Hello, and welcome to IHG's update on strategic priorities. I'm Stuart Ford, Head of Investor Relations at IHG Hotels & Resorts. And very shortly, I will be passing over to Elie Maalouf, our Chief Executive Officer, to start the formal presentation of today's event. Before we proceed, I'm obliged to remind all viewers that the company may make certain forward-looking statements as defined under U.S. law. Please refer to IHG's 2023 full year results announcement and the company's SEC filings for factors that could lead actual results to differ materially from those expressed in or implied by any such forward-looking statements. That results announcement issued at 7 a.m. London time today, Tuesday, the 20th of February 2024, contains all material background information to IHG's update on strategic priorities. That results release, together with the usual supplementary data pack as well as the presentation slides accompanying this webcast can all be downloaded from the Results & Presentations section under the Investors tab on ihgplc.com. For those research analysts or institutional investors who are listening via the webcast, may I remind you that in order to ask questions, you will need to dial-in using the details on Page 2 of the results release. This webcast is therefore listen-only. Once the formal presentations have concluded, there will be a short break before we open up the phone lines for Q&A, and we will remind you once again at that time that you will need to dial-in over the phone to ask questions. We will also display those phone numbers for you on screen at that time. Many thanks.

Well, thank you, Stuart, and good morning, good afternoon and good evening, everyone. I'm Elie Maalouf, Chief Executive Officer of IHG Hotels & Resorts. Thank you for joining us today for our IHG's update on strategic priorities. I will kick things off in a moment by sharing thoughts on the industry. We will then demonstrate the strength of IHG's business model and how it compounds growth and create sustainable shareholder value, underpinned by a clear purpose, ambition and strategic priorities. And we will dive deeper into the evolution of our strategic pillars and the progress we are making on each of them. The leaders of our 3 regions are also with us today to offer a view on our business in their part of the world. After which, we will cover our further fee and margin potential, strong cash generation and approach to capital allocation before taking your questions. What we would like you to take away from this event is our confidence in the strength of our track record and business model, and how our evolved strategic priorities and development initiatives will drive our growth algorithm and strong shareholder returns from here, namely, growth in adjusted EPS of 12% to 15% annually on average over the medium to long term. We will provide you with a deeper understanding of the strength and opportunities we have to further develop our brand portfolio and leading enterprise platform. And how those come together in a highly scalable, efficient model that delivers top line growth, expanding margins and excellent cash generation. A model that allows us to consistently invest in the business to drive growth, alongside sustainably growing the dividend and returning surplus capital, which is all part of how we see IHG driving optimum shareholder value. I will also outline the new…

Thank you, Elie. I'm Jolyon Bulley, the Regional CEO of the Americas region. I've been with IHG for 23 years, holding multiple roles across our regions, most recently as a CEO for Greater China for over 5 years, filed my current appointment in May last year, which led me to the Americas region. The Americas region is IHG's largest, representing 55% of our global system size. The region has 520,000 rooms across more than 4,400 hotels in 25 countries and territories. We have a further 109,000 rooms secured in the pipeline which is 21% growth. We have mainly a franchise estate with only 7% of our rooms being managed, most of which are in the Luxury & Lifestyle collection of brands. The United States is our largest market with a little over 85% of the rooms in the region and just under half the hotel rooms globally. We have a total system size plus pipeline approaching 540,000 rooms. We signed 22,000 rooms in the U.S. last year and opened 8,000. Mexico and Canada are our second and third largest markets, with a combined 10% of the region's system size today. We are confident in the growth drivers of the Americas region. There is considerable opportunity to continue scaling our brands in the core Essentials and Suites categories. Our Luxury & Lifestyle collection of brands has ample opportunity to grow too. And in many ways, we are just getting started in this area. And our growth outside the U.S. is accelerating as a result of the investments in our development teams and capabilities. We signed 100 hotels outside the U.S. over the last 2 years. In 2023, our signings across Canada, Mexico, Latin America and the Caribbean, represented nearly 20% of all hotel signings in the Americas region, and we're more…

Thank you, Jolyon. I am Kenneth Macpherson, the regional CEO of our Europe, Middle East, Asia and Africa region. In other words, my agreement to covers everything outside the Americas and Greater China. I've been with IHG for over 10 years and was previously the regional CEO of Greater China. Prior to joining IHG in 2013, I spent 20 years at Diageo. The EMEAA region is geographically very large and diverse. We have 247,000 rooms in 81 countries and territories. Our pipeline includes a further 82,000 rooms across close to 470 hotels, representing 33% rooms growth. Our estate has a 57% vs 42% franchise to manage a split. However, our pipeline is weighted more towards management agreements that 70% of rooms managed and 30% franchised, driving significant future fee revenue potential. In Europe, franchising is the preferred operating model, where in the Middle East, Asia and Africa management contracts are more prevalent, particularly in rapidly developing markets. This is due to a number of factors, including brand segmentation, type of owner and if the market has the availability of experienced high-quality third-party management companies. With that said, we are seeing increased opportunities to franchise our Luxury & Lifestyle brands in more developed markets with the right partners who have the required expertise and experience. Our 3 largest markets are the U.K., Saudi Arabia and Germany, which together represents just over 1/3 of EMEAA's system size. Our 3 largest pipeline markets are Saudi Arabia, Thailand and India with just under 1/3 of the pipeline. You can immediately see from this that we are targeting growth in a combination of how we approach market prioritization, share more thoughts on markets including Germany, Japan, Saudi Arabia, India and Thailand. Taking a moment here, though, to note EMEAA's largest market in the U.K., where…

