Good morning, everyone, and welcome to IHG's Conference Call for the 2023 Half Year Results. So I'm Stuart Ford, Head of Investor Relations at IHG and I'm joined this morning by Elie Maalouf, our Group Chief Executive; and Michael Glover, our Chief Financial Officer. Just to remind listeners on the call that in discussions today the company may make certain forward-looking statements as defined under US law. Do please refer to this morning's 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. For those analysts or institutional investors who are listening via our website can I remind you that in order to ask questions, you will need to dial in using the details on page two of this morning's RNS release. The release together with the accompanying presentation and the usual supplementary data pack can be downloaded from the Results and Presentations section under the Investors tab on ihgplc.com. [Technical Difficulty]

…..business for the past eight years. I'm honored to take over as Group CEO and excited to look ahead with our talented teams and owners to an important next chapter growth for IHG. In a moment, Michael will talk you through our financials for the half. But first let me share some key lights. We had a strong first half across our financial results hotel openings and signings, which were all significantly above last year. Trading continues to be very healthy. RevPAR improved year-on-year across all our markets and has now exceeded 2019 pre-pandemic peaks for four consecutive quarters. H1 global RevPAR was up 24% year-on-year and up 8.7% versus 2019. Q2 RevPAR was up 17% year-on-year and up 9.9% versus 2019. Looking at system size our gross growth was 6.3% and net growth was 4.8%. We opened 108 hotels, 40% more rooms than H1 last year and we signed 239 hotels that's 11% more rooms than last year. We continued to successfully capture conversion opportunities which represented around 40% of signings and openings. And our pipeline increased 3% year-on-year to more than 286,000 rooms representing 31% of today's system size. With our fee margin expanding by 3.3 percentage points this led to an operating profit of $479 million, up 27% year-on-year. We are confident in the strength and continued growth of our highly cash-generative business. Our current $750 million share buyback program announced in February was 47% complete and we are pleased to declare an interim dividend 10% higher than 2022. In recent years, we have strengthened our enterprise platform through significant investments in our master brand loyalty program technology and distribution channels. Our brand portfolio has expanded and diversified through organic launches and acquisitions of seven brands since 2017. We continue to invest in all our brands by optimizing and elevating their format design service and quality and by increasing their scale. We continually assess our brand portfolio for further growth opportunities that address clear long-term trends and sizable market demand from guests, loyalty members and our owners. In line with that approach, we are very excited to announce today that we will be launching a new best-in-class, mid-scale conversion brand with opportunity for considerable scale. I'll talk more about this later in the presentation. But first let me hand over to Michael who will take you through the details of our financial results for the half.

Thank you, Elie, and good morning everyone. I'll start with our headline report results from reportable segments. Revenue of $1 billion and operating profit of $479 million represented growth of 23% and 27% against 2022 respectively. Revenue from the fee business increased by 21% to $799 million, or by 24% on an underlying basis which is at constant currency and excludes the small amount of liquidated damages received in the prior year. Operating profit from the fee business increased by 27% to $470 million, or by 30% on an underlying basis. Fee margin once again made considerable progress improving by 330 basis points to 58.8%, and I'll touch on this more during the presentation. Adjusted interest decreased to $58 million. However, for the full year we would still expect this increase to be between $130 million and $140 million, which is the same as our previous indications. Our effective tax rate was 25% down three percentage points from half year 2022. We received around a two percentage point benefit from the one-off impact of legislation change in the Middle East during the half, which will subsequently blend out to a one percentage point benefit for the year as a whole. We therefore anticipate a full year effective tax rate of around 26% rather than the 27% as previously indicated. Taken all together, along with the 6% reduction in our share count as a result of the share buybacks earnings per share increased by 50% to $1.827. Overall, these results demonstrate strong financial performance in the first half of the year with it being particularly pleasing to see progress ahead of 2019 level, across all of our headline metrics. Moving on to our RevPAR performance by region, in the [Technical Difficulty] Americas there was no let-up in demand with RevPAR maintaining…

