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Property, plant and equipment
 12 Months Ended
Dec. 31, 2023
Text Block [Abstract]  
Property, plant and equipment
13. Property, plant and equipment
 
            
  Land and
buildings
$m
    
 Fixtures,
fittings and
equipment
$m
       
  Total
$m
  
Cost
      
 
 
 
  
 
 
 
     
 
 
 
At 1 January 2022
      
 
105
 
  
 
299
 
     
 
404
 
Additions
      
 
15
 
  
 
42
 
     
 
57
 
Fully depreciated assets written off
      
 
–
 
  
 
(30
) 
     
 
(30
) 
Disposals
      
 
(7
) 
  
 
(5
) 
     
 
(12
) 
Exchange and other adjustments
      
 
(1
) 
  
 
(14
) 
     
 
(15
) 
At 31 December 2022
      
 
112
 
  
 
292
 
     
 
404
 
Additions
      
 
1
 
  
 
20
 
     
 
21
 
Fully depreciated assets written off
      
 
–
 
  
 
(15
) 
     
 
(15
) 
Disposals
      
 
(2
) 
  
 
(3
) 
     
 
(5
) 
Exchange and other adjustments
      
 
–
 
  
 
6
 
     
 
6
 
At 31 December 2023
      
 
111
 
  
 
300
 
     
 
411
 
Depreciation and impairment
      
 
 
 
  
 
 
 
     
 
 
 
At 1 January 2022
      
 
(53
) 
  
 
(214
) 
     
 
(267
) 
Provided
      
 
(3
) 
  
 
(17
) 
     
 
(20
) 
System Fund expense
      
 
–
 
  
 
(4
) 
     
 
(4
) 
Impairment charge
      
 
–
 
  
 
(10
) 
     
 
(10
) 
Impairment reversal
      
 
–
 
  
 
3
 
     
 
3
 
Fully depreciated assets written off
      
 
–
 
  
 
30
 
     
 
30
 
Disposals
      
 
4
 
  
 
5
 
     
 
9
 
Exchange and other adjustments
      
 
1
 
  
 
11
 
     
 
12
 
At 31 December 2022
      
 
(51
) 
  
 
(196
) 
     
 
(247
) 
Provided
      
 
(6
) 
  
 
(18
) 
     
 
(24
) 
System Fund expense
      
 
–
 
  
 
(4
) 
     
 
(4
) 
Fully depreciated assets written off
      
 
–
 
  
 
15
 
     
 
15
 
Disposals
      
 
2
 
  
 
3
 
     
 
5
 
Exchange and other adjustments
      
 
1
 
  
 
(4
) 
     
 
(3
) 
At 31 December 2023
      
 
(54
) 
  
 
(204
) 
     
 
(258
) 
Net book value
      
 
 
 
  
 
 
 
     
 
 
 
At 31 December 2023
      
 
57
 
  
 
96
 
     
 
153
 
At 31 December 2022
      
 
61
 
  
 
96
 
     
 
157
 
At 1 January 2022
      
 
52
 
  
 
85
 
     
 
137
 
The Group’s property, plant and equipment mainly comprises buildings and leasehold improvements on 17 hotels (2022: 16 hotels), but also offices and computer hardware, throughout the world.
Net book value by operating segment
 
            
 Americas
$m
             
EMEAA
$m
             
Greater
China
$m
     
 
 
  
       
Central
$m
             
 Total
$m
  
Land and buildings
      
 
51
 
   
 
 
 
   
 
1
 
   
 
 
 
   
 
–
 
   
 
 
 
     
 
5
 
   
 
 
 
   
 
57
 
Fixtures, fittings and equipment
      
 
31
 
   
 
 
 
   
 
4
 
   
 
 
 
   
 
–
 
   
 
 
 
     
 
61
 
   
 
 
 
   
 
96
 
 
      
 
82
 
   
 
 
 
   
 
5
 
   
 
 
 
   
 
–
 
   
 
 
 
     
 
66
 
   
 
 
 
   
 
  153
 
Impairment and impairment reversals
2022 impairment
An impairment charge of $10m was recognised in the year on property, plant and equipment relating to one hotel in the EMEAA region. A further $2m impairment of
right-of-use
assets was recognised in relation to the same hotel. The charge arose, and was classed as exceptional, due to recent cost inflation which is impacting operating costs but also the projected variable rent payments. The assets were measured at value in use, using a discounted cash flow approach based on the hotel’s five-year plan. Cash flows beyond the five-year period were extrapolated using a long-term growth rate which did not exceed the long-term average growth rate for the relevant country. Estimated future cash flows were discounted at a
pre-tax
rate of 9.6%. The recoverable amount was $nil.
2022 impairment reversal
Impairment reversals of $3m were recognised in relation to the UK portfolio (EMEAA region) and arose as a result of the renegotiation of contractual agreements which enhanced the cash-generating potential of those hotels. The recoverable amount was measured at value in use, using a discounted cash flow forecast used to assess the new deal with rentals based on the agreed contractual terms. A
pre-tax
discount rate of 14.2% was applied.
In both 2022 impairment tests, hotel specific plans were used which used the IHG UK RevPAR forecasts adjusted for factors specific to the individual property (such as revenue from food and beverage facilities and the impact of renovations on occupancy and rate).