Thank you, Kenneth. I am Daniel Aylmer, Managing Director at IHG in Greater China. I've been with IHG for 7 years and in Greater China over 20 years previously with Starwood Hotels & Resorts before joining IHG. Now IHG has been in Greater China for almost 50 years, opening its first hotel in the region back in 1975, followed by its first hotel in Mainland China in 1984, with Holiday Inn Beijing [ we do ]. As I will come to show you in a moment, it took us 33 years to open the first 100 hotels, 5 years open the second 100. 4 years to open the next 100, and we have been since maintaining an incredible pace of opening almost 100 hotels every 18 months. And in fact, we recently celebrated the milestone of 700 open hotels in Greater China, solidifying our position as the largest international hotel operator in this incredibly important market. That's close to 180,000 rooms, and we have a further 106,000 in the pipeline across more than 500 hotels. So in fact, our pipeline already has a further 59% rooms growth to secure. Currently, we have a predominantly managed estate with 68% of our rooms being managed and 32% currently franchised, but we have delivered a strong acceleration in the growth of franchising in recent years, which is, in fact, in its relative [ intimacy ]. More to come on this in a moment. We are extremely confident in the future of the Chinese hotel market and our business in China. Whilst as with every economy, there can be short-term challenges, the medium and long-term outlook continues to be undeniably attractive. China has a population of 1.4 billion people. And whilst population growth benefits the hotel industry, the middle class growth is of even…

Thanks, Daniel. I'm Michael Glover, Chief Financial Officer for IHG Hotels & Resorts. It's great to have been joined by our regional heads today, and it's clear from all we've heard this afternoon that there is still so much more to come from every part of our business. I want to take a moment now to link this all back to our growth algorithm which underpins our investment case. IHG has a strong proven track record of margin accretion, driven by a combination of increasing levels of RevPAR as well as expanding number of hotels. IHG's fee business revenue growth significantly outpaced overhead growth in the decade to 2019. On average, fee margin accreted by 130 basis points a year, further contributing to EBIT growth in the business. As we've already heard explained from our regional heads and Elie this afternoon, there are significant opportunities in the business, which will drive further growth in our fee business revenue. And therefore, we are confident that margins will continue to increase at a similar pace delivered in the past. You should, therefore, expect to see an average of 100 to 150 basis points of margin accretion a year over the medium to long term. This is our base scenario which, as I explained, is a product of the operational leverage, where we expect the efficiency of our cost base will require relatively low levels of overhead investment to drive growth. On top of this, we are actively pursuing further opportunities to drive fee margin over the longer term. These will include ongoing cost base efficiency and effectiveness initiatives, the expansion of ancillary fee streams, including driving additional growth from our co-brand credit card offerings. The ability to convert earnings into cash is key as it manifests our growth into investment capability back…

Thank you, Michael, and thank you to everyone in the audience for joining us today. Hopefully, you have found this informative. In a few minutes, we will open up for Q&A. But before that, let me bring together the key themes of what we'd like you to take away from today. We have built a strong business model that gives us a sustainable competitive advantage. We have a well-invested portfolio of 19 brands across a high-value geographic region in more than 100 countries in a full range of segment diversification from mid-scale to upper luxury and a powerful enterprise platform of technology, loyalty and commercial capabilities. Our pipeline represents secured multiyear high-value growth of over 30% of today's system, and we have a well-proven ability to successfully drive long-term growth in both demand and supply. We are a highly cash-generative business, supporting our capital allocation strategy to invest in growth that will drive long-term shareholder value creation, under sustainably growing dividend and return surplus capital to shareholders. Critically, we have built a high barrier to entry global business through the investments we have made over many years and continue to make to grow our scale, strengthen our enterprise platform and deliver a high margin, high earnings growth business. Summarized here. You can see our growth algorithm has delivered a very strong track record, reflecting those CAGRs through to 2019 that I shared with you at the start of the presentation. In the middle, you can see where we've come since 2019, completing a full recovery and much more. Compared to 2019, our RevPAR is 11% ahead. Our system size is 7% larger. Our fee margin is 520 basis points higher. We've also converted more than 100% of earnings into cash, which after investing in the business allowed us to grow…

This is Stuart Ford speaking. So we're now going to open the phone lines for questions. So if I can pass over to the operator to take the first question, please.

