Hello, and welcome to IHG's 2024 half-year results presentation. I'm Stuart Ford, Senior Vice President and Head of Investor Relations at IHG Hotels & Resorts, and after a short video reel, I will pass over to Elie Maalouf, our Chief Executive Officer. Before we proceed, I'm obliged to remind the audience that the company may make certain forward-looking statements as defined under U.S. law. Please refer to the accompanying half-year results 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. The results release, together with the usual supplementary data pack, as well as the presentation slides accompanying the results, can all be downloaded from the Results & Presentations section under the Investors tab on ihgplc.com.
Hello, and welcome to IHG's 2024 half-year results presentation. I'm Elie Maalouf, Chief Executive Officer of IHG Hotels & Resorts. I will kick things off in a moment by sharing highlights from the first half, a period of strong financial performance and excellent development activity. Michael Glover, our Chief Financial Officer, will then provide a financial review, after which I will share areas of progress we are making on our strategic priorities. We then have Heather Balsley, our Chief Commercial and Marketing Officer, who will provide an update on the great work we are doing in critical areas, such as IHG Hotels & Resorts master brand, our IHG One Rewards Loyalty program, and ancillary revenues. We saw strong progress in the first half of 2024, with key metrics for our trading performance, signings, profit, and earnings all ahead year-over-year.
RevPAR accelerated in Q2 to 3.2%, reflecting a strong rebound in the U.S. and the breadth of our global footprint, leading to H1 up 3%. Looking at system size, our gross growth was 4.9%, and net growth was 3.2%. We added 126 hotels to our system, taking our total estate to 955,000 rooms across more than 6,400 hotels. We delivered record-breaking signings of over 57,000 rooms, up 67% on last year, driven by strong momentum across our brand portfolio and the Novum Hospitality agreement signed in April. We continue to successfully capture conversion opportunities, which represented over half of all signings. Our fee margin continued to expand, growing 180 basis points, and helped drive operating profit to over $500 million, up 12%.
EPS also grew 12%. We are pleased to declare an interim dividend of $0.532, consistent with our 10% growth rate in each of the last two years. Dividend payments, along with the $800 million share buyback program, are expected to return over $1 billion to shareholders in 2024, representing over 7% of our market cap at the start of the year. Now, let me hand over to Michael, who will take you through the details of our financial results for the half.
Thanks, Elie. I'm Michael Glover, Chief Financial Officer for IHG Hotels & Resorts. Let me take you through some more detail on the strong financial performance that we have delivered in the first half of 2024. For our reportable segments, which is the fee business, together with the owned and leased portfolio of 17 hotels, revenue was $1.1 billion, and EBIT was $535 million, representing growth of 7% and 12%, respectively. Within this, fee business revenue increased by 6% to $850 million, while fee business operating profit increased by 10% to $517 million. On an underlying basis, which adjusts for a $4 million LD receipt and to measure growth at constant currency, fee revenues were up 7% and profit was up 11%.
Fee margin increased by 180 basis points to 60.6%, and I'll touch on this in more detail shortly. Adjusted interest increased to $79 million as expected, which reflects the higher level of net debt and a higher interest rate on the bond that was refinanced towards the end of 2023, and also the larger System Fund cash position and the increased charge on this balance, which is linked to higher base rates. The effective tax rate was 27%, which is also in line with the guidance we gave. But the rate in the first half of 2023 was lower at 25%, as that benefited from a non-recurring deferred tax credit related to a tax law change in the Middle East. The rate for the whole of 2023 was 28%.
At the end of the presentation, I'll remind you of our full-year outlook for interest and tax to help with modeling. But the key point is these have not changed from six months ago. Earnings per share includes the benefit of accretion from the $800 million share buyback program we are partway through in 2024, as well as the annualization of the previous $750 million buyback completed in 2023. The combination of these reduced the average share count by 5.6%. With our strong growth and profit, coupled with the interest, tax rate, and share count movements, earnings per share increased by 12% to $2.039.
For the full year of 2024, the interest cost percentage increase will be less pronounced than it was for the first half, and the tax rate is expected to be around 1 percentage point lower, rather than the 2 percentage points higher, which was the case in the first half. Therefore, earnings per share growth for the full year is expected to be higher than the EBIT growth and in line with consensus expectations. Moving on to a summary view of RevPAR performance by region. The Americas improved strongly in Q2, with RevPAR growth of 3.3%. While this included a benefit in April from the shift in the timing of Easter, which had impacted the end of Q1, all 3 months of the second quarter were positive and saw more normalized levels of demand, which was encouraging.
US RevPAR in Q2 was up 2.5%, while across Canada, Latin America, and the Caribbean, it was up 9.4%. In the EMEAA region, we delivered another strong quarter of RevPAR with growth of 6.3% in Q2, after 8.9% in Q1. For the first half overall, the UK was up 2.5%, Continental Europe, 4.8%, and the Middle East saw 9% growth. Markets in Asia Pacific were particularly strong and up double digits, partly driven by the benefits of outbound tourism from China. Turning then to Greater China, the 2.5% growth in RevPAR in Q1 eased to a reduction of 7% in Q2. You will recall that the comps got significantly tougher in Q2 last year.
