IHG Q3 2025: steady trading, big development momentum, and a fresh brand on the way
InterContinental Hotels Group’s third quarter update is a classic case of two stories at once: softer near-term trading, especially in the US, but very strong progress on hotel openings, signings and shareholder returns. Management says they remain on track to meet full year consensus profit and earnings expectations, which will reassure investors after a slower summer in parts of the portfolio.
For context, RevPAR (revenue per available room) was up +0.1% in Q3 at constant currency, taking year-to-date growth to +1.4%. Occupancy rose by +0.4 percentage points, while ADR (average daily rate) dipped -0.4%. The demand mix showed Business travel +4% in the quarter, offset by Leisure -2% and Groups -4%.
Key numbers investors should know
| Metric | Q3 2025 / YTD |
|---|---|
| Global RevPAR | +0.1% in Q3; +1.4% YTD |
| Americas RevPAR | -0.9% in Q3; +0.8% YTD |
| EMEAA RevPAR | +2.8% in Q3; +3.8% YTD |
| Greater China RevPAR | -1.8% in Q3; -2.6% YTD |
| Occupancy / ADR (global) | +0.4%pts occupancy; -0.4% ADR in Q3 |
| Q3 openings | 14.5k rooms (99 hotels), +17% YOY excl. NOVUM |
| Q3 signings | 22.6k rooms (170 hotels), +18% YOY |
| System size | 1,011k rooms (6,845 hotels) |
| Pipeline | 342k rooms (2,316 hotels), +4.7% YOY |
| Buyback | $700m of $900m completed; share count -3.9% to 152.4m |
| Total 2025 capital return | ~$1,170m (buybacks + dividends) |
| New bond | €850m at 3.375% (swapped to $990m at 4.87% interest) |
Regional performance: where the growth is and isn’t
Americas: a softer patch, but development still active
The Americas saw Q3 RevPAR down -0.9%, with the US at -1.6%. Occupancy slipped -0.3 percentage points to 71.8% and rate fell -0.5%. The mix tells the story: Business was ahead, but Leisure and Groups were down against 2024. Management is cautious near term but confident that growth returns as macro uncertainty fades.
Openings were 2.7k rooms (28 hotels). Reported system growth is held back by the removal of 7.1k rooms from The Venetian Resort Las Vegas earlier in the year. Adjusting for that, net system growth was +1.5% year-on-year and +0.5% year-to-date. Signings were solid at 7.6k rooms (79 hotels), +14% year-on-year, with conversions more than half of openings and signings. Garner continues to gain traction, now 25 open and 49 pipeline hotels in the region.
EMEAA: the engine room this quarter
EMEAA delivered another strong quarter: RevPAR up +2.8%, with occupancy up +1.6 percentage points to 75.3% and rate up +0.6%. By market, RevPAR ranged from +0.1% in Continental Europe to +2.8% in the UK, +3.3% in East Asia & Pacific, and a punchy +9.5% in the Middle East.
Development is humming. Gross system growth was +10.4% year-on-year and +6.0% YTD; openings of 4.2k rooms (33 hotels) were +25% on last year excluding NOVUM conversions. Net system growth hit +9.1% year-on-year and +5.2% YTD, with 2025 on track to be a record year for system growth in the region. Signings were 7.1k rooms (45 hotels), +22%, including 12 Luxury & Lifestyle hotels and good progress for Crowne Plaza, Holiday Inn and Garner. Conversions represented over 60% of room openings and approaching 40% of signings.
Greater China: improving trend despite outbound headwinds
Greater China RevPAR was -1.8% in Q3, better than -3.0% in Q2 and against -4.8% for FY 2024. Occupancy rose +0.6 percentage points to 64.4% while rate was -2.7%. Tier 1 cities fared better at -1.2%, with Tier 2-4 at -3.9% as outbound leisure travel weighed on domestic demand.