[Operator Instructions] And we will take our first question from Jamie Rollo with Morgan Stanley.

Three questions, if I may. First, you're not giving any explicit targets for net unit growth. The company used to talk about industry-leading net unit growth. So I guess that would be somewhere near sort of 6% or so. But what's the prospect for an improvement on last year's sort of 4% net unit growth, please? Secondly, any comments at all on recent trading? I know you don't guide, but we have seen some sort of softness in the U.S. upper mid-scale segments for the last couple of months, China also sort of back to below '19 levels so far this year. So any sort of view there? And then finally, just thinking about the company's valuation and Michael, you talked about [ $500 million ] of additional firepower. How do you sort of marry that high valuation and accretion from a buyback with the sort of marginal cost of debt? And also, where does that valuation leave your thinking on the benefit of a possible U.S. listing, please?

Okay. Thank you, Jamie. I'll take the first couple of questions, turn over the valuation one to Michael. I answer on the listing anyway, but we'll repeat it for you. So on unit growth, look, we're very pleased with our unit growth progress in '23 over the cycle. You saw our 16% growth in openings. You saw our 26% growth in signings. You saw our fourth quarter, almost record signings, 50% over the year before. So that gives us really good confidence about the trajectory. Now as you also saw in our SCA in 2023, we still had about 60 basis points of Iberostar in that 3.8. So where consensus is for 2024 is an acceleration, and we think we have potential as the whole team today described for you in all of our markets, across all of our brands in all of our regions to continue and accelerate that growth. And by the way, I think that we're -- if you adjust for all the acquisitions and various things among the majors, we're in the top of the league this year in '23 for net unit growth. On the U.S. current performance, we're -- don't give out-of-cycle trading information any more than we give guidance. We were doing some of that during the pandemic just to reassure people a little more, but we're well past pandemic communication as we won't be in '24 giving any more over 2019, comps as we won't be giving monthly data. So we're normalizing our communication. I mean if we look at sort of the fundamentals of the U.S. economy and market -- so let me just talk about the economy first and about the market. You've got strong GDP growth. You've got strong job growth. January was double what people expected. You got…

Yes. Jamie, thanks for the question. I think as we go through the process of thinking about how we go about our capital allocation. Obviously, as we've talked many times, we invest in the business, which we've done this year. We invested in things like Garner integration, with Iberostar. Then we looked to grow the ordinary dividend, which we did again at 10%. And then we looked to see do we have capacity within our stated model of 2.5 to 3x net debt to EBITDA. And so first of all, we looked at that and being at 2.1x at the end of the year, we knew we had capacity to do that. Then we think about what are the best ways to return that capital to shareholders. We obviously do an evaluation of a share buyback and look to see, is that going to be earnings which are accretive. Our blended cost of debt is about 3.7%. And when we did that evaluation, we knew that the share buyback would be value and earnings per share accretive. So I can't comment on the share price, but I can tell you we've done the work to make sure this is the right way to return capital to shareholders.

Our next question comes from Vicki Stern with Barclays.

Just coming back to -- you talked there, Michael, about this [ $500 million ] of headroom to the leverage targets. I suppose your predecessor used to talk about being happy in the top end of that leverage range. Obviously, that was in a different interest rate environment. But how should we be thinking about that comment about the additional [ $500 million ], be it for share buybacks or I think you talked about other opportunities? And generally, in normal times, where in that range you'd like to sit? You saw on signings quite a sharp acceleration in Q4. Just to what extent is that exit rate the right level of signings to have in mind now as we go forward? Was there anything special that boosted that Q4 signings pace? Or is that a sort of reasonable assumption now to think about future quarters? And then, [indiscernible], you've obviously talked recently about the credit card fee opportunity. Just keen if you might be able to flesh that out? I know it's not for a while, but I think there's sort of 2 elements to the opportunity there, both in terms of the mix between system fund and IHG and then on the absolute quantum of what those credit card fees could move to. So yes, a little bit more color there, please?

