Maalouf: Thank you, Jamie. I'll take branded residences, removals. I'll turn over the fee income to Michael and anything else he wants to build on. So look, branded residences, we're very excited about that business. You know, it builds on the power of our luxury and lifestyle portfolio. It just keeps growing with the six brands we have now, mainly the ultra-luxury brand, Six Senses and Regent. I mean, just let me just give you an anecdote. I've already been to six countries. It's not even mid-February yet, and it is just mid-February. And I was in Bangkok early this month, late last month, and we have an InterContinental Residences project that had just started sales in the heart of the city. In December, I was speaking to the owner. They were 40% sold by mid-January. They raised prices four times.

Speaker #2: So, look, branded residents were very excited about that business. You know, it builds on the power of our luxury lifestyle portfolio that just keeps growing.

Speaker #2: With the six brands we have now , mainly the ultra luxury brands , Six Senses and Regent . I'm just let me just give you an anecdote .

Speaker #2: I was I've already been to six countries . It's not even mid-February yet . And or it is just in February . And I was in Bangkok early this month , late last month , and we have an intercontinental Residences project that had just started sales in the heart of the city in December .

Speaker #2: Speaking to the owner, they were 40% sold by mid-January, and they raised prices four times. He told me that they'll raise prices again to slow the sales down.

Elie Maalouf: I told them they have to raise prices again to slowly sales down. So, and that's InterContinental, not even Regent and Six Senses, where we have most of our projects. So there's more coming across more brands. Yes, we have 30 projects today. We have many more that are going into the sales phase. There in London, you know, when Six Senses London is opening this coming month, the branded residences are all sold out, or maybe there's one left, I understand. Up to now, I'd say the fees range have not been that material. It's been $5 to 10 million. However, we see substantial increase in that starting in 2027 and beyond. So again, we're not putting a ceiling on that. We think it's totally accretive, and we're very excited about where it's going.

Speaker #2: So, and that's InterContinental. It's not even Regent and Six Senses, where we have most of our projects. So, there's more coming across, more brands.

Speaker #2: Yes , we have 30 projects today . We have many more that are going into the sales phase . They're in London . You know , when success is London is opening this coming month .

Speaker #2: The branded residences are all sold out . Or maybe there's one left . I understand Up to now , I'd say the fees range have not been that material has been 5 to 10 million .

Speaker #2: However, we see a substantial increase in that starting in 2027 and beyond. So again, we're not putting a ceiling on that.

Speaker #2: We think it's totally creative, and we're very excited about where it's going on the removals rate. Yes, we're confident it will go back towards the 1.5% over the next few years.

Elie Maalouf: On the removals rate, yes, we're confident it will go back towards the 1.5%, over the next few years. There was just a lot of lumpiness going on right now, especially in China, as things normalize post-pandemic, but we see a path to clearly back to the 1.5%. I don't think that's the only thing that can give us; it is one thing, but I don't think it's the only thing that can give us more upside in 2026. The strength of our signings, the strength of our brand portfolio, the proven, you know, enterprise to get more openings going, whether it's conversion or even new build, all of that put together gives us more confidence in our system growth over the medium to long term.

Speaker #2: There was just a lot of lumpiness going on right now , especially in China , as things normalize post-pandemic . But we see a path to clearly back to the 1.5% .

Speaker #2: I don't think that's the only thing that can give us. It is one thing, but I don't think it's the only thing that can give us more upside in 2026.

Speaker #2: The strength of our signings , the strength of our brand portfolio , the proven , you know , enterprise to get more openings going , whether it's conversion or even new build , all of that put together gives us more confidence in our system growth over the medium to long term .

Speaker #2: The yes , there's opportunity also in lower removals , but that's not that's not the primary thing . It's the combination of everything .

Elie Maalouf: Yes, there's opportunity also in lower removals, but that's not, that's not the primary thing. It's a combination of everything. Michael, if you want to build on those and answer the question on fee income.

Speaker #2: Michael, if you want to build on those and answer the question on fee income.

Speaker #1: Yeah , sure . I mean , I was going to say the similar on the net system size . I mean , we've been saying , you know , consensus is at 4.4% for next year .

Michael Glover: Yeah, sure. I mean, I was gonna say the similar on the net system size. I mean, we've been saying, you know, consensus is at 4.4% for next year. We certainly feel like there's more opportunity on the upside of that than there is risk to the downside as we move into the year based on the visibility we have. And really, you know, Jamie, it's not just about removals coming down, which we do believe they will. It's really about those openings and how things are proving out. And what we look at, we see really strong growth across EMEA and China. You saw that in our results this year.

Speaker #1: We certainly feel like there's more opportunity on the upside of that than there is risk to the downside . As we move into the year , based on the visibility we have and really , you know , Jamie , it's not just about removals coming down , which we do believe they will .

Speaker #1: It's really about those openings and how things are proving out and what we look at. We see really strong growth across EMEA and China.

Speaker #1: You saw that in our results this year . You know , we see exclude the Venetian , the US at 1.5% were on the right track record or the Americas at 1.5% were on the right track there .

Michael Glover: You know, we see, if exclude The Venetian, the US at 1.5%, we're on the right track record, or the Americas at 1.5%, we're on the right track there. So I think we feel confident in that, and that's why we're willing to say and, that there's more opportunity to the upside to that 4.4%. And then when you look back, and on your third question regarding the table in the chart, in the presentation, thank you. We thought that would be helpful. It is helpful, but it also goes back to what we talked about earlier and the reason for that total RevPAR being less than the comparable RevPAR, particularly the ramp-up of hotels.

Speaker #1: So I think we feel confident in that, and that's why we're willing to say that there's more opportunity to the upside to that 4.4%.

Speaker #1: And then when you look back and on your third question regarding the the table in the chart , in the presentation , thank you .

Speaker #1: We we thought that would be helpful . It is it is helpful . But it also goes back to what we talked about earlier .

Speaker #1: And the reason for that total repar being less than the comparable repar , particularly the ramp up of hotels . So it takes it takes , you know , some time for hotels once they open to build that base business and then begin to yield as you open more hotels and we have that acceleration and openings , you've got more hotels in that as a percentage of your system than you used to have .

Michael Glover: So it takes, you know, some time for hotels once they open, to build that base business and then begin to yield. As you open more hotels, and we have that acceleration in openings, you've got more hotels in that as a percentage of your system than you used to have. And so that's affecting that. You also have the renovation effect. There's also, you know, of course, the leap year effect, but then also the mix effect of when as hotels are opening around the world. So, I think over time, yeah, that gets back and that normalizes. We're gonna still open as many hotels as we can. So, we wanna continue that as you see that acceleration. And really, you go back to Elliot's point of us growing our system size over the last four years.

Speaker #1: And so that's affecting that . You also have the renovation effect . There's also , you know , of course , the the leap year effect , but then also the mix effect of when as hotels are opening around the world , so I think over time , yeah , that gets back in that normalizes .

Speaker #1: We're going to still open as many hotels as we can . So we want to continue that . As you see that acceleration and and really you go back to Ellie's point of us growing our system size over the last four years .

Speaker #1: It just puts more openings in there, and more hotels ramping up as a percent of the system size versus what we used to have.

Michael Glover: It just puts more openings in there and more hotels ramping up as a percent of the system size versus what we used to have. And so I do think that normalizes over time, and we get to a better position. And I'll pass back to Elliot if there's anything else.

Speaker #1: And so I do think that normalizes over time, and we get to a better position. And I'll pass back to Elie if there's anything else.

Speaker #2: Thank you, Jamie. Next caller.

Elie Maalouf: Thank you, Jamie. Next, caller.

Speaker #3: And your next question comes from the line of Ricardo Benavides Fratus of Santander. Please go ahead.

Operator: Your next question comes from the line of Ricardo Benavides Freitas of Santander. Please go ahead.

Speaker #7: Thank you very much . Two questions from my end . Firstly , on the brand portfolio , we've seen , you know , these two recent additions to your collections brand portfolio .

Ricardo Benavides Freitas: Thank you very much. Two questions from my end. Firstly, on, on the brand portfolio, we've seen, you know, these two recent additions to your collections, brand portfolio, right? What I wanted to ask is, what other thematics, let's say, are you willing to approach on, on further, further brand acquisitions or entering? Is it more collections or any, any other specific theme? And I wanted to ask you regarding, I mean, you've had a very strong cash flow generation this year. Your net debt seems to be very under control. Why not a bit more, allocated towards your share buyback program? Thank you.