Well, thank you, Michael. We operate in a very attractive industry benefiting from long-term structural growth drivers of expanding GDP, growing populations, rising middle class and wealth, and people's fundamental desire to travel and physically interact for both business and leisure. These structural drivers have led the industry's global revenue CAGR to outpace global economic growth. This attractive demand also supports hotel supply growth and healthy asset returns for hotel investors. Leading global hotel brand businesses like IHG continue their long-term trend of taking market share of both demand and supply and this trend has accelerated in recent years. IHG has 4% of the global industry's open rooms, but we have over 10% of the pipeline. This puts us in a strong position to continue increasing our scale and capturing market share. Our well-invested portfolio of 18 brands forms a powerful network of 925,000 rooms across more than 6,200 hotels. We have geographic reach across more than 100 countries and a full range of product segment diversification from mid-scale to upper luxury. Our pipeline of 286,000 rooms represent secured multiyear growth of over 30% of today's system size. We have a well-proven ability to successfully drive long-term growth in both demand and supply, with RevPAR and net system size CAGRs over the prior decade growing around [Technical Difficulty] strategy which has returned $15 billion to shareholders since 2003. [Technical Difficulty] most recently, with our shift to rolling share buybacks. Critically, we have built a high barrier-to-entry global business through the investments we have made over many decades to grow our scale strengthen our enterprise platform and deliver a high-margin, high-earnings growth business. And all of this didn't change with the pandemic. IHG is a stronger and more resilient company today. There are short-term macro pressures, but you've seen and heard…

Thank you. [Operator Instructions] Our first question today comes from Jamie Rollo with Morgan Stanley. Your line is open.

Thanks. Good morning. Hope you could hear me okay. Three questions please. First, just in terms of -- just the first one you both sort of presented a set of results since the senior changes. Any sort of changes to strategy or anything you might be doing differently going forward? It doesn't sound like it, but just wondering what your sort of thoughts are there. Secondly no signs of a slowdown but on the Americas the charts are showing you can see the RevPAR sort of flatlined for sort of six months now versus 2019. And on your US charts sort of room nights it looks like leisure business and groups are all sequentially weaker in Q2. I'm just wondering I mean are you concerned about that? Do you think that's all displacement to international markets? And also I don't think the company has given your actual US performance in Q2 to help us track it versus the market. So if you could touch on that as well. And then finally your sort of views on net unit growth. It sounds like from the statement you're sort of happy with that sort of 4% soft guidance number but some of your US peers walked down their underlying numbers a little bit and you're seeing a sort of higher conversion mix. You talked about some constraints. Any thoughts on the 4% for this year and what that might mean for next year as well? Thank you.

Thank you, Jamie. I look forward to seeing you in person later in the week. Since joining IHG in 2015 on the Executive Committee and then a few years later on the Board, I've been integral to the development of our strategy, integral to its execution not just in our largest market but also on an enterprise level. We built a very strong foundation an expanded powerful brand portfolio, stronger enterprise systems through loyalty technology, commercial systems and a global distribution really in the best strongest fastest-growing markets that have great domestic potential but also great outbound and inbound potential. So we're building on a very strong foundation. I did start July 1. We'll be very focused on sharpening execution, accelerating our growth but also evolving because this is a dynamic industry. It's a great wonderful dynamic industry with strong secular tailwind, growth structural benefits but you have to evolve over time. When I joined the company in 2015, I think we had 10 brands, today 18. We're announcing a 19th coming along. So part of our strategy is to evolve our strategies, say, relevant to our guests, relevant to our owners, relevant in our local markets. So as we go forward, things will evolve just like we announced today with our new mid-scale conversion brand and we'll keep everybody updated on that.

Let me maybe address the US performance or America's performance question. First, I think if you look in the FCA, it's on Page 17 of the FCA. But in terms of RevPAR performance for the US versus Q2 versus 2023 was at 4.4%. That follows a Q1 that was at 14.8%. But as we mentioned in the Q1 announcement, we were lapping some COVID periods and we expected that to get covered. To give you an idea of what that looks like against 2019 Q1 2023 versus 2019 was at 10 percentage points versus Q2 at 10.6 points versus 2019. So overall, and as we look at the overall industry in the US it still remains strong and feel comfortable with kind of the -- how it's going to progress in the future. We see strong unemployment numbers and improving consumer sentiment. So we feel like that's a good tailwind for us as we move forward into the fourth quarter and third quarter. In terms of system growth, yes, we are comfortable with the 4%. As we talked about we've done 4.8% year-over-year. And in the first quarter, we were at 0.4% and at 1.5% year-to-date. So we feel comfortable with the projections and the guidance that we gave of 4% -- of around 4%.

And any early thoughts on next year that 4% accelerate or decelerate you think?

Look, I think we're pleased with the progress we're making across the full enterprise. I think we had strong signings in the first half of the year. That builds good momentum. Our new brand launch will be also accretive to our growth. Our markets are still recovering very well. So we're confident in our ability to continue to grow our system at competitive rates.

