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2024 RevPAR growth of 3% beats expectations

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Forecast higher-than-expected interest expenses

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Shares down 1.3%

(Rewrites, adds CEO comment, analyst, shares, peers; paragraphs

4,7,8)

By Raechel Thankam Job and Yadarisa Shabong

Feb 18 (Reuters) - Holiday Inn owner IHG is

returning more than $1.1 billion to shareholders in 2025 and

buying European urban hotel brand Ruby for $116 million, it said

on Tuesday, after annual room revenue beat expectations.

IHG, which also owns Crowne Plaza and Six Senses hotels,

reported growth of 3% in annual room revenue, above market

expectations, boosted by a pick-up in demand in the United

States and despite weakness in China.

Analysts had expected average revenue per available room

(RevPAR), a key industry metric, to grow 2.6% for the year ended

December 31, 2024, a company-compiled consensus showed.

CEO Elie Maalouf said he planned to expand the Ruby brand to

the United States and Asia. Currently the business operates 20

hotels in European cities.

"We would expect this (Ruby) brand to compete with

Hilton's Motto and CitzenM, both successful brands globally,"

analysts at Bernstein said in a note.

In the United States, its largest market, IHG reported a

RevPAR growth of 1.7% for the year. In China, RevPAR fell 4.8%.

IHG kept its medium-term targets, but projected 2025

adjusted interest expense to range between $190 million and $205

million, above analysts' consensus estimate of $174 million.

Shares in the company, which scaled all-time highs last

week, were down 1.2% in early trade, with Jefferies analysts

saying the worse-than-expected interest expense forecast could

drag profit estimates.

Peers Marriott International ( MAR ) and Hilton Worldwide ( HLT )

had forecast a downbeat 2025, hurt by poor performance

at hotels in Greater China, while Hyatt Hotels ( H ) reported a

less than stellar fourth quarter last week.

On Tuesday IHG reported annual operating profit in line

with market expectations.

It launched a new $900-million share buyback programme

and proposed a 10% increase in its annual dividend, taking

shareholder returns this year to more than $1.1 billion.

($1=0.9555 euros)