Ricardo Benavides: Thank you very much. Two questions from my end. Firstly, on, on the brand portfolio, we've seen, you know, these two recent additions to your collections, brand portfolio, right? What I wanted to ask is, what other thematics, let's say, are you willing to approach on, on further, further brand acquisitions or entering? Is it more collections or any, any other specific theme? And I wanted to ask you regarding, I mean, you've had a very strong cash flow generation this year. Your net debt seems to be very under control. Why not a bit more, allocated towards your share buyback program? Thank you.

Speaker #7: Right . What I wanted to ask is what other thematics , let's say are you willing to approach on on further further brand acquisitions or entering ?

Speaker #7: Is it more collections or any , any other specific theme ? And I wanted to ask you regarding I mean , you've had a very strong cash flow generation this year .

Speaker #7: Your net debt seems to be very under control. Why not allocate a bit more towards your share buyback program? Thank you.

Speaker #2: Thank you, Ricardo. I'll take the two questions, and Michael, you can build on the cash generation and leverage if you wish.

Elie Maalouf: Thank you, Ricardo. I'll take the 2 questions, and Michael, you can build on the cash generation and leverage, if you wish. Look, obviously, we don't comment on what else we're going to launch until we launch and tell you, like today. And so actually, we indicated this collection in Q3, and we just named it today and formally launched, and we're very excited about it, reaching out at 50 hotels. We're starting in EMEA with Vignette Collection, really, because EMEA has the largest percentage of unbranded hotels, and we've typically launched our collection and conversion brands in EMEA before going east and west from there. So that's the future of the brand, it won't be just in EMEA, but it'll go east and west, but establish itself in EMEA first.

Speaker #2: The look , obviously we don't comment on on what else we're going to launch until we launch and tell you like today . And so actually we we indicated this collection in Q3 and we just named it today and formally launched .

Speaker #2: And we're very excited about it reaching our 50 hotels. We're starting in EMEA with Noted Collection, really because EMEA has the largest percentage of unbranded hotels.

Speaker #2: And we typically launched our collection and conversion brands in EMEA before going east and west from there. So, that's the future of the brand—it won't be just in NEA, but it’ll go east and west.

Speaker #2: But establish itself in EMEA first. We do look at M&A from time to time, as you know, and we did the Ruby acquisition last year.

Elie Maalouf: We do look at M&A from time to time, as you know, and we did Ruby acquisition last year. We don't need M&A to grow. It's helpful if we find the right opportunity in the portfolio. It's most likely, although I won't say exclusively, it's most likely to be in premium and above premium, upper upscale, luxury lifestyle, and we tend to launch our own brands when it's a soft brand like Noted Collection or when it's a mainstream brand like Garner. Those we tend to launch on our own, although there could be exceptions to that. But we don't need M&A to grow. We have 21 very strong brands now, 11 of which launched in the last 11 years with a lot of runway. So those are still new. Those are basically still new and new to, new to new countries.

Speaker #2: We don't need M&A to grow . It's helpful if we find the right opportunity in the portfolio . It's most likely . Although I'd say exclusively it's most likely to be in premium and above premium upper upscale luxury lifestyle .

Speaker #2: And we tend to launch our own brands when it's a soft brand, like Vignette Collection, or when it's a mainstream brand, like Garnier.

Speaker #2: Those we tend to launch on our own. Although there could be exceptions to that. But we don't need M&A to grow.

Speaker #2: We have 21 very strong brands now, 11 of which launched in the last 11 years, with a lot of runway. So those are still new.

Speaker #2: Those are basically still new, and new to new to new countries. I think in 2025, there were 32 or 33 instances when we took one of our existing brands to a new country.

Elie Maalouf: I think in 2025, there were 32 or 33 instances when we took one of our existing brands to a new country. As far as that country is concerned, that's a new brand launch, right? That's a new brand launch. So, we have many more of these new country launches ahead of us for our brand portfolio, while we look at what else we could be interested in. What are some territories that could be appealing to us? We've been very successful in ultra-luxury with the region in Six Senses. I'd say extremely successful, not just, in the hotel brand itself, by expanding it, also expanding into branded residences. If there was a right opportunity, we could add more there. We've talked before about looking at branded shared home rentals. It's something we'll continue to explore.

Speaker #2: As far as that country is concerned , that's a new brand launch , right ? That's a new brand launch . So we have many more of these new country launches ahead of us for our brand portfolio .

Speaker #2: While we look at what else we could be interested in, what are some territories that could be appealing to us? We've been very successful in ultra luxury with the region in Six Senses.

Speaker #2: I'd say extremely successful. Not just in the hotel brand itself, but by expanding it, also expanding it into branded residences.

Speaker #2: If there was a right opportunity, we could add more there. We've talked before about looking at branded shared home rentals.

Speaker #2: It's something we'll continue to explore . Anything in premium lifestyle like Ruby is interesting only if it's accretive , if it's different and differentiated from the brands you already have , if it's at the right valuation also , or the right trajectory if we launch it ourselves , we don't need it .

Elie Maalouf: Anything in premium lifestyle, like Ruby, is interesting. Only if it's accretive, if it's different and differentiated from the brands you already have, if it's at the right valuation also, or the right trajectory if we launch it ourselves, we don't need it, given the strength of our portfolio. But look, it's a dynamic industry, right? Guests' interests are dynamic, owner investment interests are dynamic, so our strategy can't be static. That's why we've added to our portfolio thoughtfully, but we're not competing with anybody to have the most number of brands. I don't think that that is a recipe for success. We're competing for having the right brands for the right guests and the right owners. On cash generation, we have a very clear capital allocation policy and philosophy.

Speaker #2: Given the strength of our portfolio . But look , it's a dynamic industry , right ? Guests interests are dynamic owner investment interests are dynamic .

Speaker #2: So our strategy can't be static. That's why we've added to our portfolio thoughtfully. But we're not competing with anybody to have the most number of brands.

Speaker #2: I don't think that that is a recipe for success. We're competing for having the right brands, for the right guests, and the right owners. On cash generation, we have a very clear capital allocation policy and philosophy.

Speaker #2: First, we invest in the business, just like launching, noting, or buying Ruby to grow the business, because that's where the highest returns on invested capital come from.

Elie Maalouf: First, we invest in the business, just like launching Noted or buying Ruby to grow the business, because that's where the highest returns on invested capital come from for our shareholders. Number two, we maintain and grow our ordinary dividend. Number three, we return surplus capital to shareholders, and only when it's surplus. Fortunately, we have a strong asset light, growing cash-generating business that converts 100% on average of adjusted earnings into cash flow. Again, in 2025, we did that, and so we can return surplus capital. We wanted to get back into the stated leverage range of 2.5 to 3, and we are. So we're confident that our business model can continue to generate surplus cash flow over the years, and that we can return surplus cash flow to shareholders.

Speaker #2: For our shareholders , number two , we maintain and grow our ordinary dividend . Number three , we return surplus capital to shareholders .

Speaker #2: And only when it's surplus . And fortunately we have a strong asset light growing , cash generating business . That's converts 100% on average of of adjusted earnings into cash flow .

Speaker #2: And again in 2025 we did that . And so we can return surplus capital . And we wanted to get it back into the stated range of two and a half to three .

Speaker #2: And we are. So we're confident that our business model can continue to generate surplus cash flow over the years, and that we can return surplus cash flow to shareholders.

Speaker #2: But , you know , we're not we're not commenting on where else our share buyback will go in the future . Michael , if you wish to build on that .

Elie Maalouf: But, you know, we're not, we're not commenting on where else our share buyback will go in the future. Michael, if you wish to build on it?

Speaker #1: Yeah . I mean , you said that really well , what I would also just say if you go back and look at kind of where we were in when we first started the buybacks again back in 2023 , we were well below the the leverage range .

Michael Glover: Yeah, I mean, you said that really well. What I would also just say, if you go back and look at kind of where we were in when we first started the buybacks again back in 2023, we were well below the leverage range. And so a lot of what you had going on in our buybacks was a step up to get back into the range, and we finally have arrived in that. And I think what's exciting about this buyback is that we're able to actually grow the buyback again this year, and to be in the range.

Speaker #1: And so, a lot of what you had going on in our buybacks was a step up to get back into the range. And we finally have arrived in that.

Speaker #1: And I think what's exciting about this buyback is that we're able to actually grow the buyback again this year and be in the range.

Speaker #1: So we're no longer getting that by delivering the buyback and having any of the step up come in as part of that buyback , which is really , you know , a good indication of the kind of cash generation that this business can do .

Michael Glover: So we're no longer getting that buyback, delivering the buyback, and having any of the step-up come in as part of that buyback, which is really, you know, a good indication of the kind of cash generation that this business can do. I'm very happy with that. And I'm also, there's just a couple other things kind of nuanced in there that are really, really helpful. One, we've eliminated that, we've greatly eliminated the currency translation on our debt. That's a huge benefit for us, and by the end of this year, in the first quarter of next year, we will have completely eliminated that. Many of you who have followed us for many years have known about that.