The region was close to flat versus 2019 levels in Q2 2023, having been down 9% in Q1 last year. As you know, the industry has experienced shifting patterns of demand mix, including an expansion of outbound leisure travel to other markets, particularly elsewhere in Asia Pacific, as seen benefiting demand in our EMEAA region. Yet, given how successfully we are expanding supply in the region, we achieved total room nights sold and total hotel rooms revenue in Q2 that were both still up by over 5%, and for half one, that were up around 10%. With that said, and even though comps get tougher in Q3, as this time last year there was incredibly strong domestic demand, we are clear in our view that the short-term trading bumps are not some kind of new norm.
We are very confident in the highly attractive medium- and long-term growth outlook, which is also reflected in our very strong openings and signings performance in H1, which I will come to in a moment. As we set out before, China is expected to grow at a premium rate of GDP expansion compared to many other economies. The number of middle-income households is expected to double over the next decade. Their spend on travel and tourism will grow at an even faster rate and more hotel new supply will, of course, be needed to meet this demand and close the under-penetration of rooms per capita. So taking the three regions together, our global RevPAR improved to growth of 3.2% in Q2, and growth of 3% for the first half.
Here, we are showing you our rooms' revenue performance split by the different demand drivers of business, leisure, and groups, and this is split into the room nights and rate progress. Groups has been strongest, globally up 7% year-on-year in the first half, which, as expected, is a lag effect of this area of demand fully in recovery and getting good rate traction post-COVID. For leisure, it is pleasing to see this continuing to grow in all three regions, and it was up 4% globally, and business revenue was up 1% year-on-year. So globally, all three demand areas showed positive rooms revenue growth. Turning to system growth, gross openings produced 4.9% growth year-on-year, as we added 18,000 rooms in the first half of 2024.
This was broadly similar to the same period last year if you exclude Iberostar and the first Novum hotels that we've added to the system in June of this year. 9,000 rooms exited the system in the half, equivalent to 1.7% removal rate over the last 12 months, which is broadly in line with the historic underlying average. Taken together, net system growth is therefore 3.2% year-over-year and is 0.9% year-to-date. There's a lot to do in the second half of the year, but we remain confident of achieving consensus, which is around 4% for the year as a whole. This would include the Novum rooms, which we have said in today's statement we expect to contribute approximately 0.8 of the system growth expected for 2024.
We signed a record-breaking 57,000 rooms in the half, a huge increase of 67% on 2023 in total, and still up 15% if you back out Iberostar and the Novum signings. In Q2, the growth rate was even higher. Clearly, that's the quarter with the Novum agreement in it, but excluding that, the signings were still up a very impressive 23% on last year. What's also very pleasing to see is that new build signings are up 23%, which reflects developer confidence improving, as well as the strength of our brands and enterprise. Moving on now to give some further brief highlights for each of the three regions. I've already covered RevPAR, so let me touch on profit as well as openings and signings for each region, starting with the Americas.
Operating profit for the Americas was $413 million, up 5%, which very closely matched the growth in revenue. Fee margin was up slightly to 82%, and as we've said before, there's still further for the Americas fee margin to go. Turning to growth, system growth, this was 2.5% year-on-year, and openings in the half were up some 65% on last year. There were over 10,000 rooms signed in the half, which was down on the first half of last year, but we see this as timing, and therefore, expect a good pickup in signings in the second half. It's worth noting the traction we are getting with the Garner brand, which, as Elie will touch on, added a further 15 signings.
The Americas pipeline is up 3.5% compared to this time last year, which represents future growth of 21% of the current system size in the region. In our EMEAA region, operating profit jumped 34% to $119 million, outstripping the 12% growth in revenue. IMFs, increasing by $12 million to $55 million, is clearly a driver of this. It is also worth noting that the owned and leased portfolio was loss-making in the first half of last year, is now back to break even. For the fee business, the margin is up over 700 basis points. This increase is a sustainable move up and clearly has further to go, but it was already moving up strongly in the second half of last year, so the increase won't be quite as pronounced for the year as a whole.
Gross system growth was 5.5% year-on-year, with the opening of 4,400 rooms in the region in the first half. While this is fewer than the first half of last year, there should be no particular concern over that. In the first half of 2023, there were nearly 4,000 openings, which came from Iberostar, and there were also a small number of very large hotel conversions in the first half of last year, which added a lot of rooms. We are confident in the full year outlook for EMEAA openings. When it comes to signings, at nearly 32,000 rooms, these were more than triple what we signed in the first half of last year.
There were 17,500 rooms that came with the Novum agreement within this, but excluding these, there was still signing growth of a very strong 40%. Aside from the excellent growth that we achieved in the priority market of Germany, there were nine signings in India, eight in Japan, and seven in Saudi Arabia. The pipeline for the region has also jumped nearly 40% year-on-year, and now at over 100,000 rooms, represents 43% growth on the current system size for the region. Moving on to Greater China, where the operating profit was held flat at $43 million, with the $3 million increase in revenue offset by a similar increase in costs. As a result, fee margins slipped back to just under 56% from 58% this time last year.
