Holiday Inn 2011 Annual Report Download

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Make a booking at
www.ihg.com
ANNUAL REVIEW
AND SUMMARY
FINANCIAL
STATEMENT 2011

Table of contents

  • Page 1
    ANNUAL REVIEW AND SUMMARY FINANCIAL STATEMENT 2011 Make a booking at www.ihg.com

  • Page 2
    ...Executive's review We operate 4,480 hotels and 658,348 rooms internationally GREAT BRANDS 6 Delivering great brands 8 InterContinental Hotels & Resorts 10 Crowne Plaza Hotels & Resorts 12 Hotel Indigo 14 The Holiday Inn brand family 18 Staybridge Suites 20 Candlewood Suites 22 Priority Club Rewards...

  • Page 3
    ... seven highly-respected brands internationally. Our ambition is to become one of the world's great companies by creating Great Hotels Guests Love. With 4,480 hotels worldwide, we know hospitality. At the heart of our culture is a commitment to acting responsibly in everything we do. Crowne Plaza...

  • Page 4
    ...2010 $444m) The Americas $451m†(2010 $369m) Europe $104m (2010 $78m) Asia, Middle East and Africa $84m†(2010 $82m) Greater China $67m (2010 $54m) Revenue per available room∞ up 6.2% Total number of rooms operating under IHG brands 658,348 (4,480 hotels) 7m new Priority Club Rewards members...

  • Page 5
    ... makes him an ideal addition to the team, and I am pleased to welcome him to the Board as an Executive Director. On 13 June 2011, Jim Abrahamson, President, The Americas and an Executive Director of IHG since 1 August 2010, left the Company to take up a role as the CEO of an independent US lodging...

  • Page 6
    ... The Holiday Inn relaunch continues to drive results for both IHG and our owners. In 2011, the brand once again grew its industry segment premium and for the first time ever was awarded 'Highest in Guest Satisfaction among Mid-Scale Full Service Hotel Chains' in the coveted J.D. Power and Associates...

  • Page 7
    ...HOTELS GUESTS LOVE Preferred brands Talented people Responsible business practice INVEST IN GROWTH Grow market share Sustainable margin growth Best-in-class delivery GREAT BRANDS Crowne Plaza Gurgaon, India InterContinental Alliance Resort opened during 2011, we continue to expand Holiday Inn Club...

  • Page 8
    ..., Priority Club Rewards, whose 63 million members are some of our most valued customers. In 2011, these revenue systems delivered 69 per cent of our total rooms revenue with a double-digit percentage rate premium versus business booked directly with hotels. This drives better returns for our owners...

  • Page 9
    ...per available room (RevPAR). BRINGING CUSTOMERS BACK The first and largest hotel loyalty programme in the world, Priority Club Rewards drives greater preference for our brands and higher guest return rates. In fact, the programme has been named Global Traveler magazine's 'Best Hotel Rewards Program...

  • Page 10
    ...® and The Palazzo® resorts, owned by Las Vegas Sands, joined our system. The Montelucia Resort and Spa in Scottsdale, Arizona also joined the programme, which offers more landmark resort locations to our customers and enables guests to earn Priority Club Rewards when booking through our channels...

  • Page 11
    ...a vital role in delivering a first-rate guest experience. To help our owners and managers hire, train, involve and recognise the right people, in 2011 we developed brand-orientated support and a new suite of tools - including recruitment and advertising guidelines and job descriptions. GREAT BRANDS...

  • Page 12
    ...IHG Annual Review and Summary Financial Statement 2011 Travelling for Success We love to help our guests reach their personal business goals - one after the other - and accelerate their journey to success. We do this by combining the best facilities with great service so our guests feel productive...

  • Page 13
    ...ambitions. We are currently repositioning Crowne Plaza to target this market more precisely. New products and services are under development to give guests the space and technology they need to be highly productive and to feel restored and re-energised for the day ahead. GREAT BRANDS HOW WE OPERATE...

  • Page 14
    ...continuous renewal programme, we successfully piloted several new concepts: a Drink Well service at reception offering guests a drink on arrival and self-serve wine, coffee and sundries in other public spaces. LOCALS KNOW BEST WITH CURTIS STONE Celebrity chef Curtis Stone checked in to Hotel Indigo...

  • Page 15
    ...the web: www.ihgplc.com Great brands 13 TOP FOR GUEST SATISFACTION Hotel Indigo ranked 'Highest in Guest Satisfaction Among Upscale Hotel Chains' in the prestigious J.D. Power and Associates¤ 2011 North American Hotel Guest Satisfaction Index StudySM. High guest satisfaction was evident in other...

  • Page 16
    ... for our friendly service, comfort and value. Now that we have all but completed our worldwide refit, business and leisure travellers are finding Holiday Inn offers even better quality and service. Our new identity, contemporary lobbies and refreshed guest rooms are designed to help guests relax...

  • Page 17
    ... the web: www.ihgplc.com Great brands 15 GUESTS APPROVE NEW STANDARDS Holiday Inn had a year of outstanding performance in the guest satisfaction stakes, ranking 'Highest in Guest Satisfaction among Mid-Scale Full Service Hotel Chains' by J.D. Power and Associates¤, and taking first place among...

  • Page 18
    ... of Las Vegas Sands (LVS), we signed a franchise contract for the world's largest Holiday Inn - Holiday Inn Macao Cotai Central. Opening in early 2012, it will offer 1,224 rooms within Sands China's newest integrated resort, Sands Cotai Central. A haven for casino lovers, the resort boasts a line-up...