Speaker #1: I'm very happy with that. And also, there's a couple other things kind of nuanced in there that are really, really helpful.

Speaker #1: One , we've eliminated that . We've greatly eliminated the currency translation on our on our debt . That's a huge benefit for us .

Speaker #1: And by the end of this year , in the first quarter of next year , we will have completely eliminated that . Many of you who have followed us for many years have have known about that .

Speaker #1: The other thing is, we refinanced our RCF this year and have taken out, and no longer have, debt covenants on that. That gives us a lot of flexibility.

Michael Glover: The other thing was we refinanced our RCF this year and have taken out, and no longer have debt covenants on that. That gives us a lot of flexibility. And as we've said many times with our shareholders, you know, and the expectation is that we will continue to do buybacks. And so whether it's delivering cash this year or at the next one, you know, we will do that. We're committed to do that. You've seen our track record on that from the $500 million we did in 2023 to the $750 million we did in 2024. And, excuse me, in the $750 million we did in 2023, the $800 million we did in 2024, and the $900 million we did in 2025.

Speaker #1: And as we've said many times with our shareholders, you know, the expectation is that we will continue to do buybacks.

Speaker #1: And so whether it's delivering cash , this year or at the next one , you know , we will do that . We're committed to do that .

Speaker #1: You've seen our track record on that, from the $500 million we did in 2023 to the $750 million we did in '24. And—excuse me—in the $750 million we did in '23, the $800 million we did in '24, and the $900 million we did in '25.

Speaker #1: We built that track record, and we will continue to do that.

Michael Glover: We've built that track record, and we'll continue to do that.

Speaker #2: Thank you. Next caller, please.

Elie Maalouf: Thank you. Next caller, please.

Speaker #3: Your next question comes from the line of Dana Mystery of Barclays. Please go ahead.

Operator: Yeah, next question comes from the line of Jayna Mistry of Barclays. Please go ahead.

Speaker #8: Hi . Good morning Michael . Good morning Elie , I have three questions as well . Two are follow ups . One , so the first follow up is around branded resi .

Jaina Mistry: Hi. Good morning, Michael. Good morning, Elie. I had three questions as well, two are follow-ups. So the first follow-up is around branded resi. Okay, when we're thinking about your growth algo of 100 to 150 bps from the margin or, you know, roughly 10% EBIT growth, should we think about branded resi next year as contributing to growth over and above that algo? Then the second question is around net unit growth. I mean, your commentary sounded really quite confident and bullish around it. You know, if we're thinking about net unit growth being around the 4.5 mark in 2026, is this the right run rate going forward for the medium term as well? You know, somewhere between 4.5 and 5.

Speaker #8: When we're thinking about your growth algo of 100 to 150 bps on the margin, or roughly 10% EBIT growth, should we think about branded resi next year as contributing to growth over and above that algo?

Speaker #8: And then second question is around net unit growth . I mean you're your commentary sounded really quite confident and bullish around it . You know , if we're thinking about net unit growth being around the four and a half mark in 2026 , is this the right one .

Speaker #8: Right. Going forwards for the medium term as well, you know, somewhere between four and a half and five. And then, very lastly, just on ref PA, I wondered if you could set the stage for '26.

Jaina Mistry: And then very lastly, just on RevPAR, I wondered if you could set the stage for 2026. You know, why are you confident in an inflection, or indeed, are you confident in an inflection? And could you give some color by region about what you're expecting? Thank you.

Speaker #8: You know, why are you confident in an inflection, or indeed, are you confident in an inflection? And could you give some color by region about what you're expecting?

Speaker #8: Thank you

Speaker #2: Thank you Gina , let me start with your last question . And then work our way back . Michael , please build on my responses if you wish .

Elie Maalouf: Thank you, Jayna. Let me start with your last question and then work our way back. Michael, please build on my responses if you wish. So, let me start with the RevPAR outlook. Understanding we don't give guidance either by quarter or by year, but just give you some context also by region. Let's start where I'm sitting today in the United States, although by tomorrow morning I'll be back in London. You know, if you look at 2025, we're very pleased with our performance in 2025 in the United States. We believe it was competitive, but we also know there was some burden on the industry in 2025, which started very well in January and February, and then we had a series of things that became sort of headwinds.

Speaker #2: So, let me start with reference to the PA outlook understanding. We don't give guidance either by quarter or by year, but just to give you some context.

Speaker #2: Also by region . Let's start where I'm sitting today in the United States , although by tomorrow morning I'll be back in London and you know , if you look at 2025 , we're very pleased with our performance in 2025 .

Speaker #2: In the United States, we believe it was competitive, but we also know there were some burdens on the industry in 2025, which started very well in January and February.

Speaker #2: And then we had a series of things that that became sort of headwinds . You had the the tariff anxiety and uncertainty . You had reductions in government spending .

Elie Maalouf: You had the tariff anxiety and uncertainty. You had reductions in government spending, the DOGE project, which affected government travel down, say, 20% on average. Then you had reductions in inbound, mostly from Canada, but a little bit also from Mexico and from Europe. Inbound for the US ends up being down 4%. And then, and then you had a record government length shutdown in the Q4. You take all those things, and yet I think we performed competitively in 2025. Those things either don't reappear in 2026 in the US or, or they don't get worse. We don't think government travel gets worse. It may not get better. We don't think there's going to be a government shutdown of that length, or maybe not even one whatsoever.

Speaker #2: The Doge project , which affected government travel down , say , 20% on average . Then you had reductions in inbound , mostly from Canada , but a little bit also from Mexico and from Europe , inbound for the US ended up being down 4% .

Speaker #2: And then, and then you had a record government shutdown in the fourth quarter. You take all those things, and yet I think we performed competitively in 2025.

Speaker #2: Those things either don't reappear in 2026 in the US, or they don't get worse. We don't think government travel gets worse.

Speaker #2: It may not get better. We don't think there's going to be a government shutdown at that length, or maybe not even one whatsoever.

Speaker #2: Instead of reduced international travel, we got the World Cup. We got us 250 many cases. We got a weaker dollar, which is not unhelpful.

Elie Maalouf: Instead of reduced international travel, we got the World Cup, we got US 250. In many cases, we got a weaker dollar, which is not unhelpful. So the comps get better going into 2025. But on top of that, the structural reasons to be confident in the US are not a few. You have strong GDP growth as an exit rate from 2025. You have strong employment. You know, some months the job report is higher than others, but you know, January was surprisingly strong. Regardless, we're still at record number of people employed in the US, low unemployment, real wage growth, diminishing inflation, improving trajectory for interest rates. They're at least stable to going down. Consumers are still spending, you know, up in October, November, 2.6%.

Speaker #2: And so the comps get better going into '21. But on top of that, on top of that, the structural reasons to be confident in the U.S. are not a few.

Speaker #2: You have strong GDP growth as an exit rate from 2025 . You have strong employment . You know , some months the job report is higher than others , but , you know , January was surprisingly strong .

Speaker #2: Regardless , we're still at record number of people employed in the US . Low unemployment , real wage growth , diminishing inflation , improving trajectory for interest rates , at least at least stable to going down .

Speaker #2: Consumers are still spending , you know , up in October , November 2.6% wages are pacing inflation . The corporate the corporate area has clarity on tax after last year's tax bill .

Elie Maalouf: Wages are pacing inflation. The corporate area has clarity on tax after last year's tax bill, and that starts to be beneficial to individuals and to corporations this year with accelerated depreciation and higher refunds coming back. And so you put those things together in addition with the super cycle of capital investment from technology companies, not just in AI and in technology, but also in the energy to provide that, and infrastructure to provide that. That's just private sector investment, right? I mean, four companies have announced spending $660 billion. That's just four companies, let alone the others. So we've got a lot of capital investment going in. So I think that gives you confidence that the US starts to comp against some negative factors last year. It's got a lot of positive factors.

Speaker #2: And that starts to be beneficial to individuals and to corporations this year, with accelerated depreciation and higher refunds coming back. And so you put those things together.

Speaker #2: In addition , with the super cycle of capital investment from technology companies , not just in AI and in technology , but also in the energy to provide that .

Speaker #2: Infrastructure , to provide that , that's just private sector investment . I mean , for companies have announced spending $660 billion . That's just for companies , let alone the others .

Speaker #2: So, we've got a lot of capital investment going in. So, I think that gives you confidence that the US starts to comp against some negative factors.

Speaker #2: Last year , it's got a lot of positive factors . We're not putting a number on where the US could be this year , but you'd have to you'd have to be a big pessimist to believe it doesn't have better fundamentals .