All right, Vicki, thank you. Let me take your second and third questions, and Michael will then pick up back on the [ $500 million ]. So on signings, yes, we're very pleased with the performance of our teams globally in the fourth quarter. The great thing about it was that we signed between 25,000 and 28,000 rooms across our regions for the full year. So it was very evenly distributed, it's rarely distributed by brand. The fourth quarter, as you know, very well, is always a very strong peak quarter for openings and signings. So it's not really ever evenly distributed. Now I'd say in Q4 of 2023, it was even stronger than usual. I'm very pleased with that. What does it come down to? There was nothing really in particular. What's better is that it was a lot of things coming together. The strength of all of our brands starting to show up throughout our markets. The strength of all of our teams performing in the market. Owners' confidence starting to come through. I mean it was tough for owners during the pandemic and that confidence is starting to recover. Leveling off interest rates helped, leveling off inflation helped, but we've got the right brand portfolio in the right markets, and that came together, too. But there was no onetime -- special onetime transaction in there. So I wouldn't model a consistent quarterly signings level because you know that the fourth quarter tends to be higher than others, but we're very excited about the progress that we can make across all of our brand portfolio going forward. Now on the credit cards. That's another area we're very pleased with since relaunching. Really 3 things: establishing a world-class luxury lifestyle portfolio, which is important to drive a higher paying customer, which is important for credit card acquisition, number one. Number two, relaunching IHG One Rewards 2 years ago and really putting it at the forefront of the industry in terms of its features, its rewards, its redemptions and seeing an acceleration. I mean 50% growth in sign-ups last year, it was a record. And then we had last year, which fed into the credit card strength. With 2 relaunched cards from the year before, we had 60% growth in new accounts, 80% compared to 2018 -- to 2019, double-digit growth in spend per card for the second year in a row. So -- I mean that's all encouraging. The largest opportunity in credit cards is to grow the program in aggregate. And that is beginning, but I'll also say we're just getting started with this, and there's a lot of headroom for us in there. Michael, over to you on the [ $500 million ] again.

Yes. And thanks, Vicki. Great question. Look, it's a great place to be in, to be honest. We've got -- to have that kind of capacity, to have a strong balance sheet, there's no real change to us saying we would be anywhere in that range. We still feel comfortable being in that range. But it gives us the opportunity. And one thing we didn't talk about in the -- I didn't mention in the capital allocation strategies is we'll look at opportunities as they arise. If there's something compelling that brings in additional shareholder value, gives us the opportunity to look at those kind of things. And then of course, as we go through the year, if there is still excess capacity [ packed ] consistently around doing regular share buybacks, it just gives you hopefully, confidence and while I can't say anything about what we would do in the future, but that model will continue to generate the cash and make that available for us over the long term.

And sorry, just to follow-up, to pick up on that comment there about if there are any opportunities that could arise. Any specific segments, regions that you'd be a bit more interested in, in terms of opportunities?

Yes, since coming into this role in July when traveling around our entire enterprise from China to Japan, Southeast Asia, of course, Europe, U.S. I'm going to Middle East in 10 days or less. So I mean, the great thing is everywhere I go, I see opportunity. Everywhere I go, I see opportunity for our brands, with our owners, mature large markets like the Americas. I think we're just getting started with our new brands. We're just getting started in Luxury & Lifestyle. We've got a long way to go still, and I'm confident Jolyon Bulley will lead it to greater heights. As you move east, Daniel just told you how much more headroom there is in China, the low penetration, the growth of the middle class coming. And then sort of in Southeast Asia, a young population, growing population, growing GDP. We've got a strong presence. I just think we've got opportunity across the whole map. With that, I think we can go to next question?

Our next question comes from Jaina Mistry with Jefferies.

And I've got 3 questions as well, if I may. The first one is bigger picture. You've mentioned the opportunity from branded residences a few times and I wondered if you could flesh out in more detail what this means, what the economics looks like from expanding branded residences today? My second question is around the U.S. It feels like there is increasing competition at the lower end of the U.S. market and we're several months into new brands launching like Spark and Garner, et cetera. How are you thinking about the impact of the development as to the lower end of the market, specifically the impact on the upper midscale business? And then lastly, I have a question on U.S. margins. I wondered if you could quantify any one-off costs in the Americas in 2023, I mean, costs that won't recur in 2024. And in particular, do you think margins can grow in the Americas region in 2024?

Okay. Thank you, Jaina. Let me take your questions on branded residences. I'm going to ask Jolyon Bulley, who's been leading the enterprise to add to it. I'll take your second question on competition in mid-scale, upper mid-scale, and Michael can fill you in on U.S. margins, any one-offs, et cetera. So -- well, the branded residence business is very attractive to us, 60% of our new signings in Luxury & Lifestyle are coming with branded residences. What typically happens there is we'll take a fee on the sale of the unit. And those units can run into 7 figures, multiple 7 figures. So that business model has been proven. We're -- most of our Six Senses deals and Regent deals come with branded residences and they create a halo for the development of the residential, and we end up taking a fee on the residential. So that's very attractive for us. And it's a segment where we have the ability to really multiply our fees over the long term. Well the U.S. has been very competitive for a long time. This is not the beginning of competition in the U.S. We've always competed and we've competed well. And so we're not deterred by the competition. We see most of the new brand launches that occurred this year were not really in upper mid-scale. They were mid-scale, mid-scale to economy almost. And so we don't see it as much as relevant to our offer of mid-scale [ Paris ] brands of Holiday Inn, Holiday Inn Express and Atwell Suites. We see it entering more mid-scale to lower mid-scale. I mean, interestingly, in mid-scale, our Candlewood Suites brand had a great year. Our avid sales are up over 60% -- or avid signings are up 60% year-over-year, and Garner's had a good start. There's a lot of opportunities still in the U.S., plenty of room for us to continue to compete and take share. On U.S. margins, the only thing I will say before I turn it over to Michael is keep in mind that one thing that happened in '22 is the industry was very strong in the U.S., stronger than we expected stronger than anybody expected, and we expected to add back some cost postpandemic, but the revenue gains exceeded our expectations, and we were not adding back some of that infrastructure, some of the cost as quickly as the revenue gains. So you did see a bit of a bump, and we signaled that at the end of the year. You did see a bit of that bump that had to catch up a little bit into 2023. And then there were a few things that we invested in. Michael, I turn it over to you on that.