Thank you very much.

Hey thanks Jamie.

We now turn to Vicki Stern with Barclays. Your line is open.

Yes. Good morning. Just firstly, I want to turn to China. So you mentioned that you're expecting a slightly softer back half trend with that lack of international travel. Question just sort of firstly on the near-term outlook for demand generally what you're seeing on the ground from a domestic standpoint and also the sort of unit growth pace of recovery that you're seeing. But just stepping back from that your longer-term perspective, now on China obviously, that's been sort of key second leg, as you look forward to the medium-term are you thinking of that's as attractive an opportunity for you given obviously, some developments there in the last few years? Second one just -- I think you talked when you were doing Iberostar deal about looking at other similar sorts of deals like that just sort of wondering on progress there. Is that something you're still expecting? And then finally on the US development backdrop just sort of what you're seeing on the ground now? Obviously, there's been a lot of chat going around sort of slower development on openings and issues within higher interest rates and so on. Just it doesn't sound as if that's sort of materializing in terms of any incremental weakness in your signings pace and your openings but a bit of color as to what you're really seeing and expecting. And with that, if you can give any sense on the under construction percentage of your pipeline please?

Thank you, Vicki. So look in China have been there for over 40 years, we have over 550 hotels opened, another nearly 600 in the pipeline. If you just look at the long-term, the penetration of hotel rooms, per capita of the penetration of travel in China is just a fraction of what it is in more developed markets like Europe and the US. So there is really multiples of business potential opportunity. We've been there over 40 years. We take a long-term view. We think it's going to be a great long-term potential for us. So our outlook is unchanged and very positive. I mean in the short-term, domestic travel has actually recovered very well. If you look at our business in China, it had slightly exceeded 2019 in domestic business. Clearly, the air capacity constraints, inbound and outbound are out of our control. They are recovering. It's a matter for airlines and aircraft manufacturers to resolve. But there's actually a lot of optimism on that. You might have noted at the Paris Air Show, there were just record orders for aircraft. So, you have airlines and aircraft manufacturers very positive about the global outlook for international travel. That's why they're ordering billions of dollars of aircraft. And so, we think that as a long-term outlook, we still has to recover to that international in that capacity, but that's going to develop over-time and we're optimistic about that. So partnerships, yeah, we're very pleased to have entered into this long-term exclusive partnership with Iberostar, making very good progress on hotel openings on bringing benefits to our loyalty members who can now stay and earn benefits and earn points there moving ahead successfully on integration of our channels and of our joint technology. And look, at the same time, that we're doing is actually building an enterprise platform that is compatible for other partnerships. And as those develop, we'll be pleased to update you and others on it. US development was your third question. So look, it's a knowledge that the pipeline of construction, the industry's pipeline of what was under construction in the United States coming through the pandemic -- coming out of the pandemic slowed down. Those are public statistics, then we had interest rates increase and inflation and supply chain issues. We see a lot of that starting to resolve supply chain issues are mostly in the rearview mirror, more expert people would comment on interest rates, but it seems that general consensus is, we're closer to the end of interest rate increases, not sure exactly when, but we're closer to the end than the middle or the beginning. And inflation statistics continue up until now to moderate. So that seems to be a little more of a constructive environment. And I think that that is sensed by our owners, who are increasing signing and showing confidence in building and opening IHG Hotel. So we think the trajectory is going in the right direction.

What I would add there Elie as well is that conversions have picked up and that's really supporting our development activity in the system growth. We mentioned in the scripts that 40% of our openings and signings were conversion brands and we're launching a new brand to further support that with our new mid-scale conversion brand. We're really excited about what that brings. It creates a great opportunity for owners at a lower price point to get into and take advantage of our leading systems and technology and tools and enterprise delivery. So we're really excited about what that can bring and help support that as the construction environment continues and lending environment continues to get better over-time.

I mean keep in mind that as the industry in the US is projected to have low supply growth. I think SDR last said 0.5% which frankly when you include sort of exits from obsolescence is basically not much. On the other hand, that is very supportive of continued RevPAR growth through rate growth which we've experienced and we think that there's more there because, really in real terms, rate has only kept up by good inflation impact only this year cutoff with inflation. That rate growth and RevPAR growth fuels a solid hotel cash flow performance which then encourages owners to finance the hotels which encourages lenders as they recover from the turbines this year and the higher interest rates to then finance hotel growth. So, that cycle we're confident we'll restart because hotels are performing well. And actually the lower supply today will encourage future supply growth.