Elie Maalouf: We're not putting a number on where the US could be this year, but you'd have to, you'd have to be a, a big pessimist to believe it doesn't have better fundamentals in 2026 and 2025. Then I flip to the other side of the world. In China, I think it's visible, right? That we've bottomed out. We've always said it won't be a V-shaped recovery, and we don't think it'll be, but it's a recovery. It's a U-shaped recovery. We think the gradient is upward from where we are already, and that becomes a tailwind for us with a much bigger system, strong signing, strong openings, a leading position in the industry, across all tiers. So we're confident about what's happening there.

Speaker #2: In 26 and 2025 . Then I flip to the other side of the world . In China , I think it's visible , right ?

Speaker #2: That that we're — we've bottomed out. We've always said it won't be a V-shaped recovery. And we don't think it will be, but it's a recovery.

Speaker #2: It's a U-shaped recovery . We think the gradient is upward from where we are already . And that becomes a a tailwind for us with a much bigger system , strong signing , strong openings , a leading position in the industry across all tiers .

Speaker #2: So we're confident about what's happening there. And then that China outbound, that was up 22% last year at high rates. That is fueling our growth in Southeast Asia.

Elie Maalouf: And then that China outbound, that was up 22% last year at high rates, that is fueling our growth in Southeast Asia. Big numbers in RevPAR, whether it's in Vietnam, Japan, South Korea, Indonesia. All those markets are strong for us because of the Chinese outbound. The Middle East, strong, you know, double digits to high single digit RevPAR, whether it's in the UAE, in Dubai. Regardless of the uncertainty, at least our RevPAR was very strong there. So that region is doing well. In Europe, you know, yes, low GDP growth, but, what do you know? Strong travel growth. You know, mid-fours RevPAR last year, strong exit rate in Q4, and, people traveled to Europe from the US was up 3%, you know, last year.

Speaker #2: Big numbers in Repar , whether it's in Vietnam , in South Korea , Indonesia , all those markets are are strong for us because of the Chinese outbound , the Middle East strong , you know , double digit to high single digit repar , whether it's in neo , in UAE , in Dubai , regardless of the uncertainty in Middle East , our F.R.

Speaker #2: was very strong there . So that region is doing well in Europe , you know . Yes . Low GDP growth , but what do you know , strong travel growth .

Speaker #2: You know, mid-fours RevPAR. Last year, strong exit rate in Q4 and people traveling to Europe from the US was up 3%.

Speaker #2: You know last year Middle East going to Europe , Chinese travelers going back to Europe . So when I look across , you know , the globe , everything seems to be favorable compared to 2025 , where we were negative in China , returning positive , where things were flat in the US , there is there's fundamental for a little more optimism .

Elie Maalouf: Middle East going to Europe, Chinese travelers coming back to Europe. So when I look across, you know, the globe, everything seems to be favorable compared to 2025, where we were negative in China, we're turning positive. Where things were flat in the US there is- there's fundamental for a little more optimism. And our EMEA region continues to move at a good pace. So that's kind of why we are constructive about RevPAR going into 2026. And the early indicators, while early, and I'll say that, you know, we have a short booking windows, you know, 60% of our bookings come in the last week, but early indicators so far are positive in all regions. On NUG, on Net Unit Growth, I think I talked about it earlier.

Speaker #2: And our region continues to move at a good pace. So that's kind of why we are constructive about rebar going into 2026.

Speaker #2: And the early indicators . While early . And I'll say that , you know , we have a short booking windows , you know , 60% of our bookings come in the last week .

Speaker #2: But early indicators so far are positive in all regions on net unit growth. I think I talked about it earlier.

Speaker #2: We’ve had a consistent trajectory now for four years of growing that unit growth, best in six years. And in 2025, our strong signings and strong construction starts, with 50% of our pipeline now under construction.

Elie Maalouf: We, we've had a consistent trajectory now for four years of growing net unit growth, best in six years in 2025. Our strong signings and strong construction starts, with 50% of our pipeline now under construction, give us confidence in more openings. Our strong signings give us confidence in owner demand for our brands. Our brand portfolio is stronger. We're not, we're not putting a ceiling on where our net unit growth can be. We're comfortable with consensus where it is. Michael and I have both said that we think there's more upside than downside, but we're really more focused about the long-term trajectory for that to be sustainable, so that we're not just, you know, doing, say, unproductive, uneconomic things to increase our NUG.

Speaker #2: Give us confidence in more openings. Our strong signings give us confidence in owner demand for our brands. Our brand portfolio is stronger.

Speaker #2: We're not . We're not putting our a ceiling on where our net growth can be . We're comfortable with consensus , where it is .

Speaker #2: Michael and I have both said that we think there's more upside than downside, but we're really more focused on the long-term trajectory for that to be sustainable.

Speaker #2: So that we're not just , you know , doing say , unproductive , uneconomic things to to increase , not or you've heard me speak for years now , but keys with fees , not just keys .

Elie Maalouf: Or you've heard me speak for years now about keys with fees, not just keys. That's what we're focused on in all of our markets, but we think that's what we're achieving. We're not putting a ceiling on where we can go. We're very ambitious, but we're comfortable with consensus. And branded residences. It's gonna be a significant contributor over time. I think that probably starts in 2027, given the time it takes for some of these projects to come for sale. And we, you know, when you start to look at it within the growth algorithm, all these things start to fall in it. We have a range of 100, of 100 to 150.

Speaker #2: That's what we're focused on in all of our markets, but we think that's what we're achieving. We're not putting a ceiling on where we can go.

Speaker #2: We're very ambitious , but we're comfortable with consensus And branded residences It's going to be a significant contributor over time . I think that probably starts in 27 , given the the time it takes for some of these projects to come for sale and we you know , when you start to look at it within the the growth algorithm , all these things start to fall , fall in it .

Speaker #2: We have a range of 100 to 150. Sometimes, in some years, certain things will push us to the upper end of the range or slightly above the range.

Elie Maalouf: Sometimes, some years, some things will push us to the upper end of the range or slightly above the range. Some years it won't happen quite like that, but at some point it all starts to work within the algorithm. So we're comfortable that branded residences just gives us more confidence about our growth algorithm going forward. Michael, please jump in.

Speaker #2: Some years it won't happen quite like that, but at some point, it all starts to work within the algorithm. So we're comfortable that branded residences just gives us more confidence about our growth algorithm going forward.

Speaker #2: Michael, please jump in.

Speaker #1: Ellie . No , I mean , I think you covered it in detail , nothing more for me to add .

Michael Glover: Elie, no, I mean, I think you covered it in detail. Nothing more for me to add.

Speaker #2: But take the next caller

Elie Maalouf: Let's take the next caller.

Speaker #3: And your next question comes from the line of Alex Brignole of Rothschild & Co. Redburn. Please go ahead.

Operator: Your next question comes from the line of Alex Brignall of Rothschild & Co Redburn. Please go ahead.

Speaker #9: Good morning. Thank you. Thank you very much for taking the question. I'm just going to stick to one, if that's okay.

Alex Brignall [Partner, Director of Research: Good morning. Thank you. Thank you very much for taking my question. I'm just gonna stick to one, if that's okay. It's a similar vein to Richard and Jamie earlier. If I take your fee revenues, less your non-RevPAR fee revenues, then your sort of take rate as a percentage of gross revenues was down 8 basis points this year, and it was down 6 basis points the year before, and it was down sort of 25, 30 basis points from pre-COVID levels. There was some noise in the COVID years. I can't imagine that this is from existing contracts. So how do we solve for that in terms of the contribution of new properties? But the same trend is exactly seen at Marriott and actually also Hilton this year. So how do we...

Alex Brignall: Good morning. Thank you. Thank you very much for taking my question. I'm just gonna stick to one, if that's okay. It's a similar vein to Richard and Jamie earlier. If I take your fee revenues, less your non-RevPAR fee revenues, then your sort of take rate as a percentage of gross revenues was down 8 basis points this year, and it was down 6 basis points the year before, and it was down sort of 25, 30 basis points from pre-COVID levels. There was some noise in the COVID years. I can't imagine that this is from existing contracts. So how do we solve for that in terms of the contribution of new properties? But the same trend is exactly seen at Marriott and actually also Hilton this year. So how do we...

Speaker #9: It's a similar vein to Richard and Jamie earlier. If I take your fee revenues, less your non-rev per fee revenues, then your sort of take rate as a percentage of gross revenues was down eight basis points this year.

Speaker #9: And it was down six basis points a year before. And it's down, sort of, 25 to 30 basis points from pre-Covid levels, with some noise in the Covid years.

Speaker #9: I can't imagine that this is from existing contracts. So how do we solve for that in terms of the contribution of new properties?

Speaker #9: The same trend is exactly as seen at Marriott, and actually also Hilton this year. So how do we—how does that not mean that new rooms are coming with a slightly lower effective royalty rate?

