Despite a drag from its hotels in the Middle East, IHG Hotels & Resorts' global portfolio is showing signs of resiliency and steady growth that have executives upbeat about the company's future.
A flurry of hotel signings has IHG officials confident the company will drive “high-single digit percentage growth in fee revenue annually over the medium to long term,” said Elie Maalouf, CEO, during the firm’s first-half 2026 earnings results.
United Kingdom-based IHG will achieve this via a focus on growing hotel revenue per available room and building its global hotel portfolio, Maalouf said. He also pointed to improving global business and travel fundamentals as confidence boosters.
IHG’s global RevPAR grew by 4.1% year over year in the first half of the year, said Chief Financial Officer Michael Glover. IHG's hotels in the Americas grew RevPAR by 4.8%, hotels in Greater China increased RevPAR by 3.1% and the company's hotels in Europe, the Middle East, Africa and Asia grew RevPAR by 3%.
“Trading in the U.S. accelerated in the second quarter, growth in Greater China continued and a good performance elsewhere in our EMEAA region helped offset challenges in the Middle East,” Maalouf said in a statement accompanying the results.
IHG's Middle East hotel portfolio represents 19% of EMEAA system size but only 5% of IHG’s global portfolio.
In the first quarter, IHG's Middle East RevPAR dipped 2% year over year, and in the second quarter, RevPAR in the region fell 19%. Yet IHG executives are optimistic the region will rebound.
“We are not seeing any out-of-the-ordinary exits in the Middle East whatsoever. There might be a delay of some of the projects for a quarter or two, not that we have registered that yet,” Maalouf said.
Glover added hotel performance in the Middle East region has improved more rapidly than he had expected.
A total of 90% of IHG’s Middle East pipeline is in Saudi Arabia, Egypt and Turkey, Maalouf said.
“We remain on track to meet full-year consensus profit and earnings expectations,” he added.
During the first six months of the year, IHG signed 60 Holiday Inn-family hotels in China. IHG's total pipeline in China consists of 591 hotels and approximately 116,000 rooms, more than half of the company's current portfolio in that country.
China is a profitable market and it is becoming even more profitable, Maalouf said.
IHG's net systems network grew by 5% year over year, spurred by a 11.7% increase in Greater China and a 6.3% increase in Europe, Middle East, Africa and Asia. During the period, IHG opened 197 new hotels opening with a combined total of approximately 31,500 rooms. The company's revenue grew by 7% to $1.25 billion, which improved on previous guidance by approximately $10 million.
IHG's global hotel signings reached 352 hotels and approximately 49,200 rooms in the first half of the year, up 8% year over year by room count, he added.
Glover said upcoming quarters will see the full benefits of this strong network growth.
“Most agreements have a graduated fee structure that sets up over the first few years of operations. As a result, the full fee revenue contribution of recent openings is only partially reflected initially and builds over time,” Glover said. “At the group level you’ve actually seen about a 40 basis-point improvement year over year in that fee triangulation, and in some markets like the U.S. you’ve seen 110 basis points in improvement year over year.”
"We do believe that will continue to improve. There always some other noise in there, but really that’s what’s driving that, and that is a good problem to have.”
Maalouf said the firm’s 50-year updated agreement with Centinel to operate hotels catering to the U.S. Air Force would begin in late 2027 and initially involves 23 properties.
IHG is on pace to return $950 million to shareholders over the full year, Maalouf said. The company will continue to focus on its cost base, operate efficiently and realize overheads at a lower rate than the expected increase in revenues, thus resulting in an increased margin.
As of press time, IHG stock was trading at $155.20 a share, up 12.1% year over year. The London Stock Exchange’s FTSE 100 index was up 9.2% over the same period.