And just to finalize that question, we have about 40% of our pipeline under construction.

Thanks very much.

Our next question comes from Jaina Mistry with Jefferies. Your line is open.

Hi. Thanks very much for taking my questions. If we could go back to net unit growth again for 2024, it looks like consensus is on 4% growth. Now, I appreciate you don't want to give guidance for next year, but how has your confidence changed in hitting consensus to 4% growth next year? How has it changed over the last three months? And then secondly around share buybacks. I see that your net debt-to-EBITDA is at the midpoint of the 2.5 times to three times leverage range. Do you see any scope for upside there, given that it appears trading is still strong and there's still scope for you to move to the upper-end of your net debt-to-EBITDA range. And then lastly, I just wondered about your outlook on the US business. Thank you very much for putting in commentary around STR recoveries over the next two years. But it feels like next year, we should see the first year of normalized growth for the US. And how do you expect the market to grow next year? Is it a low single-digit type of growth in terms of first half next year? Anything you can give there would be very helpful. Thank you.

Okay. I'll take your first and last question and Michael will talk to you about the balance sheet and capital returns. We have not provided guidance for next year, neither we expect to. Our net unit growth, we're confident as Michael said about the progress we're making this year around the expectations that are out there. We are pleased with the progress of our signings of our pipeline, maintaining 40% under construction. We're very pleased with the progress we're making in conversions, which have a higher visibility and quicker execution of conversion from pipeline to open. So we think things are going in the right direction and we're optimistic that we're able with our portfolio with our strong enterprise, and with the progress we're making with owners to continue to achieve competitive rates of growth. On the US market, I mean we know and see just like you do the industry forecast for next year, I mean forecast is not a pure science. It has a lot of art to it. But we don't see -- I think as Michael said earlier, we're not feeling any softening in demand in any of the segments that we operate. So on the leases side, it's been very strong continue to be strong. We think there's been some structural changes in how people are traveling for leisure. They're staying longer because they're mixing in work. So Thursday used to be check-out day, Thursday now is check-in day and that's extending the week for us which actually healthy for our hotels. And so there may be some fewer air trips but people are staying longer. We're getting the same or more room nights out of it. On the business side, globally we got back to 2019 in terms of business revenue a little more…

Thank you. And on share buybacks, if we look at what we're doing this year, we're looking at returning greater than 8% of our share capital to shareholders. So we feel like we're in a great position right there. Obviously, we're very comfortable sitting in the 2.5x to 3x net debt to EBITDA. And we are also being more invert about the fact that our model is highly cash generative and we will be looking at doing rolling share buybacks going forward. Obviously, it's a decision for the Board and the Board will continue to evaluate that as we move forward.

If I could just follow-up on net unit growth. It sounds like sentiment might trust and things are moving in the right direction. Do you expect to gain share or in fact in the data that you're seeing are you gaining share of the pipeline at the pace that you expected?

We've been constantly gaining share globally from independents and other competitors. It's visible. 4% of open hotels, 10% of pipeline so embedded already, we have a share gain before we even sign more hotels and I think take share further in the market. So that's not just the United States, but that's really globally across all of our major markets.

Excellent. Thanks very much.

Our next question comes from Jarrod Castle with UBS. Your line is open.

Thank you, and good morning, everyone. I don't know how much you can say, but just your new conversion brand. Just interested in any thoughts in terms of how you think it's going to be better positioned or at least compete with other new conversion brands like Hilton Spark. Is it going to be on cost or kind of the type of product or distribution or everything. So any color you can give now. I know it's early stages, but that would be interesting? Secondly, just interested in any of your thoughts. The fee margin, I guess mathematically should keep going up. Is there any kind of I guess cap on where you think it could get to? I mean obviously, materially above 2019 levels, but just any thoughts as ever do you think there is like a roof to that? And then thirdly I guess, something you don't spend too much time on but just interested on any thoughts on IHG Residences how you see the development of those banks?