We remain very clear on the medium to long-term potential to continue to grow margins in China, particularly from the positive operating leverage as we capture both demand and supply growth. Reflecting that future potential, gross growth accelerated back into double digits at 10.9% year-on-year, and after removals, net system size growth was 8.6%. With 6,700 rooms opened in the first half, this was up nearly 50% on last year, and signings of 15,000 rooms with growth of nearly 40%. Our progress is both strong and broad. 51 signings for the Holiday Inn brand family, 12 for Crowne Plaza, while the signings across Luxury and Lifestyle see these brands representing 20% of both system size and pipeline in the region.
The total pipeline for the region is up 9% year-on-year and is equivalent to 61% growth on the current system size. Just bringing together then the picture on fee margin. This is up 180 basis points year-on-year. Positive operating leverage from the trading performance has in total driven 130 basis points of this. It comes with clear progress on cost control. Our fee business revenue is up by over 6%, while our fee business cost base is up by just 1%. The ancillary fee streams benefit comes from the System Fund changes we announced back in May. We said that these were expected to deliver around $25 million of incremental revenue and operating profit to our reportable segments.
We are on track with that, with the first half EBIT performance, including around half of that $25 million, and therefore, it has contributed around 50 basis points to the margin uplift. These ancillary fee streams come through the Central segment, which is why they are non-regional. That's the same approach with our share of co-brand credit card fees, which also comes through Central, rather than being a part of the regional performances. The total IHG fee margin is the aggregate of these three regions as well as Central. As usual, the appendix has further detailed tables on the components of our revenue, our overheads, and our operating profit. Moving on now to cash flow. You will recall that in 2023, we had a record free cash flow of $819 million for the year, which was a conversion rate of 129%.
The first half free cash flow last year was $277 million, and this year it is $132 million. Let me take you through the key changes, which are quite specific to this year, and they don't change the highly cash generative nature of our business model and our track record of this. The key driver is related to the spending down of the System Fund cumulative surplus and how that also impacts working capital balances. We came into the start of 2024 with a clear position of funding strength in the System Fund. It had a cumulative surplus of approaching $100 million. As you know, the System Fund is run to a break-even position over the long term, and this year, like others in the past, will see us spend down the prior surplus.
There is normally a working capital outflow in the first half of the year, and this has been increased this time with around $100 million of incremental movements on the System Fund-related balances. Excluding those, cash conversion would have been around 70%. Conversion is typically lower in the first half. In 2023, for example, even though the year as a whole saw record cash generation, cash conversion was 88% in the first half. For the 2024 year as a whole, cash conversion will likely be under our typical conversion of around 100%. That's because there will still be the impact for the full year of spending down the prior surplus of the System Fund. And additionally, key money outflows will be higher this year, which I will come on to in just a moment.
The key point here is that 2024 is a rebalancing year for the System Fund, and we expect to resume in the future to our typical level of around 100% cash conversion on average. As for other movements within free cash flow, these are all as expected. Interest and tax at $169 million was $31 million more outflow than last year. Our dividend per share is growing, but the incremental cash outflow from that is offset by buying back shares. The outflow of $172 million for dividend payments and $367 million for the progress on this year's buyback is driving the increase in net debt, in full alignment with our capital allocation strategy and our target leverage range.
Turning then to further analyze capital expenditure for you, we spent gross CapEx of $151 million, and net CapEx was $103 million. Key money of $86 million, which was up from $64 million in 2023, is indicative of our increased development activity back to pre-COVID levels, and as we've said before, is a mark of our growth in the Luxury and Lifestyle segment. Importantly, it is also a reflection of investing in the business being our number one capital allocation priority, and our discipline in only deploying funds where the returns justify the investment. Maintenance CapEx was $15 million, in line with the prior spend, as we continue to ensure that our business and enterprise platform is fully invested.
As we guided to previously, key money and maintenance CapEx annually would be around $150 million-$200 million, but this year it will be around the top end of that range or potentially a bit higher, which will depend on the timing of various Luxury and Lifestyle hotels getting opened and where we get to on the phases of the Novum hotels being added. Moving to remind you then, that our strategy for uses of cash remains unchanged. After investing behind long-term growth, which is the foremost priority, we look to sustainably grow the ordinary dividend. In this regard, we are pleased to announce the interim dividend will increase to $0.532, representing 10% growth on last year. That rate of growth has been consistent for each of our dividend payments over the last couple of years.
This year's $800 million buyback program is 47% complete, which has repurchased a further 3.7 million shares, or 2.2% of the share count. That is the driver of leverage increasing to 2.4 times, and we still expect to be around the bottom of our 2.5-3 times leverage range at the end of the year, given the growth in EBITDA and the cash generation that is expected in the second half of the year. The dividend payments to shareholders in 2024, together with the buyback program, will have returned close to $1.1 billion, which is equivalent to 7.1% of IHG's market capitalization at the start of 2024. Concluding then, with a wrap-up of points for those who maintain forecast models of IHG's performance.
