InterContinental Hotels Group PLC

The stable outlook reflects our view that IHG will achieve a global RevPAR growth rate in the low-single-digit range and maintain solid profit margins over the next two years. This will be supported, in our view, by IHG's strong brands and expanding pipeline of new hotels. We also consider the group's focus on ongoing shareholder returns. We anticipate that IHG will guard against unexpected earnings weakness when making decisions regarding the timing of future investments and shareholder returns to keep adjusted debt to EBITDA lower than 3x and adjusted FFO to debt higher than 20%. We could lower the ratings if the group announced further material investments or shareholder returns funded by borrowings, or if we saw a material and

...InterContinental Hotels Group (IHG) has a high quality geographically diverse portfolio of hotel brands that supports growth. IHG's system comprises around 865,000 rooms with a pipeline of new rooms of more than 289,000, which should support revenue growth amid sluggish revenue per available room (RevPAR). All leading hotel operators are experiencing a slowdown in RevPAR, which for IHG turned negative in the U.S. in the second and third quarters of 2019. S&P Global Ratings expects IHG's systemwide RevPAR to increase by up to 2% in 2019-2020, while system growth, the main contributor to underlying revenue growth, should be at around 5%. Policy of significant partly debt-funded shareholder distributions limits the potential for a higher rating. We expect IHG will continue to make policy choices that keep the S&P Global Ratings-adjusted debt to EBITDA ratio below 3x and funds from operations (FFO) to debt above 20% through 2020. We anticipate the company will continue to invest its cash flows...

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