Alex Brignall [Partner, Director of Research: How does that not mean that new rooms are coming with a slightly lower sort of effective royalty rate? Thank you.

Alex Brignall: How does that not mean that new rooms are coming with a slightly lower sort of effective royalty rate? Thank you.

Speaker #9: Thank you

Speaker #2: Hello , Alex . Thank you for your question . I'll take it then . Michael bailed on it . Our take rate is not reducing .

Elie Maalouf: Hello, Alex. Thank you for your question. I'll take it, then Michael build on it. Our take rate is not reducing. I can tell you, I can tell you that. So there may be, there are a few factors working into it. As we, as we moved into more luxury lifestyle and premium, and we've been very open about it, our key money has moved up too, because we're now participating by strategic choice in a sector that has more key money to play in it, but also has higher fees. So that key money amortization is starting to come through and affect a little bit of the fee revenue, and we've quantified that, actually for you. And so I think that there's, there's that factor in there.

Speaker #2: I can tell you . I can tell you that . So there may be if there are a few factors working into it .

Speaker #2: As we as we moved into more luxury lifestyle and premium . And we've been very open about it are Kee money has moved up to because we're now participating by strategic choice in a sector that has more money to play it , but it also has higher fees .

Speaker #2: So that key money amortization is starting to come through and affect us a little bit on the fee revenue. And we've quantified that actually for you.

Speaker #2: And so I think that there's there's that factor in there . But our , our , our fee rates that we get , whether it's mainstream , whether it's in premium , whether they're luxury lifestyle have not been diminishing .

Elie Maalouf: But our fee rates that we get, whether it's mainstream, whether it's some premium, whether luxury lifestyle, have not been diminishing. And so you might be seeing some, you know, year-over-year fluctuations due to normalization of key money or other factors, but it's not a headline fee rate change. Michael?

Speaker #2: And so you might be seeing some , you know , year over year fluctuations due to normalization of key money or other factors .

Speaker #2: But it's not a headline fee rate change, Michael.

Speaker #1: Yeah . I mean , I just would go back to the same factors . We I said when on Jamie's question and Richard's question as well , I mean , it's just a bit of noise , Alex , right now , it goes back to these record level of openings being incrementally more than what we've had in in the past .

Michael Glover: Yeah, I mean, I just would go back to the same, factors, I said when on Jamie's question, and Richard's question as well. I mean, it's just a bit of noise, Alex, right now. It goes back to these record level of openings being incrementally more than what we've had in the past. And just to, you know, give you, an idea, it takes time for a hotel to ramp up. And because we've had such strong openings, you've got a greater percentage of that in your system. Over time, if those openings are normalized, that, and it equals, but you've got more hotels earning less fees as they come in, and so that's affecting, your, your fee triangulation and some of that fee growth.

Speaker #1: And just to , you know , give you an idea . It takes time for a hotel to ramp up . And because we've had such strong openings , you've got a greater percentage of that in your system over time .

Speaker #1: If those are normal openings are normalized , that and it equals , it equals . But you've got more hotels earning less fees as they come in .

Speaker #1: And so that's affecting your fee triangulation and some of that fee growth. Now, that normalizes over time, so that's why I say it's a bit of noise.

Michael Glover: Now, that normalizes over time, so that's why I say it's a bit of noise. Elie discussed the key money, which we talked about as well. We've talked about leap year, we've talked about renovations. There's a number of things like that, that are that's kind of in there that's affecting this. As we look out and we look forward and we model this business, there is nothing to suggest that we will not still be able to hit that high single-digit fee revenue growth over time. I go back to the algorithm. There's no reason to believe we can't generate 100 to 150 basis points of margin improvement.

Speaker #1: Lee discussed the key money , which we we talked about as well . We've talked about leap year . We've talked about renovations .

Speaker #1: There's a number of things like that that are that's kind of in there . That's affecting this . As we look out and we look forward and we model this business , there is nothing to suggest that we will not still be able to hit that high single digit fee revenue growth over time .

Speaker #1: I go back to the algorithm. There's no reason to believe we can't generate the 100 to 150 basis points of margin improvement.

Speaker #1: We've been demonstrating that over the past several years , and including , you know , that Ebit growth of around 10% and that earnings per share growth in the 12 to 15% range , everything we do , everything we look at , how we model the business , nothing of that has changed with this noise that we're kind of seeing right now .

Michael Glover: We've been demonstrating that over the past several years and including, you know, that EBIT growth of around 10% and that earnings per share growth in the 12% to 15% range. Everything we do, everything we look at, how we model the business, nothing of that has changed with this noise that we're kind of seeing right now.

Speaker #5: I mean , if you look at . just .

Elie Maalouf: I mean, if you look at the-

Alex Brignall [Partner, Director of Research: Okay, thank you.

Alex Brignall: Okay, thank you.

Speaker #2: If you look at the pace of openings, Alex, not only was it a record in the number of hotels last year, but a lot of openings tend to be skewed to the second half.

Elie Maalouf: If you look at the pace of openings, Alex, not only was it a record in number of hotels last year, but a lot of our openings tend to be skewed to the second half. Our fourth quarter tends to be our biggest opening. So from an arithmetic point of view, you're not really even getting six months of fees in that given year for those openings, while the unit, you know, of NUG counts for the full year. Now, that's okay if you have the same percentage increase in openings year-over-year because you start to lap over the same amount. But when you have a surge of openings like we've had, then you get a bit of dislocation, which normalizes. We're happy with that. We would rather have more openings happening sooner, and as the hotels ramp up, the fees will come through.

Speaker #2: Our fourth quarter tends to be our biggest opening, so from an arithmetic point of view, you're not really even getting six months of fees in that given year.

Speaker #2: For those openings . While the unit , you know , of of Nog counts for the full year , now , that's okay .

Speaker #2: If you have the same percentage increase in openings year over year , because you start to lap over the same amount . But when you have a surge of openings like we've had , then you get a bit of dislocation , which normalizes .

Speaker #2: We're happy with that. We'd rather have more openings happening sooner. And as the hotels ramp up, the fees will come through.

Speaker #2: That doesn't concern us .

Elie Maalouf: That doesn't concern us.

Speaker #9: Now . That's just that's why I didn't ask the question , like Richard and Jamie , I asked it as a percentage of the gross revenues , which would be , I guess .

Alex Brignall [Partner, Director of Research: Now, that's why I didn't ask the question, like Richard and Jamie. But I asked it as a percentage of the gross revenues, which would be, I guess. Is there a reason for the fee revenues, the net fee revenues, and the gross revenues to have different timing? I wouldn't have thought that that would affect in a year.

Alex Brignall: Now, that's why I didn't ask the question, like Richard and Jamie. But I asked it as a percentage of the gross revenues, which would be, I guess. Is there a reason for the fee revenues, the net fee revenues, and the gross revenues to have different timing? I wouldn't have thought that that would affect in a year.

Speaker #9: Is there a reason for the the fee revenues ? Just the net fee revenues and the gross revenues to have different timing . I wouldn't have thought that that would , would have , would affect in a year

Speaker #2: No , I mean , I think gross . I mean , you get .

Elie Maalouf: No, I mean, I think the gross... I mean, you get the fee-

Speaker #5: The

Alex Brignall [Partner, Director of Research: Without that.

Alex Brignall: Without that.

Speaker #2: Michael, maybe you can help with that. But then you get to the net fee from the gross fees, and you're not earning the gross fees.

Elie Maalouf: Michael, maybe you can help with that, but you get to the net fee from the gross fees, and you're not earning the gross fees if the hotel opens in October. You're not earning the same amount of gross fees from a hotel that has a partial year of revenue, but has a full year of denominators and net unit growth. So I, I think that it's, you're not, you're not earning the full fees yet, so it's the same thing.

Speaker #2: If they'll tell opens in October . You're not you're not earning the same amount of gross fees from a hotel that that has a partial year of revenue .

Speaker #2: But as a full year of denominators in net unit growth . So I think that it's you're not you're not earning the full fees yet .

Speaker #2: So it's the same thing.

Speaker #9: But the gross revenues would be, and the gross fees are, counted. And that's why I'm not looking at it versus NUG. I'm just looking at it versus gross revenues, which you've disclosed in the release, and the net revenues that you've disclosed in the release.

Alex Brignall [Partner, Director of Research: But the gross revenues would be, and the gross fees are counted in the same way. That's why I'm not looking at it versus NUG. I'm just looking at it versus gross revenues, which you've disclosed in the release, and the net revenues that you've disclosed in the release, and then that's where the royalty rates just come down a bit. But we can take it offline. Thank you so much for answering.