Let me take the first and third one and then Michael will talk about the margin. Look, we're very excited about the soon to be announced launch of our new midscale conversion brand. It's a very big market over 700,000 rooms over 9,500 hotels. And we've just heard from guests that they want a more trusted brand, an ISG brand in the space and we've heard from owners that they would like to be part of the IC system while maintaining a lot of the elements of their current product which may be in very good condition very new but needs to have the trust and strength of an IHG system. So that's why we're targeting the space. It's really different than what we already offer in our portfolio. New, doesn't really overlap much with what we have, which is kind of the philosophy we have in all our brand launches. We look for distinct spaces that are accretive, that have great growth potential or guests want to stay and owners want to invest. We've heard loudly from our owners and our guests about it. We have 100 owners with definitive interest and we think it's going to be an incremental growth driver for IHG. On Residences, yes we absolutely feel like we have an opportunity in residences, especially now that we've really broadened our luxury and lifestyle portfolio with Six Senses, with Regent, with Vignette and even Kimpton and Intercontinental are getting interest for residences. But I think over half of our Six Senses deals in the pipeline have a residences aspect attached to them. Many of our region properties in the pipeline have residences project attached to them. And that just shows you the strength of our portfolio the additions we've made that take us into the new fields of profitable fee growth.

Yes. And in terms of margin, I don't think we see a cap on that right now. We – we have a really strong model, in which we say we're going to grow 100 to 150 basis points of margin every year. We've got a lot of room in EMEA and Greater China, as they move to a more franchise model over-time. So you can see kind of what that does for the Americas. So I think certainly in the short and mid-term, we feel very – and even kind of longer-term we feel great at delivering that 100 to 150 basis points of margin expansion and continuing to invest in the business as part of that.

All right. Thanks very much.

We now turn to Richard Clarke with Bernstein. Your line is open.

Hi, good morning. Thanks for taking my questions. A couple of questions on China, if I may. First of all, you said RevPAR is still a bit below 2019. I think we've had Marriott and Hyatt say their RevPARs were towered above 2019. I would have thought you have a higher domestic need, so just anything that's separating you from those is it more new builds in your chain scales. On the other side, your margin in China has recovered a lot drove probably the beat of the half year. And anything one-off in that or has that exit the pandemic as a 60% plus fee margin business? Is that just growing faster? And then maybe just one on Holiday Inn. It looks like Holiday Inn, it looks like RevPARs are back to decent growth now adding some hotels but another 27 Holiday Inns have left the system quarter-on-quarter. Is that still you taking those out of the system or are these the owners exiting and is there any sign that Holiday Inn is beginning to bottom out in terms of its drag on unit growth?

Yes. So Richard let me first start with the question on China. I think as you think about China and how the recovery is happening certainly in the first half of 2023, you've seen really strong growth in your Tier 4 markets, particularly resort locations. As you know, we're highly distributed across Tier 1, Tier 2 and Tier 3, certainly as we move into more franchise model with Holiday Inn Express in some of those markets as you go into the Tier 3 and 4, having recovered certainly to the level that we saw in the Tier 4 and resort locations. So overall, we're very pleased with our performance and we see very strong growth year-over-year and continued growth moving forward.

Okay. You had a question about Holiday Inn. Before that you had another question Richard, right?

Yes. So you've seen another 27 Holiday Inns, I think exit quarter-on-quarter.

Yes. Look, we're very pleased with the progress, we're making with both Crowne Plaza and Holiday Inn. We're signing more hotels, opening up really great either fully renovated or new builds in both brands. Now the exits from half year to sometimes in the quarters can be lumpy across the year but we're confident that we're on the right track to deliver a stronger state, growing to state and a higher quality estate and one that over the long term will have structurally lower exits.

And then just a question on the China fee margin has jumped up. Is there anything one-off in that or are we now a 60% margin business in China?

There's nothing one-off in that Richard. We would expect again as we move the franchise in China and that's over-time as RevPAR continues to grow in the middle cost growth as demand grows within the region we would see that continue to grow.

Thank you.

We now turn to Leo Carrington with Citi. Your line is open. Leo, your line is now open. We move on to Jaafar Mestari with BNP Paribas. Your line is open.

Hi. Good morning, everyone. Just one from me please, circling back on openings. How much of your expected 4% net openings this year will be from the known Iberostar additions? Because obviously the big additions of Q4 last year will not be in the 12-month figure. But if I remember correctly you're still bringing in some additional Iberostar properties this year. So what's 4% ex-Iberostar can you give out that number?

Well, I think we brought in so far 10 this year, 10 properties at 3,700 rooms and there are another 17 that were not owned by Iberostar, where we're in conversations with the owners is to convert to the IC system, but the conversations are going very well. It was part of our plan along. We're on track to get there. So, I think, we're -- I don't have for you what exactly that percentage of that 4% it would be, but we can get back to that. But it's we've opened 10 and it's another 27 -- sorry, I said, 17. We opened 10 so another 27 that we expect to open for the year.