Interest costs will rise from 2023's $131 million to between $160 million and $170 million, which is a slight narrowing of the prior range I gave six months ago. Also, the same as guided six months ago, our adjusted effective tax rate is expected to be around 27%, compared with the 28% rate in 2023. This is also a rate that could be applied in years beyond, based on current geographic mix of profits and current tax legislation. We still advise that our normal course gross CapEx spend could total up to $350 million, and our normal course net capital expenditure is likely to be between $150 million and $200 million.
This year will likely be higher than average around the top end of that range, or potentially above, as I already mentioned, given the timing of Luxury and Lifestyle openings and the Novum outflows. As a reminder of our growth ambitions over the medium to long term are also outlined here for you. And to echo Ellie's words, we're very pleased with the progress being made on this growth algorithm that we set out at the time of our capital markets event back in February. With that, let me now hand back to Ellie.
Thank you, Michael. I will now share an update on some of the key areas of progress we are making on our evolved strategic priorities. But before I do, allow me to provide a brief reminder of two key takeaways from our update on strategic priorities on 20 February. For anyone new to following IHG, I would encourage you to view the recording of the event, which can be found on the Investors section of our website. First, a recap on our medium to long-term growth algorithm. On average, we expect to deliver high single-digit fee revenue growth through a combination of compounding RevPAR growth and net system size growth. We have a proven history of driving strong margin accretion.
The revenue growth and cost base efficiency, we expect our operational leverage to drive fee margin expansion of between 100 and 150 basis points per year, leading to EBIT growth of approximately 10%. We expect to maintain our strong cash generation, which will support our three capital allocation priorities. This strong revenue growth, margin expansion, and resulting EBIT growth, plus our expectation for regular share buyback programs, is expected to deliver compound growth and adjusted EPS annually on average over the medium to long term of 12%-15%. Second, is how we deliver that growth algorithm, which is all underpinned by our clear purpose, ambition, and strategic pillars that we evolve to further strengthen our ability to drive the growth levels we anticipate. I will use the four pillars to cover my update.
So let's turn to the progress we're making on each of those four strategic pillars. First, our Relentless Focus on Growth, which brings a targeted approach to expanding our brands in high-value and high-growth markets. We are very intentional about our focus on growth and its importance. We are extremely pleased with the record-breaking signings of more than 57,000 rooms across 384 hotels in the first half. This is up 67% and includes the agreement with Novum Hospitality in April, which doubles IHG's hotel presence in Germany. More on this in just a moment. The strong momentum we're seeing in signings has been made possible by the strengthening and diversification of our industry-leading brand portfolio and the power of our commercial engine for owners, which both Heather and I will discuss more later.
We have also continued to invest in and refresh our existing brands through the development of new formats and updated designs and service standards. Our established brands continue to drive strong signings today, with over 40,000 rooms representing 72% of signings in H1. Meanwhile, our 9 newer brands are accelerating our growth. They collectively represent 7% of the system today, but 19% of the pipeline. These new brands accounted for 28% of signings in the first half, and their pipeline is set to almost double their current system size, which is clear evidence of their strong growth trajectory. Now, let's touch on the progress we're making with our newest brand, Garner. We launched this best-in-class, midscale conversion brand in the second half of last year. The brand has considerable opportunity to build substantial scale.
We project Garner to reach an estate of over 500 hotels over the next 10 years and more than 1,000 hotels over the next 20. Garner became franchise-ready in the U.S. in September. We have since signed over 80 Garner properties across key markets, including the United States, Germany, United Kingdom, Japan, Austria, and Turkey. We are pleased with the progress Garner has made since launch and look forward to much more. In April, we announced the signing of an agreement with Novum Hospitality to convert 119 hotels to IHG brands. This doubles IHG's hotel presence in Germany, one of Europe's largest hotel markets, with strong domestic consumption, inbound travel, and is also one of the largest sources of international outbound travelers globally.
The agreement launches a collaboration between Holiday Inn and Novum's Garner, a new brand, and introduces our Garner and Candlewood Suites brands to Europe, demonstrating our success in globalizing our existing brand portfolio. The agreement also includes an exclusivity arrangement for future Novum Hospitality hotels to join IHG's leading brands, and the first signing, in addition to the initial 119, was already achieved in the second quarter. Conversions continue to rise in importance globally and present an increasing share of system growth. Both the progress we are making with Garner and the agreement with Novum Hospitality that I just spoke about are testament to this. Conversion signings increased from 17% of hotels signed in 2017 to 36% in 2023. In the first half of 2024, conversions represented over half of all signings.
We have developed the brand's enterprise platform and excellent capabilities needed to successfully attract conversion opportunities and have them open in short timeframes, generating more revenue for owners and fee income for IHG more rapidly. While we have launched conversion-focused brands such as voco, Vignette Collection, and Garner, which represent over a quarter of conversion signings in recent years, we continue to sign conversion deals across most of our portfolio if the brand fit is right and the owner is prepared to invest the capital required. We're also very pleased with the continued positive trajectory we have seen in new-build signings, as shown in the chart on the left.