Alex Brignall: But the gross revenues would be, and the gross fees are counted in the same way. That's why I'm not looking at it versus NUG. I'm just looking at it versus gross revenues, which you've disclosed in the release, and the net revenues that you've disclosed in the release, and then that's where the royalty rates just come down a bit. But we can take it offline. Thank you so much for answering.

Speaker #9: And then that's where the royalty rates just come down a bit . But we can take it offline . Thank you so much for answering .

Speaker #2: Yeah , just I want to conclude that there's there is nothing that we see where our , our royalty rate is decreasing across any of our brands or our management fees .

Elie Maalouf: Yeah, just, I want to conclude that there's nothing that we see where our royalty rate is decreasing across any of our brands, or our management fees neither. Thank you, Alex.

Speaker #2: Neither. Thank you. Alex

Speaker #3: And your next question comes from the line of Andre Juilliard of Deutsche Bank . Please go ahead .

Operator: Your next question comes from the line of Andre Julliard of Deutsche Bank. Please go ahead.

Speaker #10: Good morning gentlemen . Just to follow up questions for me , first one is on segmentation . Could you give us some more color about the trend you're seeing segment by segment .

André Juillard [Managing Director, Equity Research: Good morning, gentlemen. Just two follow-up questions for me. First one is on segmentation. Could you give us some more color about the trend you're seeing segment by segment? And do you see a pickup in the, in the My segment, especially?

André Juillard: Good morning, gentlemen. Just two follow-up questions for me. First one is on segmentation. Could you give us some more color about the trend you're seeing segment by segment? And do you see a pickup in the, in the My segment, especially?

Speaker #10: And do you see a pickup in the segment especially? Second question, about AI—really appreciate slide 40 and 41. But could you give us some more granularity about the disruption you're expecting from AI?

André Juillard [Managing Director, Equity Research: ... Second question about AI, really appreciate the slide 40, 41. Could you give us some more granularity about the disruption you're expecting from AI? Is it mainly a top-line driver, a mix of top line and cost optimization? Is it a real change in the yield management? So would appreciate any information you could give us. Thank you.

André Juillard: ... Second question about AI, really appreciate the slide 40, 41. Could you give us some more granularity about the disruption you're expecting from AI? Is it mainly a top-line driver, a mix of top line and cost optimization? Is it a real change in the yield management? So would appreciate any information you could give us. Thank you.

Speaker #10: Is it mainly a top line driver , a mix of top line and and cost optimization ? Is it a real change in the yield management ?

Speaker #10: So, we would appreciate any information you could give us. Thank you.

Speaker #2: Okay. Well, thank you, Andre. I'll start with your second question on AI. I'll turn the question on segmentation to Michael.

Elie Maalouf: Okay. Well, thank you, Andre. I'll start with your second question on AI. I'll turn over the question on segmentation to Michael, okay? So just bear with me because when we talk about artificial intelligence, we shouldn't just focus on one small thing, because our strategy around artificial intelligence and what we're seeing is broad and enterprise-wide. Yes, there is disruption, but I wanna start by saying that there are two things that we fundamentally believe are not changing. The first one is that there will always be a guest that will want to travel for business or for leisure. We absolutely see no change in that. In fact, we see more interest in that. And on the other end, they want to go to a destination that has a live, real experience.

Speaker #2: Okay . So just bear with me because when we talk about artificial intelligence , we shouldn't just just focus on one small thing because our strategy around artificial intelligence and what we're seeing is broad and enterprise wide .

Speaker #2: Yes, there is disruption, but I want to start by saying that there are two things that we fundamentally believe are not changing.

Speaker #2: The first one is that there will always be a guest that will want to travel for business or for leisure. We absolutely see no change in that.

Speaker #2: In fact , we see more interest in it . And on the other end , they want to go to a destination that has a live , real experience .

Speaker #2: The more people experience the virtual , the artificial , the digital , the more they favor live experiences , sports , events , theater , restaurant , bar and hotel .

Elie Maalouf: The more people experience the virtual, the artificial, the digital, the more they favor live experiences, sports events, theater, restaurant, bar, and hotel. People want live experience. Everything in between, the distribution, how you get there, how you book, how you view it, how you share it, how you search it, that is changing. We don't think it's a disruption for us. We think it's an opportunity for us. We feel like we're in a strong position to capitalize on these opportunities and to actually deepen our competitive moat because of the huge strides we've made in recent years to modernize our tech stack. We're in a fortunate position because of the work we've been doing over five, six years. You've heard me talk about our guest reservation system on the call. We're the first to roll out this industry-leading guest reservation system.

Speaker #2: People want live experiences . Everything in between the distribution . How you get there , how you book , how you view it , how you share it , how you search it .

Speaker #2: That is changing. We don't think it's disruption for us; we think it's an opportunity for us, and we feel like we're in a strong position to capitalize on these opportunities and to actually deepen our competitive moat because of the huge strides we've made in recent years to modernize our tech stack.

Speaker #2: We're in a fortunate position because of the work we've been doing over five, six years. You've heard me talk about our guest reservation system on the call.

Speaker #2: We were the first to roll out this industry leading guest reservation system . Then we migrated our core enterprise data to the cloud , and that allows us to quickly plug AI powered systems into our tech ecosystem .

Elie Maalouf: Then we migrated our core enterprise data to the cloud, and that allowed us to quickly plug AI-powered systems into our tech ecosystem. Since then, we were the first to deploy machine learning, AI revenue management to all of our hotels. So to your question about revenue management, we're already doing it. It's on all of our hotels, AI powered. Then we added new cloud-based PMS platform that will be in most of our hotels by the end of this year. And now we're adding new loyalty and digital content platforms. So this foundation of systems, platforms, data solutions, places us in a very strong place to be AI ready. And the areas of focus are generally the ones that you touched on, guest acquisition, commercial optimization, and cost efficiency.

Speaker #2: Since then , we were the first to deploy machine learning , AI , revenue management to all of our hotels . question about revenue management , we're already doing it .

Speaker #2: It's on all of our hotels, AI-powered. Then we added a new cloud-based PMS platform that will be in most of our hotels by the end of this year.

Speaker #2: And now we're adding new loyalty and digital content platforms . So this foundation of systems , platforms , data solutions places us in a very strong place .

Speaker #2: And be to be AI ready . And the areas of focus are generally the ones that you touched on . Guest acquisition , commercial optimization , cost efficiency .

Speaker #2: So on guest acquisition , you know , yes , it's about delivering top funnel visibility , driving , booking conversions and deepening guest loyalty .

Elie Maalouf: So on guest acquisition, you know, yes, it's about delivering top-funnel visibility, driving booking conversions, and deepening guest loyalty. I mean, today, 66% of our global room nights come through IHG One Rewards. So strengthening that incredible foundation is a big opportunity, and we do that, you know, first in search. With this new content platform that we discussed in my presentation today, now we're gonna be able, which we're launching this content platform at scale this year. We've already started launching some elements this year. You're gonna be able to take all that digital information, the right information, put it in the right channel at the right time. That strengthens those digital hooks needed for our hotels to be recommended by AI agents. This matters as travel search patterns evolve.

Speaker #2: I mean , today , 66% of our Global room nights come through Igg1 rewards . So strengthening that incredible foundation is a big opportunity .

Speaker #2: And we do that . You know , first in search with this new content platform that we discussed in my presentation today . Now we're going to be able which we're launching this content platform at scale this year .

Speaker #2: We've already started launching some elements this year. You're going to be able to take all that digital information—the right information—and put it in the right channel at the right time.

Speaker #2: That strengthens those digital hooks needed for our hotels to be recommended by AI agents . This matters as travel search patterns evolve . It will also create new ways to combine information digitally , move it around , shift it , recombine it , unlocking .

Elie Maalouf: It'll also create new ways to combine information digitally, move it around, shift it, recombine it, unlocking, you know, the greater flexibility in how this content is created, delivered, personalized. So it makes it an even more powerful factor when layering the AI-generated search on top of it. And you're gonna have more engaging types of content, which we don't have today, but we will. Video, 360 images, virtual tours, automated language translation, floor plans, everything to get the attention of guests searching directly or of their agents doing it. And we're gonna begin deploying this platform this year. Second, in Discover, sort of, we're working on trip planning capabilities in partnership with Google. It's not a standalone project for us. It's an evolution of how our guests plan trips and, you know, enabling a more conversational search experience on IHG's owned websites and apps.

Speaker #2: You know, the greater flexibility in how this content is created delivers personalization, so it makes it an even more powerful factor when layering AI-generated search on top of it.

Speaker #2: And you're going to have more engaging types of content , which we don't have today . But we will . Video 360 images , virtual tours , automated language translation , floor plans , everything to get the attention a of guest searching directly or of their agents doing it .

Speaker #2: And we're going to begin deploying this platform this year . Second , in discover sort of we're working on trip planning capabilities in partnership with Google .

Speaker #2: It's not a standalone project for us . It's an evolution of how our guests plan trips . And , you know , enabling a more conversational search experience on ICS owned websites and apps .

Speaker #2: So we are going to be leaders ourselves in this, and we're going to be testing these capabilities with external customers later this year.

Elie Maalouf: So we are gonna be leaders ourselves in this. We're gonna be testing these capabilities with external customers later this year. Then we're adding AI-powered marketing across all of our tools for more targeted, more personalized, you know, meaningful improvements on click-through rates and on ROI. We mentioned in my presentation a brand new CRM system powered by Salesforce that launches this year for our loyalty platform, unifying all of our customer data in a new cloud-based system. This gives us a seamless view of our loyalty members, all their experiences, whether they're calling a customer care center, checking into a hotel, requesting a copy of their bill. We can provide more personalized experiences, more relevant promotions, better benefits, loyalty rewards, faster, more efficiently, and so we can scale our platform across the states.

Speaker #2: And then we're adding AI powered marketing across all of our tools . For more targeted , more personalized , you know , meaningful improvements on click through rates and on ROI .

Speaker #2: Then we mentioned in our in my presentation , a brand new CRM system powered by Salesforce that launches this year for our loyalty platform , unifying all of our customer data in a new cloud based system .

Speaker #2: This gives us a seamless view of our loyalty . Members , all their experiences , whether they're calling a customer care center , checking into hotel , requesting a copy of their bill , we can provide more personalized experiences , more relevant promotions , better benefits , loyalty rewards , faster , more efficiently , and so we can scale our platform across the state .

Speaker #2: We're going to take this CRM platform and scale it across the state in 2026. And there are many other things that build around these tools to rapidly analyze huge amounts of data.

Elie Maalouf: We're gonna take this CRM platform and scale it across the state in 2026. And there are many other things that build around these tools to rapidly analyze huge amounts of data, guest feedback, and be more responsive to our guests. Last, you know, we talked about the commercial optimization. This, through the revenue management system that we have launched already, it's already creating revenue uplifts. You asked about cost efficiency. You see it in our results in 2025, with our costs being down 3%. We're using the latest technology, new ways of working, automating routine tasks, delivering insights through AI across the business. You know, you've heard us say this technology, together with the process redesigns and greater leverage of our centralized support, it's unlocking a more efficient, more scalable cost base for us.

Speaker #2: Guest feedback , and be more responsive to our guests . Last , you know , we talked about the the commercial optimization this through the revenue management system that we have launched already .

Speaker #2: It's already creating revenue uplifts. You asked about cost efficiency—you'll see it in our results in 2025, with our costs being down 3%.

Speaker #2: We're using the latest technology , new ways of working , automating routine tasks , delivering insights through AI across the business . You know , you've heard us say this technology , together with the process redesigns in greater leverage of our centralized support .

Speaker #2: It's unlocking a more efficient , more scalable cost base for us . In addition to the step change savings we delivered in 2025 , we believe those are sustainable for the long term .

Elie Maalouf: In addition to the step change savings we delivered in 2025, we believe those are sustainable for the long term. So we think this actually is an opportunity to make our business stronger, more scalable, more efficient, build a deeper and wider moat, and give us a competitive advantage. So Michael, do you want to address Andre's question on segmentation?

Speaker #2: So we think this actually is an opportunity to make our business stronger , more scalable , more efficient , build a deeper and wider moat and give us a competitive advantage So , Michael , do you want to address Andre's question on segmentation ?

Speaker #1: Yeah , sure . Happy to do that . Well , first I'll just start with where we ended up the year . As we discussed in my presentation , that business was up 2% .

Michael Glover: Yeah, sure, happy to do that. Well, first, I'll just start with where we ended up the year, and as we discussed in my presentation, that, business was up 2%, leisure was flat for the group, and groups were up 1%. And that's, that's been very pleasing to see in a, as Ellie described, a, turbulent year across, particularly the US. And so as we look forward and, what we're seeing right now, as we started, 2026, we actually saw really solid, business demand coming in. Obviously, in the US, that then began to get affected by the, storms and the cold weather that hit the US, but overall, still positive and, moving forward.

Speaker #1: Leisure was flat for the group , and groups were up 1% . And that's that's been very pleasing to see in in as Lee described , a turbulent year across particularly the US .

Speaker #1: And so, as we look forward and what we're seeing right now as we started 2026, we actually saw really solid business demand coming in.

Speaker #1: Obviously, in the US, that then began to get impacted by the storms and the cold weather that hit the US.

Speaker #1: But overall , still positive and and moving forward . And so then if you then look at groups and what we see right now , what we see on the books is still almost double digits up year over year .

Michael Glover: And so then, if you then look at groups, and what we see right now, what we see on the books is still almost double digits up year over year. So it looks like groups are gonna be strong. And remember, particularly in the US, 2025 was lapping against the election year, which had the big events like the Democratic National Convention and the Republican National Convention, and then all the other events that happened as part of the election. So you're now out of that, and so you should have better comparables there as well as you get in it. So we look at groups continuing to be strong. We have less visibility in leisure, as of course, the booking windows on that are shorter.

Speaker #1: So it looks like groups are are going to be strong . And remember , particularly in the US , 2025 was lapping against the election year , which had the big events like the Democratic National Convention in the Republican National Convention , and then all the other Events that happen as part of the election .

Speaker #1: So you're now out of that, and so you should have better comparables there as well as you get in there. So we looked at groups, continue to be strong.

Speaker #1: We have less visibility in leisure, as of course the booking windows on that are shorter. However, there's nothing right now to indicate things would be slowing down there.

Michael Glover: However, there's nothing right now to indicate things would be slowing down there. If you go back to Elie's comments on the different markets and how we're seeing things shape up, it seems to be more positive than the previous year. Now we're obviously very early in the year, so we'll need to see how that progresses, but that's how we're seeing it shape up as we sit today.

Speaker #1: If you go back to Elie's comments on the different markets and how we're seeing things shake up, it seems to be more positive than the previous year.

Speaker #1: Now , we're obviously very early in the in the year , so we'll need to see how that progresses . But that's how we're seeing it shape up as we sit today .

Speaker #5: Thank you .

Elie Maalouf: Thank you.

Speaker #10: Thank you very .

André Juillard [Managing Director, Equity Research: Thank you very much. Maybe one additional question, which is a follow-up. If you consider that you have two-thirds of your clients, which are a part of the loyalty program, what is a reasonable target for you, and what is the proportion of new clients you're welcoming every year?

André Juillard: Thank you very much. Maybe one additional question, which is a follow-up. If you consider that you have two-thirds of your clients, which are a part of the loyalty program, what is a reasonable target for you, and what is the proportion of new clients you're welcoming every year?

Speaker #5: Much .

Speaker #10: Maybe one one additional question , which is a follow up . If you consider that you have two thirds of your clients , which are part of the loyalty program , what is a reasonable target for you and what is the proportion of new clients you're welcoming every year

Speaker #5: We're

Elie Maalouf: We're very pleased with the progress of our IHG One Rewards program, hitting 160 million members. We believe that on a member per room, we're right up there in the leadership across the industry. The important thing is that they're very engaged, too. You know, you go back 5 years, we're below 50%, room nights contribution from our loyalty plan. Now we're over 66% globally, over 72% in the US. That's a remarkable move up. So they're engaged, they're staying more, they're spending more, they're joining our co-brand products. They're spending on those co-brand products. So it's a whole flywheel of virtuous behavior that we're fostering. And so we're not putting a ceiling on what our membership could be. We're not putting a ceiling on what our contribution could be. We're a growing business.

Speaker #2: Very pleased with the progress of our Igg1 Awards program , hitting 160 million members . We believe that on a member per room , we're right up there in the leadership across the industry .

Speaker #2: The important thing is that they're very engaged, too. You know, you go back five years, we were below 50% room nights.

Speaker #2: Contribution from our loyalty plan . Now we're over 66% globally over 72% in the US . That's a remarkable move up . So they're They're staying more .

Speaker #2: They're spending more . They're joining our Co-brand products . They're spending spending on those Co-brand products . So it's a it's a whole flywheel of of virtuous behavior that , that we're fostering .

Speaker #2: And so, we're not putting a ceiling on what our membership could be. We're not putting a ceiling on what our contribution could be.

Speaker #2: We're growing business . Look , we you know , with all of this , we still have only 4% of the rooms in the world with 10% of the pipeline .

Elie Maalouf: Look, we, you know, with all of this, we still have only 4% of the rooms in the world with 10% of the pipeline. So as we grow our openings, to grow our brands, to grow our system around the world, the opportunities for greater membership and greater penetration just continue to expand. We're ambitious, but we're not putting a ceiling on it.

Speaker #2: So as we grow our openings grow , our brands are grow our system around the world , the the opportunities for greater membership and greater penetration .

Speaker #2: Just continue to expand. We were ambitious, but we’re not putting a ceiling on it.

Speaker #10: Okay. Thank you, Andre.

André Juillard [Managing Director, Equity Research: Okay, thank you.

André Juillard: Okay, thank you.

Elie Maalouf: Andre, and next caller.

Speaker #2: And next caller .

Speaker #3: And we have one more question in the queue . And this comes from the line of Kate Xiao of Bank of America . Please go ahead

Operator: We have one more question in the queue, and this comes from the line of Kate Shao of Bank of America. Please go ahead.

Speaker #11: Great . Thank you very much . Just a quick follow up question from me . I wanted to ask about your pipeline . Obviously , 33% relative pipeline size .

Kate Xiao [VP, Equity Research Analyst: Great. Thank you very much. Just a quick follow-up question from me. I wanted to ask about your pipeline, obviously 33% relative pipeline size, and you mentioned over 50% of that is under construction. Is it possible to give some color around, you know, which bit of the pipeline is new build versus conversion? I'm asking that because, you know, in the context of conversion, accounting for over 50% of the new openings last year, and obviously, the 4.7% underlying, excluding the China impact, was helped by a bit of, you know, conversion and some conversion deals.

Kate Xiao: Great. Thank you very much. Just a quick follow-up question from me. I wanted to ask about your pipeline, obviously 33% relative pipeline size, and you mentioned over 50% of that is under construction. Is it possible to give some color around, you know, which bit of the pipeline is new build versus conversion? I'm asking that because, you know, in the context of conversion, accounting for over 50% of the new openings last year, and obviously, the 4.7% underlying, excluding the China impact, was helped by a bit of, you know, conversion and some conversion deals.

Speaker #11: And you mentioned over 50% of that is under construction . It is possible is it possible to get some color around , you know , which bit of the pipeline is new build versus conversion ?

Speaker #11: I'm asking that because , you know , in the context of conversion accounting for over 50% of the new openings last year , and obviously the 4.7% underlying excluding the impact , was helped by a bit of conversion and some conversion deals .

Speaker #11: I'm just thinking your visibility into kind of conversion this year , are you looking at new conversion deals that could help kind of maybe give you a bit more confidence to really hit that 4.7% kind of run rate , and maybe accelerate after that ?

Kate Xiao [VP, Equity Research Analyst: I'm just thinking your visibility into kind of conversion this year, are you looking at new conversion deals that could help kind of maybe give you a bit more confidence to really hit that 4.7% kind of run rate and maybe accelerate after that? Thank you.

Kate Xiao: I'm just thinking your visibility into kind of conversion this year, are you looking at new conversion deals that could help kind of maybe give you a bit more confidence to really hit that 4.7% kind of run rate and maybe accelerate after that? Thank you.

Speaker #11: Thank you .

Speaker #5: Well .

Elie Maalouf: Well, thank you, Kate. I'll just touch on conversions in general, and Michael can take you through the proportions and what that's been. I just want to address sort of conversion opportunity and tell you that what we firmly believe is that the conversion opportunity is not as limited as some in, you know, in the industry might have mentioned, analyst industry might have mentioned. It is not, for us, strictly converting from independence. The addressable market is much larger. Most of our conversions actually come from branded operators, whether large or small or regional. It's owners who see the strength of our enterprise, the strength of our brand portfolio, the strength of our support of our people, and want to join a stronger system.

Speaker #2: Thank you, Kate. I'll just touch on conversions in general, and Michael can take you through the proportions and what that's been.

Speaker #2: I just want to address sort of conversion opportunity and and tell you that what we firmly believe is that the conversion opportunity is not as limited as some , you know , in the industry might have mentioned , analyst industry might have mentioned it is not for us strictly converting from independence .

Speaker #2: The market is much larger . Most of our conversions actually come from from branded operators . Whether large or small or regional . It's owners who see the strength of our enterprise , the strength of our brand portfolio , the strength of our support of our people and and want to join a stronger system .

Speaker #2: So, we don't think it's limited, just independents, and therefore we think that the addressable market is very large. And we now have more conversion brands and products with the addition today of Noted Collection, the success of Voco, Vignette, and Garner, all of which are way ahead of our initial projections and are in many more markets than we thought they would be early on.

Elie Maalouf: So we don't think it's limited just independents, and therefore, we think that the addressable market is very large, and we have now more conversion brands and products, with the addition today of Notion Collection, the success of voco, Vignette, of Garner, all of which are way ahead of our initial projections, and are many more markets than we thought there would be early on. So many of our conversions actually come from our non, you know, specific conversion brand. So we can convert across most of our brand portfolio already, and we have more dedicated conversion brands, and the addressable market is broad. It's not just US, it's actually EMEA, where there's a large, you know, the largest unbranded proportion of hotels, and in China, conversions are picking up.

Speaker #2: So and and many of our conversions actually come from our non , you know , specific conversion brand . So we can convert across most of our brand portfolio already .

Speaker #2: And we have more dedicated conversion brands, and the addressable market is broad. And it's not just the US; it's actually EMEA, where there's, you know, the largest unbranded proportion of hotels.

Speaker #2: And in China, conversions are picking up. So we think there's a lot of runway in conversions, and we're not looking at it as a percentage of signings.

Elie Maalouf: So we think there's a lot of runway in conversions, and we're not looking at it as a percentage of signings and openings. Actually, I don't really care about the percentage, what I care is that both grow. I care that new build signings grow, and they grew globally, and that, you know, conversions grow, and they grow in absolute figures, and the proportions can fall wherever they may. Michael, let me turn it over to you for the detail.

Speaker #2: And openings . Actually I don't really care about the percentage , what I care is that both grow . I care that new build signings grow and they grew globally , and that , you conversions grow and they grow in absolute figures .

Speaker #2: And the and the proportions can fall wherever they may . Michael , let me turn it over to you for the detail .

Speaker #1: Sure . Thanks , Ali . Just to give you the numbers here , you know , I think it may be a little surprising to say and to hear that only 20% of our pipeline is typically conversion around that .

Michael Glover: Sure. Thanks, Ellie. Just to give you the numbers here, you know, I think it may be a little surprising to say and to hear that only 20% of our pipeline is typically conversion around that, but there's logic behind that. It's because they come in and out of the pipeline much quicker, as obviously it takes not as much time to get those open as it does a new build. But if you look at 2025, just to give you a feel of that, if you look at our openings, roughly 40% of those openings around the world were conversions, with roughly 54% being new build, and then there were some other items in there as well.

Speaker #1: But there's logic behind that. It's because they come in and out of the pipeline much quicker, as obviously it takes not as much time to get those open as it does a new build.

Speaker #1: And so, but if you look at 2025, just to give you a feel of that, if you look at our openings, roughly 40% of those openings around the world were conversions, with 50.

Speaker #1: Roughly roughly 54% being new build . And then there were some other items in there well . And then , of course , our signings were 52% conversion and 43% new build .

Michael Glover: And then, of course, our signings were 52% conversion and 43% new build. So the reason you see those higher numbers in the signings and openings is that they come out quicker. And so that's why we would see overall the pipeline having a smaller percentage over time than what you see opening and signing.

Speaker #1: So the reason you see those higher numbers in the signings and openings is that they come out quicker. And so that's why we would see overall the pipeline having a smaller percentage over time than what you see in openings and signings.

Speaker #5: Well , thank you .

Elie Maalouf: Well, thank you. Thank you, Kate.

Speaker #12: Thank you James .

Speaker #3: And this does conclude our Q&A session. I would like to hand the call back over to Elie for closing remarks.

Operator: This does conclude our Q&A session. I would like to hand the call back over to Elie for closing remarks.

Speaker #5: Thank you, everyone. It's been...

Elie Maalouf: Thank you, everyone. It's been great to connect with you today. We're very proud of what our teams have accomplished in 2025, and we remain confident in our ability to continue delivering on our strategy and driving shareholder value creation going forward. Our next market communication will be our Q1 trading update on Thursday, 7 May. Thank you for your time and your interest in IHG, and I look forward to catching up with you soon.

Speaker #2: Great to connect with you today. We're very proud of what our teams have accomplished in 2025, and we remain confident in our ability to continue delivering on our strategy and driving shareholder value creation going forward.

Speaker #2: Our next market communication will be our first quarter trading update on Thursday, the 7th of May. Thank you for your time and your interest in IG.

Full Year 2025 InterContinental Hotels Group PLC Earnings Call - Q&A

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