Year-to-date at 4.8%, if you take out Iberostar out of that we're 3% growth ex-Iberostar year-to-date?

Yes. Because over the last 12 months, that's a very severe adjustment because there's a really big group of them that joins in Q4 that's still in that number. So 4% for the full year I'm not going to be adjusting by 1.8 points to get to an ex-Iberostar number. It is going to be a little bit less than that, but it's still going to be part of the 4%.

Yes. It will depend on how many of the additional hotels come in. As we said, we've got 10 in the number this year and 3,700 rooms and it will just depend on the negotiation and work with the Iberostar teams on the next ones that come in and how many of those come in.

Okay. Super. Thank you very much.

Our next question comes from Tim Barrett with Numis. Your line is open.

Hello. Morning both of you. I had just two things left on coming back to the topic of leisure demand if that's okay. You've alluded to the fact that there was some lumpiness in quite big vacation markets. I wondered, how that looks in Q3 and what you'd expect in terms of the next few months? And then secondly, longer-term, you mentioned some really interesting things about how people travel. I guess that's occupancy neutral, but can you say what impact you would expect on rates as people change their behavior? Thanks very much.

I think on the lumpiness, in general, we're so broadly distributed across so many markets, so many countries, and so many segments. Yes, we're pleased to be in many resorts and more coming, but that's really not the biggest part of our business where all over the domestic markets where we're big in the United States where all 50 states and across the whole patch same thing in China, we're a big domestic player. So we're not really a concentrated resort or urban player. We're across those and many other places. So it’s -- it a would be unusual, although, it can happen there, where one particular market can make a difference to our group results. It's just we're not as concentrated as say some other operators or real estate investment trusts or players of that nature. Second in terms of leisure, yes, there's been we think a structural change in how people are experiencing leisure. First of all, they want to experience more of it. They're going to more places. They're willing to prioritize travel spend versus other spending. We're seeing some other sectors not recover as quickly as ours has. We don't think it has an adverse effect on rate. We've haven't -- we've seen rates just increase rapidly, although, we think there's more headroom, because on an inflation-adjusted basis, we're just reaching parity with inflation. So we don't think we've over-extended that. We think there's more room. And I think the fact that people may be staying longer on their trips is not a driver of adverse rate reaction at all. So we think we have tailwinds both in total stays and in rate ahead of us.

That's really helpful. Thanks a lot.

Our next question comes from Leo Carrington with Citi. Your line is open.

Good morning. Can you hear me?

Yes, we can Leo.

Thank you, Elie. Thanks, Michael. Three questions, please. In terms of the new mid-scale brand and how this fits into your existing conversion activity, you referenced the conversion costs versus Holiday Inn Express. Does that imply you're targeting owners who might be currently considering Holiday Inn Express conversion or was that just to give us an indication of the costs? And on this brand maybe you will, but why didn't it make sense to just launch it now as a avid derivative? What steps up apart from avid aside from the conversion piece? And then secondly, just briefly on Iberostar openings, are the Q2 openings in line with what your expectations were for the start of the year? Ad in terms of the run rate and the openings for the rest of the year of Q2 quarter openings a sort of sensible assumption for the rest of the year? And then lastly just to follow-up on margins. In terms of thinking about the progression is there an argument that the lower development activity might be flattering margins? Is there less sales activity, but differently would you expect an acceleration in development at some point to weigh on margins? Thank you.

Mike, why don’t you take the margin question first?

Okay. In terms of development activity weighing on margins, no, I wouldn't expect that to weigh on margins. Actually as you think about how we're moving forward and if you see the more we franchise hotels around the world and we grow actually that should help contribute. And as we expand our brand portfolio I feel like I think we're very confident we can continue to grow margins and I don't believe it will be a drag on margins.

