IHG

InterContinental Hotels Group sits in a category that looks consumer-facing but operates as a fee-based platform business. The company owns almost no hotels. It franchises brand rights, loyalty access, distribution technology, and operating standards to third-party owners who carry the real estate risk, the staffing cost, and the capital expenditure. What flows back to IHG is a royalty stream, a marketing fee, a technology fee, and the indirect margin from channeling 145 million loyalty members into those properties. This is a structurally different business from the one the financial press typically describes when it writes about hotels.

The 2025 results sharpen the picture. Revenue of USD 5.19 billion generated EBIT of USD 1.20 billion, an operating margin of 23.1%. Net income rose 51% year over year to USD 760 million. Free cash flow reached USD 870 million against capital expenditure of just USD 28 million on a USD 5.2 billion revenue base. These are not hotel economics. These are platform economics dressed in hotel branding.

The central analytical observation: IHG does not compete for guests. It competes for owners. A prospective hotel owner choosing between IHG, Marriott, Hilton, and Accor is not evaluating which brand travelers prefer in isolation. That owner is evaluating which platform will deliver the highest RevPAR index against competitors in the same submarket, which loyalty program will fill rooms on weekday nights at a lower acquisition cost than direct booking, and which technology stack will reduce commission leakage to online travel agencies. Once the owner signs a 20-year franchise agreement, the competitive dynamic reverses. The owner becomes dependent on IHG's system. IHG becomes the landlord of a balance sheet it does not own.

The analytical question is whether this platform position survives the structural pressures now converging on branded lodging: the persistent disintermediation threat from Booking Holdings and Airbnb, the consolidation among the top four global chains that is narrowing differentiation, and the slow erosion of loyalty program economics as members accumulate status across multiple programs. IHG's answer, visible in the 2025 numbers, is that scale in owner economics is self-reinforcing. The question is whether that answer remains sufficient through the next cycle.