While new-build signings are not yet at pre-pandemic levels, owner confidence has clearly been improving, with 8% more new-build hotels signed in the first half year-over-year, which is even more impressive at 23% more when looking on a number of rooms basis. This continued progress follows the increase in new-build signings in 2023 compared to 2020 lows. Moving on to our next strategic pillar, Brands Guests and Owners Love, which defines our explicit intention to deliver for both groups every time. This precision and simplicity places the success and perception of our brands at the forefront of what we do. We're constantly evolving our brands to make sure they remain relevant in the market, drive high guest satisfaction, and generate superior owner returns. That continued investment in our established brands is critical in having Brands Guests and Owners Love.
The Holiday Inn brand was awarded the most trusted travel and hospitality brand in the United States this year. We've signed 200 Holiday Inn properties over the past 30 months and opened close to 90. We now have more Holiday Inn hotels and rooms than at the end of the 2021 Holiday Inn review. This strength in estate is driving improvements in guest satisfaction, loyalty participation, and enterprise contribution. We recently unveiled a refreshed and modernized prototype in the Americas, introduced a sophisticated and bold new visual identity, and optimized service standards leading to improved guest satisfaction and lower hotel labor cost. The Holiday Inn brand never stands still. Our owners continue to invest in the brand, too. 72% of the Holiday Inn estate in the Americas will be new or recently refurbished, with 80 renovations actively in progress.
Today, the Holiday Inn brand is over 1,200 hotels in over 80 countries and territories, with another 300+ hotels in the pipeline, representing a further 27% rooms growth. If we expand that to look at the Holiday Inn brand family, including our category-leading Holiday Inn Express brand, the world's largest hotel chain, we have more than 500,000 rooms across 4,400 hotels globally and close to 140,000 rooms in the pipeline. We look forward to the next 70 years of this iconic brand. Now, moving on to highlight some of the other recent investments we have made in our brands. Latest prototypes for each of our three extended stay or Suites brands have added additional options and flexibility for both new builds and conversions to drive additional owner returns and system growth.
Following increased interest for dual-branded avid and Candlewood Suites product, which combines our short stay and extended stay midscale brands, we have developed a dual-branded prototype with standardized, guest-friendly, and ROI-focused common spaces. We signed 22 of these over the past 18 months and opened the first 2 in the second quarter of this year. For Crowne Plaza, we have developed scalable design solutions to accommodate smaller footprints and reduced amenities, such as F&B and meeting space. This lowers the build cost and creates flexibility for diverse property sizes and cost structures, creating increased opportunities for market expansion. We remain extremely focused on driving efficiencies and lowering costs for our owners across the life cycle of hotel, including cost to build and renovate, cost to open, and cost to operate.
Moving on to our next strategic pillar, L eading Commercial Engine, which emphasizes the importance of investing in the technology and tools that deliver commercial success and make the biggest difference to guests, owners, and our hotel teams. It is focused on driving high value, low-cost revenue to our hotels through superior data and insights that lead to strong owner ROI. We have made significant investments over recent years to innovate our technology and distribution channels. We kicked things off with the development of an industry-leading guest reservation system, and then developed a best-in-class revenue management capability, which includes the active rollout of a new market-leading, cloud-based revenue management system. More on this in a moment. This year, we've also begun work on our next generation property management system to create greater value for owners. More on this to come in the future.
Our industry-leading guest reservation system has allowed us to monetize the unique attributes of each hotel's room inventory. We have deployed room attribute upsell in over 6,000 hotels. This offers guests more choice during the booking process, such as bigger rooms, better views, and higher floors, while generating maximum value for owners. The value per upsell night is averaging roughly $40 across our Luxury and Lifestyle segment and around $20 across Essentials and Suites. We continue to build on the success of room attribute upsell, as well as stay enhancements, to increase direct channel contribution, generate more revenue for our hotel owners, and increase fee income for IHG. We are extremely focused on driving high-quality revenue through best-in-class platforms to maximize hotel owner returns.
As part of this, our new revenue management system is a cloud-based innovation that brings together leading capabilities that reinvent the way hotels manage booking channel and pricing decisions. The rollout of the new system reached 1,700 hotels by the end of June, covering all regions, sub-regions, and brands. We are targeting to have the new system in 4,000 hotels in 2024. This highly sophisticated platform uses best-in-class data science, forecasting tools, and artificial intelligence to deliver advanced insights and recommendations to hotels. Initial results from pilots indicate encouraging uplifts in revenue performance. In May, we announced changes we have made to our System Fund arrangements. Let me remind you of those and the scale advantages of the System Fund.
In terms of revenue sources, by far the biggest source is hotel owners, who are the main and traditional contributors, and all that revenue, 100% of it, stays in the System Fund. These contributions are deployed for marketing, for reservation services, for running the loyalty program, and all other areas of brand and owner support. This all stays in the System Fund. A secondary source of revenue is from consumers who engage with the IHG Hotels & Resorts master brand, our hotel brands, our IHG One Rewards loyalty program by buying points. These are IHG assets, and we had long ago chosen to place that revenue in the System Fund when it was much smaller.