Yes. Thanks, Elie. So let me just step back. Few little overheads in total for the group. They grew by 8.5% last year in 2023. This is higher than we would expect normally. As part of that, roughly 5% was inflation. And then I think you may remember we had $25 million to $30 million of other costs that came in. Part of that was related to Iberostar integration. Other parts of that was related to the Garner investment. We're going to have some of that stuff repeat. We've said this year, we would expect to see kind of normal inflation in overheads in that kind of 2% to 4%. As Jolyon talked about in his presentation, we definitely see opportunity for continued fee margin growth. I'm not going to give you any kind of guidance or formal numbers here, but we definitely see opportunity for that to continue to grow.

Thank you, Jaina. We can move on to the next question.

Our next question comes from Muneeba Kayani with Bank of America.

I actually wanted to go back to the credit card and loyalty comments around kind of -- can you help us quantify the EBIT opportunity from that and the timing around that? Any milestones there? And is this included in the medium-term targets that you just laid out? The second question is just again, on the medium-term targets and the fee margin expansion there. At a group level, how should we think about that across regions? Is it a similar 100 to 150 basis points? Or does it vary? And then just again on the share buybacks. Is there a certain amount that's assumed in that 12% to 15% EPS CAGR?

All right. Thank you, Muneeba. You asked about the credit card. Third question was the share buybacks, which I'll leave to Michael. And what was the middle question? Yes, fee margin region. Let me take the first question. On credit card, we don't give guidance, obviously, on any region, any specific segment of our business. So we can't do it here, won't do it here. But what we've shared with you is we're roughly in the $100 million-ish today in total credit card revenues, which gets split between system fund and P&L. And we think it can be multiples over time. It can be multiples. And as you can see from our growth in 2023, it was 60% more accounts with double-digit spend per card. We're on the right trajectory, and it's highly fee accretive to the company with a strong drop-through. On fee margin by region, well, I'll let Michael pick it up from there.

Yes. So one other disappointing -- I mean any -- obviously, within our numbers, we have the credit card fees that we're making today. We have not added that within the guidance that we've given longer term. So that's not in the long-term guidance of any incremental amounts or thoughts going in there. From a fee margin perspective, if you look at what we're -- and look at each of the regions and if you heard Daniel, Kenneth and Jolyon talk about all of the regions have fee margin accretion opportunity. It will be different in different regions as we think about how those regions mature and grow certainly in China as we move more to franchise, that's going to drive a lot of the margin accretion. And in EMEAA. We've got more Luxury & Lifestyle coming in. So all of that is going to come at a different pace and as we go forward. But again, we feel like that 100 to 150 basis points of margin improvement is in line with what we would expect and in line with what we've done historically. On the share buyback, obviously, I won't -- I can't give guidance on what we'll do in the future and is the [ $800 million ] a floor. But I think if you just go through our value algorithm, I'll let you go through and model what you think that might be.

We will move next with Jarrod Castle with UBS.

Great. Just part of the presentation, clearly, you're growing very quickly in China. But I guess some of the local Chinese brands are growing much quicker than you. So I guess the question is, would you say you're targeting more quality rather than just growth per se? And how do you get your fair share of mix in a market which certainly some competitors will be growing quicker than you? You've also done a lot of portfolio cleaning and refresh over the years. Anything else to call out over the medium term in terms of further evolution of existing brands? And then lastly, I just want to get an idea of how you see the health of the funding markets now for investors in your hotels? Indeed, if interest rates are starting to hopefully come down, did you expect to see some kind of acceleration in signings in certain markets?

