Gross system size growth was 9.8% year-on-year with the opening of 16, 000 rooms in the region, of which just over half opened in a particularly busy final quarter of the year. Openings over the course of 2023 included 51 for the Holiday Inn Brand Family with Express reaching over 300 properties in the region, and 14 more Crowne Plaza hotels opening for this category-leading brand which now has an estate of 124 hotels in Greater China. We welcomed the first three Vignette Collection hotels in the region, all of which opened within two months of signing, demonstrating the agility of the brand. The addition of another four voco hotels also helped to drive the proportion of conversion openings to 32% for the year. Across Luxury & Lifestyle brands there were 15 openings, including a further flagship for Regent with Shanghai on the Bund, and six openings for InterContinental.
All of these additions combined to help us reach the milestone of 700 open hotels in Greater China, which is a fantastic achievement for our regional team. We signed over 26,000 rooms to the pipeline during the year. This included 20 Luxury & Lifestyle hotels with the segment now representing 20% of both the existing system size and the pipeline in the region. Overall for the year, openings in the region were 29% up on 2022 and signings were 19% ahead. Turning now to capital expenditure. We spent gross CapEx of $253 million, and net CapEx was $157 million after proceeds from recyclable investment disposals and system fund inflows. Key money of $101 million, which was up from $64 million in 2022, is indicative of our increased development activity back to pre-COVID levels, and also a mark of our growth in the Luxury & Lifestyle segment.
Importantly, it is also a reflection of our discipline in only deploying funds where the returns justify the investment. Maintenance CapEx was $38 million, in-line with prior spend as we continue to ensure that our business and enterprise platform is fully invested. Turning to the System Fund, we continue to benefit from depreciation levels exceeding CapEx, which follows the completion of our major investment in the Global Reservations System. Moving now to cash flow. Adjusted free cash flow reached a record high of $819 million in 2023, once again demonstrating the highly cash generative nature of our business model. Adjusted earnings converted 129% into free cash flow for the year. Net cash outflow, after the payment of just over $1 billion across the dividends and share buybacks, was just over $300 million.
Together with adverse foreign exchange movements, this meant that the closing net debt position increased by $421 million. Our strategy for uses of cash remains unchanged. After investing behind long-term growth, which remains the foremost priority, we look to sustainably grow the ordinary dividend. In this regard, we are pleased to propose the final dividend will be $0.104 [ph], representing 10% growth on last year’s. A year ago, we announced a $750 million buyback programme, which completed in December. This repurchased 10.6 million shares at an average price of £55.88 per share, and reduced the share count by 6.1%. The 2023 programme, together with ordinary dividend payments, returned $1 billion to shareholders during the year, which was equivalent to 10% of IHG’s $10 billion market capitalisation at the start of 2023.
We are pleased to announce that a new share buyback programme will commence immediately, targeted to return $800 million over the course of 2024. On a prospective basis, given expectations for growth in EBITDA and cash generation in 2024, we would expect this to result in leverage around the lower end of our target range of 2.5 to 3 times at the end of 2024. It is worth mentioning a few housekeeping points for those who maintain forecast models of IHG’s performance. Interest costs will rise from 2023’s $131 million. This is due to higher net debt and our blended bond interest cost increasing to 3.7% following the recent issuance of a new bond. Our adjusted interest expense also includes the charge on System Fund balances, which increased in 2023 given the rise in SOFR benchmark rate that is used for this charge.
Where the SOFR rate ends up in 2024 will impact the charge for the year. So, at this stage, our expectation is adjusted interest expense to increase to between $155 million and $170 million for2024. Our adjusted effective tax rate is expected to be around 27% in 2024, compared with 28% 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. However, given our increased development activity and growing focus on the Luxury & Lifestyle segment, our normal course net capital expenditure is likely to be up to $200 million, an increase to our previous direction of around $150 million.
Elie, the regional leadership of IHG, and I will be talking a lot more about our growth ambitions in the separate webcast that provides an update on our strategic priorities. But as a quick reminder, and as included in our results announcement, the baseline drivers for IHG’s value creation are as follows: Fee revenue growth of high-single digit percent on average in the medium to long-term, through the combination of RevPAR and net system growth. Those should also drive annual fee margin accretion of 100 basis points to 150 basis points, which taken together should result in EBIT growth of around 10%. We expect to continue converting around 100% of earnings into free cash flow and that should enable routinely returning additional capital to shareholders, such as through annual share buyback programmes, which further enhances earnings growth.
The resulting opportunity is for compound growth in earnings per share of 12% to 15% annually on average over the medium to long-term, driven by the combination of the above. With that, let me now hand back to Elie.