I mean if you also -- beyond our sort of more limited service franchise expansion around the world our luxury and lifestyle we have 13% of our distribution today, but 21% of our pipeline. Those come at higher fees substantially higher fees per key which is also accretive to margins. So we think we have a fair amount of runway. In terms of the Iberostar openings, I think, we're on-track. It's what we expected. I mean sometimes things happen sooner sometimes things happen later, but generally we expect it for the year. We're in ongoing conversations with the owners for the rest of the year. And so I think that's been very good progress in generally what we expected. Your third question was with regard to our new midscale brand had two parts. The owner value proposition is pretty clear. They have good assets today. Now they're in various configurations. Some could be 80 rooms some could be 200 rooms. Some could have room sizes of 250 square feet some can have room size of 350 square feet. There are going to be various dimensions and varying levels of service but we're going to narrow say mid-scale limited service structure and it makes less sense for them to convert to Holiday Inn Express for which we have very clear criteria, very strict and defined design criteria service criteria. It's the most successful retail brand in the world the largest brand in the world and it has a very clear pattern versus this allows an owner to join IHG system stay and become a high-quality hotel, but maintain some of their own physical characteristics that are actually proving to be pretty successful. But they want the lower distribution costs, stronger loyalty program that we have better LTA contracts that we have, strong global sales team that we have and all the enterprise strength that we have. So it is really different and they're not generally considering you being one of our say established hard brands versus a more soft conversion brand like what we're launching. And so therefore at least to your last question is why this not be an extension of avid? Avid is actually a very defined product, a room that is 30% smaller than Holiday Inn Express and about 200 square feet a grab-and-go breakfast while this product that we're launching will have a hot breakfast could have meeting space, while avid has no meeting space a great gym but it's a very efficient simple product. The basic has done exceptionally well exclusively new build. So it is really a different product. And this won't be competing either with avid or Holiday Inn Express we'll be targeting a large market of its own that we have not heard before entered.

Thank you very much, Mike and Elie.

Thank you.

We now turn to Alex Brignall with Redburn. Your line is open.

Good morning. Thank you very much. Just want to -- so [indiscernible], but I will try it in other way. So for 2024 our net unit growth obviously analyst Jaafar alluded to a proportion of your growth this year is from Iberostar. And you've obviously said that there are other mass conversion deals that you can do. So I'm just wondering if we're kind of looking forward should we think of the base or the comparative for 2024 being the 4% which includes a big lumpy mass conversion deal or the lower number of probably something like 3% that would be for want of a better word the organic net unit growth figure. I guess the reason I ask is because as you alluded to at the time that the Iberostar deal comes a different probably lesser economics than a sort of organic pipeline opening or signing. And so as it relates to modeling that it's I guess an important consideration. Thank you.

Yeah. Just to your last point about modeling and profitability what we actually said is that the fee take is yes as a percentage lower, but gross revenues not just room revenues and package revenues which in this all-inclusive resort business include food and beverage and other services. And so the actual gross room rate is much higher. And we believe that in the net, it is either equivalent, if you modeled it to this equivalent room revenue or it nets out to a similar fee take. So we did not indicate that it would be lower profitability. We said it's a different fee structure, but equivalent to our current franchise arrangements. So, I just want to make sure you understood. I think look, we have opportunities for conversion and we're showing that in our signings and our openings that are either say more portfolio as you have with Iberostar or more an addition of smaller portfolios or individual hotels. So, we think that the opportunity for some conversions is not limited just to partnerships like Iberostar, although, we're always looking for more similar accretive profitable ones, but also we can build a trajectory from smaller portfolio bonders that want to join our system or individual tails of owners on your system. And that's visible in our figures this year, where we might have a much higher proportion of openings and signings coming from conversion.

Yeah. I was exclusively thinking of it in terms of the fee margin that we model rather than adjusting to ADR. Thank you.

Thank you.

Our next question comes from André Juillard with Deutsche Bank. Your line is open. André Juillard: Good morning. Two questions, if I may. First one about development and the branded market share. When we look at the US market as you mentioned, it's branded at around 70%. In Europe, it's almost contrary. Do you have visibility on what could be the market in the next few years? And what do you expect the branded market share to be in the main market in the next few years just to try to have a better visibility on how things could go down. Second question, about return to shareholders. You've been announcing €150 million share buyback program down at 47%. And we see that, you still got a margin of another on that side. If you had to announce some new returns would you more focus on share buyback or on dividend? Thank you.

Thank you. I'll take first question about branded market shares US versus Europe. I mean, you correctly observed that, there is a large unbranded independent market in Europe and that's a clear opportunity for us. Our brand portfolio today is really geared towards that. The addition of Kimpton, the addition of the net of voco and now with our new mid-scale conversion brand it gives us more ability to have conversations with owners that have good quality high-quality independent brand. So seeing their costs increase and seeing the desire to benefit from reach of global corporate customers, reach of global leisure customers and access to our 115 million loyalty members around the world, I mean, these are irreplaceable platforms that an independent hotel no matter how successful they are, how great the reputation is in local market cannot construct an app like we have that is leading in the industry today increasing bookings 50% year-over-year through the app. I mean, those are platforms that are highly attractive independent hotels and I think that we'll continue to progress our share. How the rest of the industry progresses? Well, we're focused on our trajectory in this market and see good opportunity.