Thank you, Jarrod. Let me touch on your questions. I'm going to take the China question last because I'm going to just make a couple of remarks and turn it over to Daniel, who can give you some color fresh from there, actually. So no, we don't foresee any other portfolio cleaning. The Crowne Plaza, Holiday Inn plan of -- I think it's now 2021, it was really a one-off. And we believe that the state of our brands with a philosophy of constant refreshment does not require that. On the lending market for hotels, I mean, it's different around the world, of course. But I would say it's generally improving in total. And if I unpack it a little bit, in the U.S., our biggest market, rates have dropped from near 5 to near 4. It leveled off. Inflation has leveled down. The banking agitation at the beginning of the year of '23 with the regional banks has subsided. But in the meantime, the industry has been strong, rates have been high, RevPAR has been strong, hotels are cash flowing. So I think that's given owners more confidence, and that's shown through our increased openings and increased signings and I think it helped us to propel a stronger fourth quarter. So I think that confidence is building. I also think there's much more to go. So that's what we're encouraged by. And I think if you go to the other end of the globe, over in China, you saw a market that just really opened up in January and accelerated pretty quickly throughout. We managed to open our 700th hotel last year, and we got over 500 on our development now. And I think we'll get our 800th open this year in 2024, at least Daniel tells me we will. So we're pretty encouraged that financing for our sector of hospitality, of hotels in China is also available today. I sat down this weekend in London with -- happened to be a U.S. -- one of our U.S. owners from Nebraska who builds most or all of our mainstream brands, just happen to be in London, we sat down in the afternoon. And David, he's got quite a few of our hotels in the pipeline. He's starting to move forward on financing. He's finding a little more receptivity out there. So we think that climate is improving, but there's more to come.

Can I just add on that? If you look at -- and we talk a lot about conversion signings and certainly, there -- it's great to see those conversion signings come in. We put in a new brand like Garner to attract those. But in the Americas where most of that construction and financing issue was raised, actually, we had new build signings of 68% in 2023. 68% of our signings were actually new build signings. And that's up 13% year-over-year. And as Elie mentioned in his presentation, 33% up from 2020. I think that just gives you an indication that owners feel like they can secure the financing, they can get the asset built and they can deliver the returns on that asset. So I think we're very encouraged about that. And certainly, the momentum we've seen like in the -- for the group, in last quarter, we saw signings up 50% year-over-year. In the Americas, they were up significantly. Now that's a busy quarter for us, normally. But I think we're really encouraged by the momentum we're seeing there and the fact that owners are doing new build projects, and it's not all about conversions.

Yes. And I want to bring in Daniel to talk about the competition in China. I'd say, look, all of our markets have always been competitive. We're not deterred by the competition, whether it's the U.S. and in China. And yes, some of our competitors in China, the local ones are playing in a different segment. But keep in mind, not just the competition, I think the first thing to keep in mind is the size and opportunity of the market ahead with 1/7 penetration, with 200 million people joining the middle class, there's going to be room for all great competitors, especially ourselves. But Daniel, over to you to what you're seeing.

Thanks, Elie. And Jarrod, firstly, let me compliment you on the report you put out last week on China, very insightful and a very important read. As Elie said, there's still lots and lots of opportunities in Greater China. And the local competitors are fierce and they're fast. We've done a lot of work over the last several years on ensuring that our owners' ROI performance is on par with local competitors. So looking at the cost to build, cost to open and cost to operate. And then, frankly, we're in a really good place. So I would say, whilst you look at the local players have grown extremely fast the past decade is really for us watch the space.

Next question comes from Leo Carrington with Citi.

If I could ask a couple on the EMEAA region, please. Firstly, there's 4 as yet undeveloped brands in EMEAA. Just can you talk about the -- what's changed to perhaps this opportunity? Is there increased receptivity amongst owners? Or are you reaching a level of concentration with the other brands? And then secondly, the potential for India. To what extent is it possible for India to see a replication of your success in Greater China, notwithstanding your business in Greater China has been there for some time now?

Okay. I want to get Kenneth's thoughts quickly on this, but let me just pop it off before. I would say -- and I've been traveling with Kenneth in EMEAA since July, where we've been to Southeast Asia. We've been to Japan. We're going to India together in next -- in April. We are going to the Middle East next month. We see opportunity everywhere. The one thing that is not the -- that's not on the table is concentration. We just see more opportunity with our brands as guests demands broaden beyond certain brands, as owners are more interested different things. It is certainly not concentration in a very vast territory. We're still a growing population, growing middle class and growing GDP and vastly underpenetrated, not just by hotels, but vastly underpenetrated by branded hotels. And if I look to India, there's a huge opportunity. I mean we've got 50 hotels in India, 50 or so under development, plus or minus. If you can compare it to the scale we achieved in China, I'm not saying we'll achieve the same scale in China, but it shows you the headroom that there is over a long period of time. We're long players. We don't take the quarterly, annual point of view on these matters. We take a long-term view because we believe that compounds value for our shareholders. Kenneth, over to you.

