Holiday Inn 2008 Annual Report Download - page 10

8IHGAnnual Report and Financial Statements 2008
Business review continued
Where we compete
Key performance indicators Current status and
Strategic priorities (KPIs) 2008 developments 2009 priorities
To accelerate profitable
growth of our core
business in the largest
markets where the
Group currently has
scale and also in key
global cities. Seek
opportunities to leverage
our scale in new
business areas.
• Progress against the following 2008
growth targets, set in June 2005:
– 50,000-60,000 net rooms growth;
– 125 hotels in China; and
– 15-25 net InterContinental
hotel additions.
• 2008 growth targets accomplished,
with exception of China where we
reached 112 hotels. (Target expected
to be exceeded during early 2009);
• International launch of Hotel Indigo
– first one open in London, UK and
one signed in Shanghai, People’s
Republic of China;
• Holiday Inn Club Vacations
(franchise timeshare) conceived
and launched; and
• 81% of pipeline focused on core
strategic countries.
• Continue international roll-out of
Staybridge Suites and Hotel Indigo;
• Execute growth strategies in agreed
scale markets;
• Continue to focus on rapid and
successful opening of pipeline
hotels; and
• Seek ways to leverage scale and
build improved strategic position
during the economic downturn.
Strategy
IHG’s ambition
IHG seeks to deliver enduring top quartile shareholder returns,
when measured against a broad global hotel peer group, by
focusing on its core purpose of creating Great Hotels Guests Love.
We measure success in three ways:
• Total Shareholder Returns. (For the three-year period of 2006
to 2008, IHG was third among its peers);
• Rooms Growth – rooms added to our brands at a rate faster
than competitors. (In 2008 we grew by 5.9% against an average
of 4.3% for our main competitors); and
• a basket of specific key performance indicators (KPIs) aimed
at delivering our core purpose, cascaded to the hotel level.
Successful performance against various combinations of these,
and other, metrics drives payment of a significant percentage
of senior management discretionary remuneration.
IHG’s strategy
Our strategy has seen significant development through 2008 as we
moved to make our core purpose a reality. We have taken a hard
look at our operations and capabilities to focus on what really
matters most to deliver Great Hotels Guests Love. We have backed
this up with a major effort to align our people and measure the most
important drivers, resulting in a clear, target-based programme
within our hotels to motivate teams and guide behaviours.
Our strategy now encompasses two key aspects:
• where we choose to compete; and
• how we will win when we compete.
The Group’s underlying ‘Where’ strategy is that IHG will grow a portfolio
of differentiated hospitality brands in select strategic countries and
global key cities to maximise our scale advantage. The ‘How’ aspect
of our strategy flows from our core purpose and our research at the
hotel level as to what really makes a difference for guests.
In support of our overall strategy there are now five key priorities –
one ‘Where we compete’ and four ‘How we win’: