Thank you for joining this Q&A session. I'm Elie Maalouf, CEO of IHG Hotels & Resorts. I hope you’ve had a chance to view the results presentation we shared at 7:00 U.K. time this morning, which included insights from myself and our CFO, Michael Glover. Today, we are in different locations; Michael is at our headquarters in Windsor, while I am currently in the U.S. So please bear with us as we manage the questions. Before we start taking questions, I would like to briefly summarize our strong performance in 2025. Our revenue per available room grew by 1.5%, showcasing our wide geographic reach, diverse brand portfolio, and robust operating model. We achieved gross system growth of 6.6% and net system growth of 4.7%, thanks to impressive development activity and record hotel openings. We signed more than 102,000 rooms across 694 hotels, marking a 9% increase compared to 2024 when excluding the Ruby acquisition in 2025 and the NOVUM Hospitality agreement in 2024. We improved our fee margin by 360 basis points, supported by operational efficiencies and increases in ancillary fees. EBIT rose by 13%, and adjusted earnings per share increased by 16%, aided by the completion of the $900 million share buyback in 2025. In summary, we made significant progress on our strategic goals, and we are confident in the robustness of our enterprise platform and the promising long-term growth outlook. Moving on to 2026, although it is still early in the year, we are pleased with the trading performance so far across all three regions. We have also announced a new $950 million share buyback program and have officially launched our latest brand, Noted Collection. Now, I will hand it over to the operator for the first question.

Thank you, Elie. And your first question comes from the line of Richard Clarke of Bernstein.

If I'm allowed, I'll address three points. Looking back at 2025, if I exclude the cost savings and the increase in card and points revenues, I believe your EPS would have grown at a rate in the mid-single digits. I understand it wasn't the strongest year for RevPAR. If RevPAR doesn't impact 2026 or beyond, do you have alternative strategies to ensure you meet your growth targets? Secondly, you mentioned several times that some key earnings have been deferred to the first quarter of 2026. Can you discuss the scope of that and whether it should give us optimism about unit growth and specifically luxury unit growth in 2026? Lastly, in China, you noted a decline in margins and referenced the need to enhance unit economics or owner returns. Is the Holiday Inn Express now a $22 RevPAR brand in China? I doubt you would launch a $22 RevPAR brand in the U.S. Do you need to enhance those RevPAR figures or owner returns? Does the brand succeed at that RevPAR level?

Thank you, Richard. I'll address the key money question first, then briefly discuss the fee margin triangulation before handing it over to Michael for further details and to discuss the margin question regarding China. Regarding key money, as noted in Michael's presentation, we have been careful and strategic in how we deploy capital across various areas, including key money, recyclable maintenance, and returns to shareholders. Historically, our capital deployment has remained fundamentally stable over time, fluctuating some years but generally consistent, coinciding with significant growth in our revenues and profits, which we are quite pleased about. However, certain investments, like key money and recyclable maintenance, may vary in timing and could roll over from 2025 into 2026, and possibly from 2026 to 2027. Despite this, we are confident in our growth track record, achieving 4.7% system size growth in 2025, marking four consecutive years of acceleration and our best performance in six years. Our signings increased by 9%, our pipeline grew by 4.4%, and our openings were robust at 10%, showcasing our considerable growth potential. We are expanding our brand portfolio with the launch of Noted Collection today, and we’re not setting a ceiling on our growth potential for 2026. The consensus forecast is 4.4%, but I believe there is more upside than downside to that prediction, and we see even further potential for accelerating system size growth. Michael will provide insights on the fee triangulation for 2025. Before he addresses the margin issues in China, I want to express our strong confidence in our trajectory there. For two years, I have mentioned that China is gradually bottoming out, and we have seen this unfold, with sequential improvements leading to a positive fourth quarter in 2025. We expect this positive trend to carry through the first quarter of 2026 and beyond. We now have over 880 hotels in operation in China, with over 550 under development and record signings and openings. The economics of our operations are solid across all brands, and Michael will delve into the details. Our rapid openings and strong performance of the Express brand in China last year, where we retain full economic benefits, demonstrate that our business model works for our owners. Different tier markets have varying dynamics, but our robust openings influence RevPAR as many new hotels continue ramping up. Currently, overall RevPAR in China is about half of that in the U.S., which is reasonable considering China's GDP per capita is approximately one-eighth that of the U.S. We anticipate strong growth in the Chinese economy, which is reflected in our business confidence and hotel performance there. Michael, it's over to you.

Thank you, Elie. Let me address your first question regarding the 2025 earnings per share, excluding ancillaries and cost savings. Firstly, I want to highlight that the ancillaries will continue to grow. We expect strong growth moving forward, even though we don't have the step-ups next year, with expectations of growth in the double digits, above 10%. Regarding costs, we've focused on our cost base since Elie and I came on board, aiming to enhance revenue retention. For 2025, we anticipate costs to decline by about 3%. In 2026, we expect a slight increase of 1%, but we'll still see some savings from our ongoing programs. We are confident in our ability to maintain strong cost control as we progress into 2026. Additionally, we had discussed fee triangulation at the mid-year point, focusing on RevPAR, system size, and fee revenue growth. Notably, we've experienced a record number of hotel openings. As these hotels open, the fee income doesn't ramp up immediately due to the acceleration of openings, leading to some temporary effects. We also have many hotels under renovation, which impacts fees as they close for renovations and then re-open. Moreover, we had some large exits, particularly two hotels in New York, affecting fee triangulation until the replacement hotels start ramping up. As we move forward, we expect these effects to normalize. The NOVUM Hotels have also significantly impacted fee growth, as many joined our portfolio recently. Other minor factors include having one less day this leap year. Long-term, we are confident in returning to our growth algorithm, which we believe is still achievable. This year has showcased the resilience of our organization, allowing us to maintain our growth trajectory even during challenging times. Regarding our capital guidance, we remain firm in our outlook, expecting to stay in the $200 million to $250 million range, with overall capital around $350 million annually. In terms of China, margins decreased slightly, yet overall profit increased by $1 million. This is a positive outcome in a year marked by negative RevPAR. We believe that the Chinese RevPAR is bottoming out, which we observed throughout the year, with the fourth quarter turning positive at 1.1%. We're pleased with the early signs of RevPAR performance in Q1. While we anticipated potential challenges in Q1 2026 due to tougher comparisons, current indicators show promising growth across all three regions, including China. Let me pass it back to Elie to see if he has any additional thoughts.

No, Michael, that was great. Just regarding the factors affecting the fee triangulation for 2025, most of them are positive. We have strong openings significantly above last year's renovations. Additionally, all the other factors we are starting to compare against are more favorable. They are beneficial on one end and will act as tailwinds as we move forward.

And your next question comes from the line of Jaafar Mestari of BNP Paribas.

I have two, if that's okay. The first one is just on the fee business overheads. Those $23 million of cost efficiencies in '25, 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 the credit card fees, you were the only major global company to have something of that materiality going on really. It looks like you were closing the gap with U.S. peers who had historically more material contributions from those, and it's great that you're able to have a bit of a mark-to-market with issuers as 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 increase in fee contributions over the next few years. My question is, once everyone is fully ramped up, so 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. We can convince insurers and increase that and catch-up. Where do you think that will be? Will the gap have closed over 36 months as everyone gets the renegotiations? Or will it have just translated your level of ancillaries and their level of ancillaries, please?

Thank you, Jaafar. I'll address those questions, and Michael, feel free to add your thoughts. Regarding the cost of our fee business, it's important to reiterate what Michael mentioned earlier in response to Richard's questions. We have consistently maintained a disciplined approach to managing costs. If you refer to the presentation, you'll see that our cost growth over time has significantly lagged behind our revenue and profit growth. Since Michael and I took our roles, we have adopted a strategic perspective on how to reshape our cost structure for the future. We're focusing on making it scalable and future-ready by leveraging technology, new processes, shared services, and artificial intelligence. This approach will allow us to drive revenue and profit growth at a much steeper rate than our costs. This wasn't just a response to recent challenges; we initiated our strategic work when we began our roles in 2023, working over time to design a comprehensive plan. With both external support and our internal teams, we established a solid foundation that we began implementing in 2024, resulting in cost growth of only 1%. We even achieved a cost reduction of up to 3% in 2025. These initiatives have been introduced thoughtfully and strategically, focusing on reshaping our cost base and processes while capitalizing on new technologies like AI. Looking ahead, we anticipate low or very low single-digit cost growth on average, which may vary from year to year, as we continue to explore opportunities for cost efficiency through technology. As for credit card fees, I won't speculate on the renegotiation strategies of others. While we are exploring our own negotiations, we don't have specifics about their arrangements or future plans. However, we believe we have significant growth potential and possibly the most in the industry. We started to see this potential in 2025, where we doubled the credit card fees earned from 2023, and we aim to triple it by 2028. There’s no limit on our growth in this area. As we expand our system and membership—which now includes 160 million IHG One Rewards members up from 145 million at a rapid growth rate—we're focusing on engagement rather than just numbers. Currently, 66% of our members stayed at our hotels, with an even higher percentage in the United States. We’re seeing more engaged members who are spending more and signing up for more credit cards, with sign-ups up by double digits. This trend is driving our growth in card fees, which we expect to continue. We believe our performance is competitive with others, and any potential revealed by other businesses only raises our growth ceiling. So I'm not concerned about what others are doing; it actually motivates me. Michael, do you have any comments on overheads?

Certainly, let me address both of those points. Jaafar, you raised a great question about overheads. Elie mentioned that the situation is broad-based, and he mainly focused on the P&L, but I want to highlight that we've also seen improvements within the system fund. This actually provides us with additional resources. In terms of overall savings, we've seen greater reductions through this program in the system fund compared to the P&L, which is encouraging because it enables us to reinvest those savings into initiatives that drive revenue. When looking at it regionally, the improvements were widespread across all regions and functions within IHG. However, we also made investments, which is an important point to consider. For instance, our investment in integrating Ruby in EMEAA has led to some costs not decreasing as much there; in fact, they may have slightly increased. Additionally, we are also investing in markets like India, emphasizing that our strategy is not solely focused on cost reduction but also on channeling our resources into areas that will drive future growth. We've consistently stated that our primary risk is failing to capture our share of future growth, especially in an industry that is poised to experience both higher highs and lower lows. We want to be active participants and competitors in this market. Regarding credit card fees, I want to mention our recent partnership with Revolut here in the U.K. While it may not bring in as significant revenue as the U.S. market, it highlights the strength of our loyalty program as it expands. We have opportunities in various countries, and launching in the U.K. is just the beginning. We are in the process of launching more agreements worldwide, and we will update you as those developments occur. I'll turn it back over to you, Elie.

Thank you, Michael. Thanks for Jaafar. 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 residencies, all of which are high margin accretive to our bottom line. Next question.

Your next question comes from the line of Jamie Rollo of Morgan Stanley.

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 '27 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 what's giving you confidence to the upside to the consensus 4.4% net unit growth? 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, Jamie. I will discuss Branded Residences and removals before handing the fee income over to Michael, along with any additional points he wishes to address. We are very enthusiastic about the Branded Residences sector, which enhances our Luxury & Lifestyle portfolio, continuing to expand with our six brands, particularly the ultra-luxury ones: Six Senses and Regent. I want to share a quick story. I’ve already visited six countries this year, and it’s only mid-February. Earlier this month, I was in Bangkok where we have an InterContinental Residence project that began sales in December. The owner shared that they were already 40% sold by mid-January and had raised prices four times. I advised them to increase prices again to slow down sales. This is just InterContinental; we have even more projects with Regent and Six Senses. Currently, we have 30 ongoing projects, with many more set to enter the sales phase. In London, for instance, Six Senses is opening next month, and the Branded Residences are nearly sold out, with possibly just one unit remaining. Until now, the fee income has been relatively modest, ranging from $5 million to $10 million, but we anticipate a significant increase starting in 2027 and beyond. We believe there are no limits to this growth and are genuinely excited about its potential. Regarding the removals rate, we are confident it will return to around 1.5% over the next few years. There is a lot of variability right now, particularly in China as it normalizes post-pandemic, but we clearly see a path back to 1.5%. While this factor contributes to our upside in 2026, it is not the sole driver. The strength of our signings, our brand portfolio's resilience, and our ability to expedite openings, whether through conversions or new builds, all together enhance our confidence in long-term system growth. Lower removals present an opportunity, but it's part of a broader picture. Michael, feel free to elaborate on these points and discuss fee income.

Certainly. I was going to mention something similar regarding the net system size. We've indicated that the consensus is at 4.4% for next year, and we believe there is more potential for upside than downside as we progress through the year, based on our visibility. It's not solely about the reduction in removals, which we expect. It's also about the openings and their performance. We're seeing strong growth in EMEAA and China, reflected in our results this year. If you exclude the Venetian, the U.S. growth is at 1.5%, and we're making progress in the Americas at the same rate. Thus, we feel confident about it and believe there is more potential beyond the 4.4%. Regarding your third question about the table in the presentation, we thought it would be useful. It is indeed helpful, but it ties back to our earlier discussion about total RevPAR being lower than the comparable RevPAR, especially due to hotel ramp-ups. It takes time for new hotels to ramp up, and with our strong openings, a greater percentage of our system is comprised of these newer hotels. As these normal openings stabilize, it will balance out. However, right now, we have more hotels generating lower fees as they come online, which impacts our fee growth. This should normalize over time, which is why I consider it some noise. Elie mentioned key money, along with other factors, such as the leap year and renovations, that are also at play. As we look ahead and model our business, there’s nothing indicating we won't achieve that high single-digit fee revenue growth long-term. I refer back to our algorithm; there's no reason to think we can't achieve 100 to 150 basis points of margin improvement. We have demonstrated this consistently over the past several years, including an EBIT growth of around 10% and earnings per share growth in the range of 12% to 15%. Everything we do and how we model the business reflects that nothing has changed amidst the current noise.

I mean, if you look at the pace of openings, Alex, not only was it a record in a 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 6 months of fees in that given year for those openings while the unit now accounts 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 all 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'd rather have more openings happening sooner. And as the hotels ramp up, the fees will come through. That doesn't concern us.

And your next question comes from the line of Andre Juillard of Deutsche Bank.

Just two follow-up questions for me. First 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 MI segment especially? Second question about AI. I 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 I would appreciate any information you could give us.

Thank you, Andre. I'll begin by addressing your question about AI and then hand off the segmentation question to Michael. When we consider artificial intelligence, it's important to look at it from a broad and enterprise-wide perspective. While there is disruption, we hold firm to two key beliefs. First, there will always be travelers seeking experiences, whether for business or leisure, and we see an increasing interest in that. Second, people are drawn to locations that offer live, authentic experiences. As more individuals engage with virtual and digital offerings, they increasingly prefer real-life interactions — sports events, theater, dining, and hospitality. The methods of distribution, booking, viewing, sharing, and searching are in flux, but we view these changes not as disruptions, but as opportunities. Our advancements over the past several years position us well to take advantage of these trends and enhance our competitive advantage, thanks to our efforts in modernizing our technology infrastructure. In our guest reservation system, we were the pioneers in launching an industry-leading system, and we have shifted our core enterprise data to the cloud, which enables the rapid integration of AI systems into our technological ecosystem. We've already implemented AI-driven revenue management across all our hotels. We're also rolling out a new cloud-based DMS platform that should cover most of our hotels by the end of the year, alongside new loyalty and digital content platforms. This array of systems and solutions places us in a strong position to harness AI effectively, with key focus areas including guest acquisition, commercial optimization, and cost efficiency. Regarding guest acquisition, we're working on enhancing visibility in the booking funnel, improving conversion rates, and fostering guest loyalty. Currently, 66% of our global room nights are generated through IHG One Rewards, which presents a significant opportunity for us to fortify this foundation. We're introducing a content platform this year to optimize how we manage digital information, ensuring that it's delivered across the appropriate channels at the right times, thereby increasing our visibility to AI recommendation engines. This adaptability is crucial as travel search behaviors evolve and allows us to create dynamic and engaging content that includes video, 360-degree images, virtual tours, and more. We're also collaborating with Google to enhance trip planning capabilities, making it easier for guests to plan their travels through conversational searches on our platforms. Further, we're implementing AI-driven marketing tools to achieve more targeted and personalized outreach. This year, we will launch a new Salesforce-powered CRM for our loyalty platform, which will unify all customer data and provide a comprehensive view of our loyalty members. This will allow us to deliver personalized experiences and efficient promotional benefits. We plan to roll out this CRM system across our infrastructure by 2026, alongside numerous analytics tools designed to efficiently analyze vast amounts of data and respond to guest feedback. Regarding commercial optimization, our revenue management system is already facilitating revenue increases. As for cost efficiency, we're expecting a decline in costs of 3% by 2025, attributable to new technologies and optimized working processes. We've shared previously how these advancements, coupled with process redesigns, are helping us achieve a more efficient, scalable operational model. We believe the cost savings achieved in 2025 are sustainable in the long run. Overall, we see these developments as opportunities to enhance our business's strength, scalability, and efficiency, thus fortifying our competitive edge. Michael, would you like to address Andre's segmentation question?

Yes, 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%, Leisure was flat for the group and groups were up 1%. And that's been very pleasing to see in as Elie described a turbulent year across, particularly the U.S. And so as we look forward in what we're seeing right now, as we started 2026, we actually saw really solid business demand coming in. Obviously, in the U.S., that then began to get affected by the storms in the cold weather that hit the U.S., but overall, still positive 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. So it looks like groups are going to be strong. And remember, particularly in the U.S., 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 happen 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 groups continue to be strong. 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. 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. 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.

We are very pleased with the progress of our IHG One Rewards program, which has reached 160 million members. We believe that in terms of members per room, we are performing well and are among the leaders in the industry. Importantly, our members are highly engaged. Five years ago, less than 50% of our room nights came from our loyalty program; now, that figure is over 66% globally and over 72% in the U.S. This is a significant improvement. Our members are engaging more, staying longer, and spending more. They are participating in our co-brand products and making purchases in our core brand offerings. This creates a positive cycle of growth that we are encouraging. We do not intend to limit our membership growth or our contribution. We are a business that continues to grow. Currently, we manage only 4% of the world's hotel rooms, despite having 10% of the pipeline. As we expand our openings, brands, and systems globally, the opportunities for increasing membership and penetration continue to grow. We are ambitious, but we are not setting limits on our potential.

And we have one more question in the queue, and this comes from the line of Kate Xiao of Bank of America.

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 which bit of the pipeline is new build versus conversion? I'm asking that because in the context of conversion accounting for over 50% of the new openings last year and obviously, the 4.7% underlying, excluding the national impact, was helped by a bit of conversion and some conversion deals. 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?

I'll briefly discuss conversions in general, and then Michael can go into the details. I want to emphasize that the conversion opportunity is not as limited as some industry analysts might suggest. Our focus is not solely on converting independent hotels; the addressable market is much broader. Most of our conversions actually come from branded operators, both large and small, as well as regional owners who recognize the strength of our enterprise, our brand portfolio, and our support teams, and want to join a more robust system. Thus, we believe the addressable market is quite expansive. With the recent addition of Noted Collection, we now have more conversion brands and products available. The performance of voco, Vignette, and Garner has exceeded our initial projections, and they’re present in more markets than we anticipated early on. A significant number of our conversions come from brands that are not exclusively designated for conversions, and we are capable of converting across much of our brand portfolio. Our dedicated conversion brands lead to a wide addressable market, which extends beyond just the U.S. to regions like EMEAA, where there's a significant amount of unbranded hotels, and in China, where conversions are increasing. We see substantial potential in conversions, and our perspective is not limited to assessing it as a percentage of signings and openings. What truly matters to me is the growth of both new build signings and conversions in absolute terms. As long as both metrics grow, the percentages can fluctuate as they may. Michael, let me hand it over to you for more details.

Sure. To provide some clarity on the numbers, it might be surprising to note that only 20% of our pipeline typically consists of conversions. There’s a reason for this: conversions move in and out of the pipeline much more quickly because they require less time to open compared to new builds. Looking ahead to 2025, approximately 40% of our openings worldwide will be conversions, with around 54% being new builds, along with other categories. Additionally, our signings include 52% conversions and 43% new builds. The higher percentages in signings and openings can be attributed to their quicker turnaround. Therefore, the overall pipeline tends to show a smaller percentage over time compared to what we observe in openings and signings.

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

Thank you, everyone. It's been great to connect with you today. We are 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 first quarter trading update on Thursday, the 7th of May. Thank you for your time and your interest in IHG, and I look forward to catching up with you soon.