Leo, thank you for your 2 questions there. I'm going to the first one about the brand potential. Maybe going back a bit when we created the EMEAA region, we've been very clear that we would be building close to market teams and that we would be developing our presence and our scale and our performance into prioritized markets. We've continued to do that over the years, both pre and during the pandemic and post that. And in parallel to that, we've been strengthening the brand experience and the performance and the early returns of the brands that we had established. As we've done that, we're reaching the point where we have got scale businesses where we feel increasingly confident that we can introduce new brands. And that coincides with the [indiscernible] capabilities, but it's also the points that Elie made about our enterprise, the IHG One Rewards and just our ability to drive those brands as we introduce them. And those scale businesses, those teams are allowing us to identify that intersection between our returns and guest interest and guest needs. So really what you're seeing now is us talking about this because we feel more confident that we can drive the performance of those brands so that we can build to a scale where it makes economic sense. And ultimately, we can leverage those to drive the value and the bottom line performance that you'd expect us to be doing. And that's why we're talking about it more than we have done previously. Just adding to India, as I referred in my introduction, I have the great pleasure of working on our China business earlier on. And a follow-up by Jolyon and Daniel. And I think the India bit is a very similar story. It is the GDP growth driving the growth of the Indian middle class. Indian middle class coming through at sort of mid levels and actually very high income levels as well. That is coinciding with central government policies around infrastructure development and then also trying to create a business environment that's enabling the sort of international investment that we're seeing going into India. So with that, we'll be adopting a very similar approach. We're going to be building strong foundations. We're going to be making sure we build the reputation and the performance of our brands, at least we'll have to drive growth. So I think we will be taking the long-term view on it. We'll be taking the steps to make sure we grow it sustainably. And over time, you'll see the real value of the market come through. So thanks for that.

We will move next with Alex Brignall with Redburn Atlantic.

Two, if I could. Just coming back to RevPAR. There's been a lot of questions asked of every franchise group about the outlook for RevPAR. I guess from your perspective, it doesn't pay to be negative. So maybe the better way of asking it is why has RevPAR been as weak as it has recently, particularly in the U.S. You saw Choice, minus 4% today. Wyndham had negative RevPAR in Q4. You had just about positive RevPAR in Q4. So what do you think the reason is for that weakness? I guess we can all take a view on how it evolves, but it's not like the economic data has been weak and just the curiosity of why RevPAR itself has been bad in terms of reported basis? And then the second question is on net unit growth. You are less guilty of this than others, but we've seen a lot of low financially contributing partnership deals signed recently that have been sort of offered as net unit growth, but obviously meaningfully less financials to come from those rooms than others. Why do you think that's happening so much now? It's not something that we'd see into such an extent as of prior cycles.

Well, thank you, Alex, for your questions. Let me just start with this last one first. Everything we try to do, and I won't speak for others, is directed at high value and ultimately high shareholder value growth. But we don't want just unit growth, we want fee growth at the right scale that delivers EBIT growth, that then delivers shareholder value. So we're pretty rigorous about our growth. That's why you see us not having master franchise or brands in China or other parts of the world. That's why you see that the partnerships we've done, like the Iberostar one, are directed at any growthy and not just that system growth, it's -- we've talked many times before with many of you about the difference of just unit growth versus real sustainable fee growth. So I can't speak for what others are doing. Our discipline here and we work hard is to look for unit growth that drives fee growth sustainably. And we'll maintain that. On RevPAR, I can't speak for the two companies you mentioned, Choice and Wyndham. I think there are some idiosyncratic issues to their segment which has came out of the pandemic really hot and then cooled off much more quickly. That's the economy segment in general. And there's kind of a idiosyncratic topic there that we don't play in economy, we don't play in those chain scales. We're pleased with our performance in '23. Against our weighted segments, we were above the previous segment's performance in RevPAR. And quarter-to-quarter, there could be variabilities. We obviously don't give projections. But when you look at the U.S. economy and the outlook for travel, there are still some structural tailwinds, whether it's the strength of the economy, whether strength of job growth, [indiscernible], recovery of some segments that give us confidence that there is still upside. The industry forecasters, like SDR are going for 4% RevPAR, that's their forecast. So there's still some headroom there. And I think what you have to look at is that the -- we are widely distributed around the world, too. That's one of our strengths is a lot of our conversation today has been about the U.S. and as an American who moved over here. I'm still very close and went to that market and close to the information there. But while it's our biggest market, the strength we're seeing around the world gives us confidence that we have a very balanced geographic platform that allows us to continue to grow around the world. Michael, did you want to add to that?

Elie, the only other thing I would say is there's -- just like we saw in 2022, there's always geographic mix and movements and things like that, that happened within the region. You may remember Florida being crazy and then all of a sudden, Florida going down as people moved and started traveling. You have seen similar dynamics come into that. One example of that is urban markets were really strong last year. They had been kind of the last market to recover . And so you've seen some of the other markets slow down a little bit. So I think you get a little noise in the system when you look at that. So like Elie said, when we look at how we're performing relative to our competitors and where we operate, we feel very confident about what we're doing and what we're delivering.