The development picture is excellent: gross system growth +12.8% year-on-year and +9.2% YTD, with 7.6k rooms (38 hotels) opened in the quarter, almost +40% year-on-year. Net system growth was +9.8% year-on-year and +7.3% YTD. Signings of 7.9k rooms (46 hotels) were up almost +20%, led by Holiday Inn Express (17) and Holiday Inn (16), plus six voco signings. Around 40% of rooms opened and signed were conversions.
New premium collection brand: what to expect and why it matters
IHG plans to launch a new collection brand in the upscale to upper-upscale premium segment in the coming months, initially focused on EMEAA. Collection brands typically bring independent or characterful hotels onto the big-brand distribution and loyalty platform while keeping their identity. It complements voco (a premium conversion brand) and sits below Vignette Collection, which is positioned in Luxury & Lifestyle and is already ahead of its target trajectory with 27 open and 41 in the pipeline.
Why this matters: owner appetite for conversions remains high, and premium is a large, fast-growing profit pool. A successful launch should accelerate signings and near-term system growth, given conversions often come to market faster than new builds.
Capital returns and balance sheet: buyback on track, debt ladder extended
IHG has completed $700m of its $900m 2025 buyback, reducing the share count by 3.9% to 152.4 million as at 22 October 2025. Together with approximately $270m of ordinary dividends, total 2025 returns are around $1,170m. That equates to 5.9% of the market cap at the start of the year and 6.2% of the most recent market cap quoted in the RNS.
On financing, the group issued a €850m bond at 3.375% in September, swapped into US dollars, fixing the debt at $990m with a 4.87% semi-annual interest rate. A £300m bond matured in August. Total bonds outstanding are now $4.1bn with a blended cost of roughly 4.3%, and leverage is expected to end 2025 around the middle of the 2.5-3.0x net debt:adjusted EBITDA target range after completing the buyback.
Share trading currency moving to USD: practical takeaways for UK holders
IHG intends to change the currency in which its Ordinary Shares trade on the London Stock Exchange from GBP to USD from the start of January 2026. The reporting currency has been USD for 17 years, so aligning the trading currency should reduce FX noise in the share price and simplify analysis.
Important details for UK private investors: the nominal currency of the shares remains GBP; the London listing is unchanged; dividends for UK-registered individuals will still be paid in GBP by default (with an option to elect USD). For those without USD facilities, the registrar will convert sale proceeds into GBP at the prevailing rate on settlement.
Currency effects: CER vs AER
At actual exchange rates, Q3 global RevPAR was +1.1% versus +0.1% at constant currency, with EMEAA seeing a notable FX tailwind (+5.7% at AER vs +2.8% at CER). This underscores why the move to USD trading could help investors see performance more clearly.
My take: a mixed quarter operationally, but strategy firmly on track
- Positives: development is excellent (openings +17%, signings +18%); EMEAA is strong; Greater China is improving; buybacks and dividends are sizeable; the balance sheet is well termed and reasonably priced; a new premium collection brand should accelerate conversion-led growth.
- Negatives: the US softness persists, with Leisure and Groups weaker and ADR down slightly; Greater China still shows rate pressure; global RevPAR was only +0.1% in Q3 at constant currency.
- Why it matters: IHG’s fee-based model compounds when three levers work together – RevPAR, system growth and ancillary fees. Q3 shows the development lever doing heavy lifting, which can offset a temporary dip in rate growth.
What to watch next
- US demand mix into Q4 and early 2026 – signs that Leisure and Groups stabilise would be supportive.
- The launch and early signings of the new premium collection brand – especially conversion pace in EMEAA.
- Pipeline conversion to openings – the 342k-room pipeline is a key earnings driver for 2026 and beyond.
- Progress on the LSE trading currency switch to USD and any impact on trading liquidity.
Bottom line: not a blockbuster quarter on RevPAR, but the development engine, capital returns and the upcoming brand launch keep the investment case intact. With management guiding to deliver in line with full year consensus, IHG remains a steady compounder whose value is built as much in the pipeline as in last night’s RevPAR.
