The business - which operates brands including Holiday Inn, InterContinental and Crowne Plaza - will distribute a special dividend and share consolidation of $400 million to investors as a demonstration of its success.
Its annual dividend will rise 11% to $0.94 per share.
While annual revenue was down 4.9% year-on-year to $1.72 billion, IHG saw revenue available per room (Revpar) up by 1.8%.
Richard Solomons, IHG chief executive, said: "Our results clearly demonstrate our strong operational performance and the success of IHG’s long-term strategy.
"We continued our focus on enhancing the long-term sustainability of our competitive advantage by evolving our brand portfolio and by driving innovation in our digital and loyalty offer."
Longer term, IHG is putting faith in its upmarket InterContinental brand, which saw eight openings globally in 2016, including five in China.
Other developments include the opening of six Kimpton properties, three EVEN Hotels, and a $200 million upgrade of Crowne Plaza.
Enhancements across the Holiday Inn portfolio in the US and Europe are also on track.
Globally, IHG says it has 76,000 rooms joining the portfolio - representing 500 hotels - the highest since 2008. A further 230,000 rooms are in the pipeline.
Improvements to digital technology and loyalty programmes are also reaping rewards.
A new cloud-based reservation system will roll out in 2017 and digital revenue rose $300 million to $4.3bn. Enrolment in loyalty schemes leapt 16%.
