Operating profit at InterContinental Hotel Group (IHG) grew by 23% to more than $1 billion for the first time in 2023.

The performance came on the back of strong trading by the Holiday Inn, Crowne Plaza and Iberostar parent.

The key metric of revenue per available room (revpar) grew by 16% year-on-year in strong trading following the lifting of Covid travel restrictions which were still place in parts on the world in 2022.

The average daily rate achieved was up by five per cent sent on the previous year and by 13% compared to 2019 as occupancy rose by six percentage points.

This came as 275 hotels were opened, accounting for almost 48,000 rooms, to give a total of 6,363 properties.

The group signed a further 556 hotels as part of a global pipeline of  297,000 rooms across 2,016 hotels.

A new $800 million share buyback scheme, which together with ordinary dividends, is expected to return more than $1 billion to shareholders in 2024, according to the company.

IHG said: “Reflecting the different stages of recovery post-pandemic, by the fourth quarter of 2023 our global revenue performance was ahead of 2019 levels for all three types of stay occasions. 

“For the full year of 2023, leisure revenue was ahead of 2019 by 33% (13% room nights, 17% rate); business was ahead by 3% (-2% room nights, +5% rate) and although groups was still 5% lower (-7% room nights, +3% rate) it turned positive for the final quarter and groups revenue on-the-books was 17% higher year-on-year. 

“Supporting the outlook for further revpar progress, total global revenue on‑the-books at 1 January 2024 was 16% higher than at the same point a year earlier.”

The IHG mobile app and other mobile channels now account for 58% of all digital bookings.

Chief executive Elie Maalouf said: ”I was honoured to take over as IHG’s group CEO in July and would like to thank our teams for delivering an excellent set of results. 

“Travel demand was strong across all markets, with revpar up 16% on last year and 11% ahead of the 2019 pre-pandemic peak. 

“Today we are announcing a further $800m share buyback programme, which together with ordinary dividends is expected to return over $1 billion to shareholders in 2024.

“Alongside strong trading and financial performances, we continued to grow our portfolio and the global footprint of our brands.

“We opened 275 hotels in 2023 and signed more than double that amount – 556 hotels – into our pipeline. 

“Adjusting for the effect of the Iberostar hotels joining IHG’s system, openings for the fourth quarter grew by 27% year‑on‑year and signings were up by 50%, representing one of our biggest ever quarters for development activity.”

He added: “As we look ahead, our evolved strategic priorities and clear plans will further reinforce IHG Hotels & Resorts as the hotel company of choice for guests and owners.

“The travel industry has attractive, long-term drivers of demand, and the strength of our brand portfolio and enterprise platform will continue to boost our revpar and system size growth.”

Philip Baker a partner, leading the hotels sector at law firm Gowling WLG, said: “The travel sector continues to demonstrate its resilience and benefit from the increased consumer demand despite the cost of living crisis. 

“With IHG Group having firmly set out its strategic priorities this morning, the business is clearly demonstrating the viability of this upward trajectory – bolstered by impressive year-to-date results.

“Of course, competition is as stiff as ever where customer retention is concerned, which makes the market more consumer friendly at a time when value for money is essential at any price point, whether it be high-end or essentials focused.”