The one thing we haven't touched on this call yet today supply in the U.S., which was said to be 0.5 point last year, 50 basis points of supply growth, which really when you account for obsolescence in the industry, which is somewhere at least 0.5 point is basically no supply growth. Well, that no supply growth is actually supportive of continued RevPAR growth because demand is still very strong. So I think that our -- we're confident over the long term for the U.S. growth.

Our next question comes from Andre Juillard with Deutsche Bank.

Three, if I may. First one is about M&A. So you said that you were keeping some margin of maneuver to eventually do some bolt-on acquisitions. But don't you think that it would make sense to think about big Marriott -- or a bigger consolidation as Marriott has been doing it several years ago with Starwood or things like that. Just wanted to know if -- what was your view on that side? Second question about development and the fact that some destinations are still very focused on lease contract reserve and franchise and management. What is your view to continue to gain market share in such destinations? And third question about the profitability growth you've been guiding on 100 to -- 100 bps improvement on the margin. But we are in a cyclical industry, and we know that some downturns could impact you. So can you give us a sensibility on the RevPAR or top line growth?

Okay. I was wondering how long before an M&A question would come up. So look, we obviously don't comment on M&A or industry activity in that area. We know that we have added three brands through acquisition in my 10 years with the company, Kimpton, Six Senses and Regent, all of which are really at the heart of our, I think, industry-leading luxury lifestyle portfolio. It may not be the biggest yet, but it is, I think, the most relevant. It's a luxury and lifestyle of the future. The affinity, the desire for those brands around the world and the way we've grown them since we acquired them is really impressive. So we'll always look at brands that we can add to our collection. So Michael correctly said that we always look at that in our capital allocation, growing our business sustainably accretively is what we will look for first. But at the same time, we don't need to do that to continue our organic growth. We're in a position with a very strong portfolio a great geographic distribution penetration across high-value and high-growth markets, and we see great upside right there, even without any further additions, either organic or inorganic. And to your consolidation point, please keep in mind, I don't know what slide number it was early in the presentation, where we believe we're already consolidating the industry without M&A with 4% of the industry supply, but 10% of the pipeline, we're already consolidating it organically at a much lower cost of capital. We'll always look at M&A where it makes sense, but consolidation is already occurring against -- towards the preferred brand systems like ourselves. On development, we really try not to get into lease arrangements ourselves. We'll work with lessees where they're looking for a brand…

Yes. From a RevPAR sensitivity perspective, we're at about $11 million right now. Maybe I'll pass it to Stuart to -- he can talk you through how to kind of think about modeling that.

Yes. Andre, so if you look at the total revenue base from the fee business, it's just under $1.7 billion, but I think it's instructive to look at the 3-way split of that, which you'll see in the detail of the accounts. So the central revenues, that's about exactly $200 million. There's an IMFs, which went back to $168 million. The 2019 level was $151 million. So we've already surpassed IMFs, but they will continue to grow. They're not all the way back in the sense of every single hotel earning an IMFs. So we haven't topped out at $168 million of IMFs. And then what you're left with is the $1.3 billion, which is franchise fees and base management fees. There is an element of that isn't proportional directly to revenue, most of it is, which is why if you like, $1.1 billion of that, and therefore, 1% of that is the $11 million that Michael has mentioned, that is the direct sensitivity in terms of a change in RevPAR that would drop through from -- into a change in EBIT. And then on top of that, comes whatever change there is on IMFs, whatever change is being driven through central revenue and whatever change is coming through productive net system size growth.

[Operator Instructions] And we show no further questions at this time. I will turn the call back to our presenters for any closing remarks.

Well, thank you, everyone. It's been really great to connect with you today and to update you on our strategic priorities. We are very pleased with the year we've had in 2023, and our teams have done an excellent job that this [ has ensured ] us for success ahead. We look forward with confidence that in for this chapter of IHG growth. What we wanted you to take away from this event is our confidence in the strength of our track record and business model. And how our evolved strategic priorities and development initiatives will deliver a growth algorithm and strong shareholder returns from here. We hope you have gained a deeper understanding of the strength and opportunities to further develop our brand portfolio around the world, our leading enterprise platform and how those come together in a highly scalable and efficient model that delivers top line growth. It delivers expanding margins and excellent cash generation. This then enables us to invest back in the business to drive that growth even further, sustainably grow dividends and to return surplus capital, which is all as part of how we see IHG optimum shareholder value. On next market communication will be our first quarter trading update on Friday, third of May. Thanks for your time and interest in IHG, and I look forward to catching up with you soon.

And this does conclude today's program. Thank you for your participation. You may disconnect at any time.