Today, the System Fund is much larger than it was then, and it has grown nearly 30% over just the last five years alone and continues to grow with RevPAR and system size growth. We have decided to now keep more of that direct from consumer revenue in our P&L. This is a natural evolution of the scale and efficiency of the System Fund and the choices we now have. This change is consistent with the strategic priorities we shared in February, which drive value for owners through our Leading Commercial Engine and grow ancillary fee revenue and drive margin improvements for IHG as part of our growth algorithm.
The ability to make these changes, which include a lowering of the loyalty assessment owners pay into the System Fund and an increase in the reimbursements they receive back out of the fund, are born out of the strength of the funding position due to our growth. Concluding with our fourth strategic pillar, C are for Our People, Communities and Planet, which underpins our 2030 Journey to Tomorrow plan. This plan is focused on five critical areas: our people, communities, carbon and energy, waste, and water. We're making positive progress across all five areas. We recently introduced our Low Carbon Pioneers program, a first-of-its-kind initiative in our industry for hotels leading the way in sustainability. The program brings together a community of energy-efficient hotels that have no fossil fuels combusted on site and are backed by renewable energy.
The initiative is focused on testing, learning, and sharing sustainable solutions to inspire other hotels to join the program and encourage wider adoption of carbon reduction practices. The program will also aid guests and corporate clients seeking more sustainable stays. While for owners, the energy efficient lower operational carbon hotels can also provide benefits such as greater alignment with environmental regulatory changes and better access to green finance for new projects. We also recently announced a new global partnership with Action Against Hunger. The partnership is part of our pledge to improve the lives of 30 million people around the world by 2030, through skills training, disaster response, and helping tackle food poverty. IHG will support Action Against Hunger's life-saving community outreach program and will use our global scale to help grow awareness.
The initiative complements existing partnerships IHG and our hotels already have in many local markets to strengthen the food system in communities, from providing training and tools to reduce food waste, to diverting surplus food to those in need. That concludes the progress update on our four strategic pillars, which together with our purpose and ambition, underpin the strength of our business model and how we look to compound growth and create sustainable shareholder value. I will now hand you over to Heather Balsley, our Chief Commercial and Marketing Officer. Heather has been with IHG for 17 years. Prior to her current role, she was the Senior Vice President of Global Loyalty and Partnerships, responsible for our award-winning IHG One Rewards program and our co-brand credit card business, including relaunches to both of these in 2022.
Prior to that, she held a number of brand leadership and corporate strategy roles, developing and delivering brand strategies that enhance the guest experience and drive performance across all of IHG's markets globally. Heather, over to you.
Thank you, Elie. Our commercial and marketing organization is laser-focused on maximizing revenue delivery and returns for hotels in our system, all while delivering exceptional customer experiences. This owner ROI mindset also helps drive further signings and system growth while ensuring our owners and operators are committed to delivering for our guests every day. In recent years, we've expanded our brand portfolio and significantly strengthened our enterprise, including a refreshed master brand, the launch of IHG One Rewards, and our advanced technology and commercial engine. The focus of the commercial and marketing organization is broadly categorized into three areas. First, we are responsible for developing and strengthening IHG's master brand, IHG Hotels & Resorts, and each of our hotel brands. We drive growth via leading reputation, compelling guest experiences, and strong owner returns.
Second, we're responsible for our award-winning loyalty program, IHG One Rewards, driving growth in members, encouraging their engagement and stickiness, and ensuring that these high-value, low cost of acquisition guests are helping maximize revenue and returns for our owners, and also driving ancillary fee streams. Third, commercial and marketing also orchestrates IHG's commercial engine to drive the over $30 billion of total gross revenue to our hotels across the system, including a wide array of areas like marketing, data insights and analytics, customer relationship management, our distribution channels, and revenue management. Today, I will talk you through the critical components that power our commercial engine. These interdependent elements include the IHG Hotels & Resorts master brand, our brand portfolio, and IHG One Rewards. The strength of our brands and IHG One Rewards powers our ancillary fee streams that deliver material incremental capacity for marketing investment and IHG P&L margin.
This fee stream, which is primarily from co-brand credit cards and the sale of points to consumers, is possible because of the scale of our IHG One Rewards member base of more than 130 million members and their deep engagement in our program. The final piece is that our commercial engine for hotels is ultimately enabled by our enterprise contribution, the percentage of room revenue that's booked through IHG-managed channels and sources. These interdependent components work together to drive superior revenue performance at the lowest possible cost to hotels, and therefore, supports future system growth. Now, let's step through each of these elements, starting with our investment to build IHG's master brand. Our ambition is to make IHG Hotels & Resorts a beloved household name.
We refreshed the master brand in 2021 and have continued to strengthen its reputation with customers, its bond with our hotel brands, and to tighten the connection to our IHG One Rewards loyalty program. Building a powerful master brand with strong awareness and reputation is a core part of our strategy because the master brand is what ties together our hotel brands. A powerful master brand positively influences commercial delivery to our hotels. It inspires owner interest to invest in our brands, which ultimately drives system growth, and it facilitates talent acquisition and employee retention. We've invested to raise the profile of our master brand by executing on a fully integrated investment in media, partnerships, and public relations. Our Master Brand Everywhere strategy is delivering global and targeted marketing across all guest touchpoints, and we will continue to amplify our focus and investment behind this strategy going forward.