André on the dividend question we really have three uses of cash. First use of that cash is to invest in the business for growth. And then the second use is to grow our ordinary dividend, and then the return surplus cash to shareholders. We have a target range roughly two, two and a half maybe couple. So we would look at that and with earnings per share growth kind of grow the dividend accordingly and then excess cash go to shareholders. And so we do prefer share buybacks when we return cash to shareholders. So I would look for us to kind of continue to do that as our model will generate kind of great cash returns as we move forward. André Juillard: Okay. Thank you. Just a follow-up on my first question. I don't want to go too much in detail, but the particularity of Europe is that the average size of the hotel is relatively small. And that is one of the reasons why branded groups had more difficulties to develop in Europe compared to the US where it's very well standardized, don't you think that you'll probably have to consider some smaller hotels or different ways to accelerate growth in Europe?

I think the path is less related to size than the brand portfolio. Traditionally, our branded portfolios were much more prescriptive the brands were what we call hardware brands that had very defined design criteria size criteria service criteria, and therefore it's much harder to adapt a very successful even smaller independent hotel in Europe and therefore the gap was too far to reach a neutral win-win. But now with a more adaptable brand portfolio voco, Vignette, Kimpton our new mid-scale conversion brand, now we can meet owners' desires to maintain what's a very attractive hotel, which albeit may have fewer rooms, but at higher rates. So, really what matters in is what is the total opportunity? What's the total profitability of the hotel? So, 50, 60 rooms in a nice part of Europe can be equivalent gross room turnover of 120 rooms in some other parts of the world, even in the United States. So, I think the opportunity is there. It just was having the brand portfolio that unlocks that opportunity. Today, I think we're in a better position to do that. André Juillard: Okay everyone. Thank you very much.

We now turn to Ali Naqvi with HSBC. Your line is open.

Hi, good morning. Just a couple of questions from me please. Are you seeing any improvement in the booking curve or visibility? And then is there any normalization there versus prior pandemic booking trends. Second question, just on your contract negotiations with corporates, how much of your room inventory or room nights does that cover in terms of pricing? And how much is left off the table since your last set of negotiations versus where ADR is trending now? Thank you.

Sure Ali. Let me take the first one on kind of booking trends and the booking window. I think we are still seeing really pretty short booking windows. In fact in half one, 62% of our bookings occurred within one week and only 15% were greater than 31 days. So, as you can see the booking windows still remain short. But as we said we do still have confidence in moving forward with RevPAR.

I may also add on the booking window. Part of it may be just the different way people are traveling their comfort in using our technology to find the inventory and find the rooms by making our technology more accessible easier to use. And that's not necessarily an unwelcome thing because frankly as the booking window tightens it gives hotels, sometimes those long-dated bookings came at substantial discounts. So, it's not necessarily an adverse development. You just have to adapt your revenue management systems and your revenue management philosophy to take advantage of it. I think we've been very nimble in that respect. Your second question was--

Just regarding corporate negotiations?

Yes, corporate negotiations. Now, we concluded those corporate negotiations last year we're actually about to go into the next phase of those. It's about a four-month process that starts right here towards the end of August. I think we benefited from those. We reached substantial negotiated increases for our owners hotels in those. I think we benefited from those and you're starting to see that display itself in the rate growth that we've shown in corporate which has been higher than the room and the occupancy growth. So, I think that will continue to be headroom for us. And it's also not just the actual negotiations. It's the mix. We have the opportunity right now at higher occupancies that strong demand travel. The change of the mix of our customers and choose preferred ones that are willing to pay higher rates and stay for longer stages.

Understood. Thanks.

This concludes our Q&A. I'll now hand back to Elie Maalouf, CEO for closing remarks.

Well, thank you, everyone. It's been great to connect with you today. I look forward to seeing many of you in person over the next few days here in London. We're pleased with the first half we've had. Our teams have done an excellent job to position us for success ahead and we look forward to the important next chapter of growth. Our next market communication will be our third quarter trading on 20 October. Thanks for your time and interest in IHG and I look forward to catching up with you soon.