InterContinental Hotels Group Operating Profit Rises to $1.2 Billion

The Tip Desk · February 26, 2026 · 2 min read

The hospitality company reported a fee margin increase of 3.6 percentage points to 64.8% for 2025.

InterContinental Hotels Group (IHG) reported that operating profit from reportable segments increased 12.5% to $1,265 million. The hospitality company's operating profit rose from $1,041 million to $1,198 million, a figure that includes $21 million in operating exceptional costs related to commercial litigation, disputes, and a global efficiency programme.

Revenue from reportable segments rose 6.7% to $2,468 million. The company said this growth was driven by system and RevPAR growth, as well as incremental fees from the sale of loyalty points and changes to US co-brand credit card arrangements. Underlying revenue increased 5.7% to $2,454 million, while underlying fee revenue rose 6.2% to $1,890 million.

The company's fee business operating profit increased 13.5% to $1,231 million. This growth was attributed to system and RevPAR growth, which resulted in a $12 million increase in incentive management fees to $190 million, alongside incremental ancillary fee revenue. Fee margin increased 3.6 percentage points to 64.8%. The company stated that operational leverage and cost efficiencies from its global efficiency programme drove approximately 2.3 percentage points of this increase, while incremental fees from loyalty points and US co-brand credit card agreements contributed about 1.3 percentage points.

In contrast, operating profit from owned and leased hotels declined from $45 million to $43 million.

Expansion continued with the opening of a record 443 hotels during the year and the addition of 694 properties to the pipeline. Total gross revenue from hotels in the system reached $35.2 billion.

Financial results for the parent company showed profit after tax of £1,454 million, compared to £571 million in 2024. The company returned over $1.1 billion to shareholders. This included a $900 million share buyback programme.

IHG noted that it faced ongoing risks in 2025 from macro external factors, including moderating inflation, uneven economic growth, and labour availability pressures. Geopolitical tensions in the Middle East and Ukraine added uncertainty, contributing to potential tariff changes and trade frictions. The company ceased all operations in Russia following the outbreak of the war in Ukraine.

Management expects a medium- to long-term average annual fee margin improvement of 100–150 basis points.