We're really proud to see IHG Hotels & Resorts everywhere, including on television, social media, airports, music festivals, sporting events, and more. This strategy goes beyond the marketing to include a deliberate approach to how we connect our hotel brands with our master brand across every customer touchpoint and how we amplify this connection by leveraging the billboard effect of our over 6,400 hotels globally. We know that this is resonating really well with guests. The investments we've made into our master brand are driving strong improvement in brand power, engagement, and reputation. IHG Hotels & Resorts was ranked first in our industry's global share of voice in the first half of 2024. We've also grown our social media engagement by an impressive 65% in the first six months of this year.
This is also supporting an uplift in our average global social review score to 4.37, which is ahead of our global peers. This last point is essential because a compelling master brand is both the awareness of our brand and our reputation with customers. Industry-leading social review scores means that our commitment to elevating our customer experiences on property are successfully elevating our master brand reputation. We are really pleased with the journey the IHG Hotels & Resorts master brand has been on over the last 3 years. The investments we've made behind the master brand ultimately help deliver more revenue to our hotels for our owners and more brand affinity among our guests and loyalty members, and there is a lot of further potential ahead. Now, let's shift to discuss our portfolio of 19 hotel brands.
We've added 9 brands to our portfolio since 2015, from midscale all the way through to upper luxury. As I mentioned earlier, it's our master brand that connects the individual hotel brands within our strengthened and diversified brand portfolio across our 5 brand categories of Luxury and Lifestyle, P remium, Essentials, Suites, and Exclusive Partners. The power of our commercial engine requires that we have strong and compelling brands within each of these segments because we know that the vast majority of customers stay within just one or two price segments. But we also know that there is an important and really valuable segment of guests who stay across price tiers, and for whom a compelling loyalty program, together with great hotel brand options across all price segments, is essential to inspire their stickiness to IHG.
This is why we've invested to add fantastic new brands to our portfolio while staying focused on innovation and the ground game delivery on property to keep our established brands fresh and relevant in every market. The IHG master brand connects these brands to one another for all guests, while the IHG One Rewards program ultimately builds that deep stickiness to motivate customers to choose our brands by offering incremental value, benefits, and experiences when they stay with an IHG brand. This stronger and broader brand portfolio also encourages hotel owners to join and to stay within the IHG ecosystem by providing increased investment opportunities within and across brand segments and enhanced returns on their investment. And so now let's move to loyalty and the importance of IHG One Rewards and why we continue to be really focused on loyalty.
We know IHG One Rewards is a critical part of why guests choose to stay at our hotels and return more frequently, and so this program is key to driving performance and growth. Our loyalty members are our most valuable guests. They're 10 times more likely to book direct using channels such as our mobile app and IHG.com. They spend 20% more than non-members, and they return to our hotels more frequently. Plus, they engage with ancillary revenue streams by purchasing points and being holders of our co-brand credit cards. Let's take a minute to reinforce this profitability point and compare an IHG One Rewards member to the typical OTA guest staying at an IHG hotel. This is going to be an example to illustrate how loyalty members drive higher spend at a lower cost, resulting in more profit for our hotel owners.
An IHG One Rewards member, on average, spends 10% more, given their booking choices, than a guest booking through an OTA. The cost of the loyalty member booking for a hotel, including loyalty assessments and marketing program fees, is about 50% lower than that of an OTA guest. This therefore means that the loyalty member is roughly 20% more profitable to a hotel owner than a typical OTA guest staying at that hotel. Because we know who our loyalty members are and how they behave, they're also much lower cost to market to, and we use our advanced data and analytics capabilities to target these guests directly with the right offer at the right time to motivate that next booking at a very strong marketing ROI. This is why the continued growth of our member base is an essential priority.
As you know, we reimagined our loyalty program in 2022 with the launch of IHG One Rewards, our biggest-ever transformation and investment in the loyalty program. This evolution included the introduction of new membership tiers with faster earn of more valuable points and more bonus points across tiers. This point-earning structure is now industry-leading. We also introduced exceptional choice for our members, with unique options to personalize benefits that puts the member in control. And we added richer benefits with new customer-preferred options like room upgrades, food and beverage credits, reward night discounts, and club lounge access that members really value. The new loyalty program was accompanied by the launch of our new and very popular mobile app, our fastest-growing distribution channel. This channel is also really important for our highest value members and drives deep engagement and more personalized options.
Launching an industry-leading mobile app at the same time that we've relaunched IHG One Rewards has really helped grow our member base and increase member engagement with our program and with IHG Hotels. At the same time, we also launched our largest marketing campaign in more than a decade to showcase our brands, IHG One Rewards, and the many ways we deliver true hospitality for good across our hotels around the world. The Guest How You Guest campaign has showed up across TV, social media, magazines, airports, subways, sporting events, and more. Lastly, we launched new co-brand credit card products in the U.S., which have been a catalyst for a strong improvement in new card accounts and total credit card spend. I'll talk about that in a moment.
