a0924n
SECURITIES
AND EXCHANGE COMMISSION
Washington
DC 20549
FORM 6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 AND 15d-16
OF
THE
SECURITIES EXCHANGE ACT OF 1934
For 03
May 2024
InterContinental Hotels Group PLC
(Registrant's
name)
1
Windsor Dials, Arthur Road, Windsor, SL4 1RS, United
Kingdom
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F
Form 40-F
EXHIBIT
INDEX
99.1
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Changes
to System Fund Arrangements dated 03
May 2024
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Exhibit
No: 99.1
This announcement contains inside information
3 May 2024
InterContinental Hotels Group PLC
Changes to System Fund arrangements
InterContinental Hotels Group PLC ('IHG' or 'the Company') today
announces changes to its System Fund ('the Fund') arrangements.
Given the highly successful growth and development of the IHG One
Rewards loyalty programme, IHG has now established new terms that
govern assessment fees that owners pay into the Fund and the
sharing arrangements for ancillary fee streams such as those
related to the sale of loyalty points.
IHG manages the Fund for the benefit of hotels within the IHG
system. Owners
pay contributions into the Fund, which include a marketing and
reservation assessment and a loyalty assessment. Certain other
ancillary revenues are also included in the Fund. System Fund
revenues in 2023 totalled $1,564m, up by $331m or 27% from five
years earlier. IHG uses the Fund to make substantial investments
including but not limited to: marketing the individual hotel brands
and masterbrand; delivering a leading loyalty programme, IHG One
Rewards; and developing and implementing powerful technology, such
as the Global Reservation System, the IHG mobile app and digital
channels, and the new Revenue Management System. These substantial
System Fund investments thereby strengthen the whole IHG
enterprise.
The Fund is not managed to a profit or loss for IHG over the longer
term, but for the benefit of hotels in the IHG system.
The growth in the System Fund reflects the increase in IHG's system
size, expansion of the IHG One Rewards programme, and the success
of IHG's overall enterprise in driving more revenues to hotels in
the system.
Following a review of IHG's owner charges, IHG is lowering its
standard loyalty assessment fee that owners pay into the Fund. IHG
is also today announcing to owners other marketing and loyalty
programme benefits, including increasing certain Reward Night
reimbursements that owners receive back out of the Fund when points
are redeemed for stays, which will additionally improve IHG's
overall owner offer and owner economics.
The Fund has received a growing stream of ancillary revenues such
as those from the sale of IHG One Rewards loyalty
points. Historically,
IHG has allowed the full revenue generated on the sale of loyalty
points to be included in the System Fund. A portion of the revenue
from the sale of certain loyalty points, together with certain
other ancillary revenues, will now be recognised by IHG within its
results from reportable segments. Initially 50% of this will be
recognised by IHG in 2024, which is estimated to deliver
approximately $25m incrementally to revenue and operating profit
from reportable segments. This will annualise in 2025 when 100%
will be recognised by IHG. There is also expected to be further
growth in future years as the number of points sold continues to
grow, and due to the ramp-up effect of the IFRS 15 accounting
standard which defers revenue recognition until redemption of the
points previously sold.
As previously set out within
the Company's update on strategic priorities in February 2024, IHG
is actively developing opportunities to grow ancillary fee streams
such as points sales. These also enhance fee margin, and are in
addition to the 100-150bps annual improvement in fee margin on
average over the medium to long term that IHG expects to be
achieved through operational leverage.
IHG's hotel owners benefit from the substantial scale and
efficiency of the System Fund and will continue to do so as it
further grows and as the overall enterprise achieves new levels of
strength. Across all the changes being made to the System Fund
arrangements, IHG and the IHG Owners Association have worked
together to ensure that the overall capacity and effectiveness of
the Fund to invest and spend on behalf of all IHG system hotels
remains strong, and that the operation of the Fund continues to be
on a net nil surplus/deficit basis over the longer
term.
For further information, please contact:
Investor
Relations: Stuart Ford (+44 (0)7823 828 739);
Aleksandar Milenkovic (+44 (0)7469 905 720);
Joe
Simpson (+44 (0)7976 862 072)
Media Relations: Neil Maidment (+44
(0)7970 668 250); Mike Ward (+44 (0)7795 257 407)
For the purposes of the Market Abuse Regulation, the person
responsible for arranging the release of this announcement is
Nicolette Henfrey, EVP, General Counsel & Company
Secretary.
About IHG Hotels & Resorts:
IHG Hotels & Resorts [LON:IHG,
NYSE:IHG (ADRs)] is a global hospitality company, with a purpose to
provide True Hospitality for Good.
With a family of 19 hotel brands and IHG
One Rewards,
one of the world's largest hotel loyalty programmes, IHG has more
than 6,300 open hotels in over 100 countries, and a development
pipeline of over 2,000 properties.
● Luxury &
Lifestyle: Six
Senses Hotels Resorts Spas, Regent
Hotels & Resorts, InterContinental
Hotels & Resorts, Vignette
Collection, Kimpton
Hotels & Restaurants, Hotel
Indigo
● Premium: voco
hotels, HUALUXE
Hotels & Resorts, Crowne
Plaza Hotels & Resorts, EVEN
Hotels
● Essentials: Holiday
Inn Express, Holiday
Inn Hotels & Resorts, Garner
hotels, avid
hotels
● Suites: Atwell
Suites, Staybridge
Suites, Holiday
Inn Club Vacations, Candlewood
Suites
● Exclusive
Partners: Iberostar
Beachfront Resorts
InterContinental Hotels Group PLC is the Group's holding company
and is incorporated and registered in England and Wales.
Approximately 345,000 people work across IHG's hotels and corporate
offices globally.
Visit us online for more about our hotels
and reservations and IHG
One Rewards. To
download the new IHG One Rewards app, visit the Apple
App or Google
Play stores.
For our latest news, visit our Newsroom and
follow us on LinkedIn.
Cautionary note regarding forward-looking statements:
This announcement contains certain forward-looking statements as
defined under United States law (Section 21E of the Securities
Exchange Act of 1934) and otherwise. These forward-looking
statements can be identified by the fact that they do not relate
only to historical or current facts. Forward-looking statements
often use words such as 'anticipate', 'target', 'expect',
'estimate', 'intend', 'plan', 'goal', 'believe' or other words of
similar meaning. These statements are based on assumptions and
assessments made by InterContinental Hotels Group PLC's management
in light of their experience and their perception of historical
trends, current conditions, expected future developments and other
factors they believe to be appropriate. By their nature,
forward-looking statements are inherently predictive, speculative
and involve risk and uncertainty. There are a number of factors
that could cause actual results and developments to differ
materially from those expressed in or implied by, such
forward-looking statements. The main factors that could affect the
business and the financial results are described in the 'Risk
Factors' section in the current InterContinental Hotels Group PLC's
Annual report and Form 20-F filed with the United States Securities
and Exchange Commission.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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InterContinental Hotels Group PLC
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(Registrant)
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By:
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/s/ C.
Lindsay
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Name:
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C.
LINDSAY
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Title:
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SENIOR
ASSISTANT COMPANY SECRETARY
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Date:
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03 May 2024
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