Holiday Inn owner IHG posted slightly better-than-expected annual room revenue on Tuesday and said it expected to return more than $1 billion to shareholders in 2024 as the hotel chain operator enjoyed strong travel demand.

Chief Executive Elie Maalouf also laid out his strategy, saying the company is targeting high single-digit growth in fee revenue by increasing revenue per room and the number of hotels annually on average over the medium to long term.

"The travel industry has attractive, long-term drivers of demand, and the strength of our brand portfolio and enterprise platform will continue to boost our RevPAR and system size growth," said Maalouf, who took over the top job last July after leading the group's largest region, the Americas, for about nine years.

Hotel chain owners, including IHG have benefited from a tourism boom over the past year and as travel demand is expected to surpass pre-pandemic levels, other players such as European airlines are entering 2024 with strong outlooks despite economic uncertainties.

 

TUI

, Europe's largest travel operator, reported a stronger-than-expected first quarter earlier this month.

But players in the United States, such as hotel operators Hilton Worldwide and Marriott International and online travel agency Expedia expect demand to grow more

slowly

this year.

Finance chief Michael Glover told journalists on Tuesday that IHG was growing in its key markets, the United States and China, and also in other regions including the Middle East, Southeast Asia, Korea and Japan.

IHG is also looking to build the scale of its luxury and lifestyle properties, but not at the expense of its mid-scale business, Glover said.

IHG reported global revenue per available room, a key performance indicator for the hotel industry, of 16.1% year-on-year, compared with analysts average expectation of 15.7%.

The owner of the Crowne Plaza, Regent and Hualuxe hotel chains launched a new $800 million share buyback programme.

"Overall, this is a solid set of results showing the strong business model and the midterm guidance reiterates that," Bernstein analyst Richard Clarke wrote in a note.

"Only concern is the under performance of lower chain scales particularly in the Americas," Clarke added.

IHG shares were about flat at 0815 GMT. (Reporting by Yadarisa Shabong in Bengaluru; editing by Rashmi Aich)