The transformation in 2022 gave members more tailored experiences and more options to earn and redeem points across our brands. For our owners, the program has meant higher volumes of more engaged and profitable guests to their hotels. We've seen leading indicators of growing member stickiness. Our members are happier, they're more engaged, and they're returning more frequently. These investments and the innovative approach have successfully developed a powerful and engaging program that has rapidly grown to over 130 million loyalty members. Since the launch of IHG One Rewards, we've accelerated enrollments of members into this program. We had record enrollment pace in the first half of this year, and that pace is 50% higher than the pre-pandemic peak and a further 10% improvement from last year's record enrollment levels.
Member penetration, the number of room nights booked by members, continues to grow and now exceeds 60% of room nights globally. This is roughly 10 points higher than prior to the IHG One Rewards launch 2 years ago. The Americas region continues to lead in member penetration, approaching 70%, and we're seeing strong improvements across all three of our regions. The benefits of a large and powerful loyalty program that continues to strengthen each year go beyond a satisfied guest and owner. Member scale is also a critical enabler of success that helps drive commercial performance and therefore future system growth. It also attracts partners that want to collaborate with the IHG Hotels & Resorts master brand and our individual hotel brands. Importantly, it drives ancillary revenue opportunities, which creates further capacity for growth investment.
There is a key synergy between IHG One Rewards, the purchase of points, and co-brand credit cards. I explained earlier how our IHG One Rewards members are our most valuable guests. Within that growing pool of 130 million-plus members, our credit card holders are among our most valuable and engaged of all loyalty members. US cardholders stay 85% more than non-card-holding loyalty members. They deliver 55% more room nights, and they spend 35% more. IHG One Rewards members that are co-brand credit card holders are therefore extremely valuable to us and to our hotel owners. The investments that we've made in both our loyalty program and the US co-brand credit card products have strengthened these important revenue-generating engines and fee streams. Our relaunched US credit cards continue to prove highly attractive to customers.
Since launching the new U.S. co-brand credit card products in March 2022, we've seen really strong performance. This momentum has continued during the first half of 2024, with new credit card accounts activations up 60% versus 2022, and total credit card spend up 30%. As a result of this momentum, we now have 25% more co-brand credit card customers versus two years ago. We believe there is material upside to the revenue from co-brand credit cards through ongoing innovation of our credit card products, data-driven marketing, portfolio optimization, as well as the potential for global expansion outside of the U.S. The potential for growth should see co-brand credit card revenue increase significantly over time, and we look forward to updating you further on this as we deliver on these important ancillary fee streams going forward.
The various components of our commercial engine that I walked you through today, including the IHG Hotels & Resorts master brand, our hotel brand portfolio, IHG One Rewards loyalty program, and ancillary fee streams, all support and influence our strengthened enterprise contribution. Our enterprise contribution continues to grow and reflect how we add value by supplying higher-value guests at a lower cost of customer acquisition to our hotel owners. The percentage of room revenue booked through IHG-managed channels and sources has reached a high of 80% for the first time, up 3 percentage points over the last 2 years. Importantly, digital channel contribution continues to lead this growth, while OTA contribution has remained flat in recent years. Digital contribution includes our IHG mobile app and web channels, which have benefited from the investments we've made in recent years and our strengthened master brand and loyalty program.
Growth and contribution from our mobile app is especially important because this channel is preferred by high-frequency guests, and it also allows us to communicate with our IHG One Rewards members much more frequently, including while they are in stay. This opens up more opportunity to drive repeat stays and offer compelling benefits, services, and experiences when it's most relevant for our guests. To wrap up, we are really proud of everything we've achieved over the last few years in strengthening our brands and commercial engine. IHG's commercial engine drives high-value, low-cost revenue for hotels that complement our brand formats to optimize cost to build and operate, which together maximize hotel owner ROI. The commercial and marketing organization powers IHG's growth as an essential part of this owner value proposition. We drive revenue, optimize customer acquisition costs, and accelerate hotel ramp-up to steady state performance.
Our customers are more connected and engaged than ever before across the master brand, our brand portfolio, and the loyalty program. We've made really good progress on increasing ancillary revenue streams, with notable growth potential ahead. Thank you so much for your attention today. With that, I'll hand it back to Elie.
Thank you, Heather. Let me now summarize our strong performance in the first half of 2024. Our RevPAR grew by 3%, accelerating in Q2. We delivered gross system growth of 4.9% and net system growth of 3.2% and are confident in delivering full-year growth expectations. We secured record-breaking signings of over 57,000 rooms, up 67% year-over-year, and our pipeline grew by 15%. We expanded our fee margin by 180 basis points, supporting operating profit growth and EPS growth of 12%. Our cash generation is funding growth investment, and we expect to return over $1 billion to shareholders in 2024, representing over 7% of our market cap at the start of the year.
We are making excellent progress on our strategic priorities and are confident in the strengths of our enterprise platform and the attractive long-term growth outlook. With that, we thank you for listening to our 2024 half-year results presentation.