  • Page 19
    more on the web: www.ihgplc.com Great brands 17 NEW MARKETS FOR HOLIDAY INN EXPRESS A joint venture and 20-year management contract with Delhibased Duet India Hotels Group will create 19 Holiday Inn Express hotels by 2016. The deal earmarks $30 million of our own cash to launch the brand across ...

  • Page 20
    ... keep in touch with our teams and each other while on the road. Early in 2012 we plan to add the 'Digital Fridge' and 'The Board' to our online presence. These interactive apps will allow guests to swap travel tips, share ideas and have their say about what we stock in hotel stores. We aim to add 10...

  • Page 21
    ...gatherings and weekly barbecue. The brand's traditional evening reception has meanwhile been renamed 'The Social' to convey the convivial atmosphere that characterises a typical bar or pub. OVERVIEW www.staybridgesuites.com Region Hotels Hotels in Rooms pipeline GREAT BRANDS Americas Europe AMEA...

  • Page 22
    ... app enables fans to exchange ideas and travel tips and draws on our links with the NHRA and its large social media network. King of The Road has helped attract over 12,000 new fans to our Facebook page. Our target is to have 20,000 by the end of 2012. Candlewood Suites San Antonio, US ON THE ROAD...

  • Page 23
    ...a system of trust. Guests can borrow items such as coffee grinders and rice cookers and return them once finished. Being trusted in this way is valued by guests as unique to our brand. Hotels will be able to introduce the concept from early 2012. FACTS AND FIGURES Candlewood Suites San Antonio, US

  • Page 24
    ...the first hotel rewards programme to launch an online gaming platform. Between 24 January and 15 April 2011, we awarded almost three million points a week to PCR members who took part in a new game, called 'Win it in a Minute'. In 2011 Priority Club Rewards was named the 'Best Hotel Rewards Program...

  • Page 25
    ... hotels 153 million guests annually GREAT BRANDS BRAND PORTFOLIO Seven preferred hotel brands PRIORITY CLUB REWARDS 63 million members, contributing over $6.9bn to global system rooms revenue WEB/MOBILE 11 language sites Eight language apps REVENUE MANAGEMENT World-class systems room revenue...

  • Page 26
    .... Our strategy is to create high-quality growth by developing our brands and relationships to increase market share and improve our margins and returns to owners. We invest our free cash ï¬,ow to accelerate our growth in existing and new emerging markets which offer attractive long-term prospects...

  • Page 27
    ... 2009. At the end of 2011, the new facility remained substantially undrawn providing us with the ability to continue to invest in the development of the business and deal with any economic downturn. WHERE WE OPERATE SUPPORTIVE LONG-TERM TRENDS We continue to out-perform with revenue per available...

  • Page 28
    ...is right for our guests. We have been introducing this culture change throughout 2011, supported by key initiatives such as a new Heart of House which has transformed the hotel 'back of house' into a place that involves employees by inspiring them on IHG, their brand, hotel and team. It should be an...

  • Page 29
    ... a pivotal role in engagement, something the IHG Owners Association acknowledged when it created Celebrate Service week. In 2011, 3,000 hotels hosted 'thank you' celebrations and encouraged employees to share 1,600 service stories. The Leaders Lounge is our award-winning online community for 1,360...

  • Page 30
    ... way hotels view and interact with Priority Club Rewards members and other loyal guests. Our new web-based loyalty application, LoyaltyConnect, provides a more intuitive way to manage loyalty-related tasks, such as building targeted marketing campaigns and updating the millions of guest profiles in...

  • Page 31
    ... high-speed internet access in our hotel rooms, with a welcome page showing relevant promotions and local attractions, and included enhanced Google Maps search capabilities. We also started to roll out Google Mail, applications and collaboration tools to hotels and offices worldwide, improving...

  • Page 32
    ... and environmental responsibility. During 2011 the Board's CR priority was to ensure that IHG's CR strategy is rooted in our strategic and brand planning processes, thereby protecting and creating value for IHG and its brands. A more detailed review of the CR team's work during 2011 can be found on...

  • Page 33
    ... 2011 our Legal team provided training for over 6,000 employees around the world on the UK's new anti-bribery legislation and IHG's Anti-bribery policy. RESPONSIBLE CULTURE We endeavour to instil our values and responsible business culture from the boardroom to every hotel guest room. We train...

  • Page 34
    ... IHG Annual Review and Summary Financial Statement 2011 CORPORATE RESPONSIBILITY Corporate responsibility (CR) is part of our culture and part of the way we do business. Doing the right thing creates shared value, reinforces trust in our brands and helps our hotels manage costs, drive revenue and...

  • Page 35
    ... Initiative led by IHG and the industry's largest hotel groups and co-ordinated by the International Tourism Partnership and World Travel & Tourism Council. GREAT BRANDS HOW WE OPERATE IHG SHELTER IN A STORM PROGRAMME We have a long history of helping communities in times of disaster. The IHG...

  • Page 36
    ... our major markets. We now have four operating regions: The Americas; Europe; Asia, Middle East and Africa (AMEA); and Greater China. The Americas Europe Hotels Rooms Hotels Rooms InterContinental Crowne Plaza Holiday Inn Holiday Inn Express Holiday Inn Club Vacations Hotel Indigo Staybridge...

  • Page 37
    ... 658,348 rooms globally 1,144 hotels in the pipeline 180,484 rooms in the pipeline GREAT BRANDS HOW WE OPERATE Asia, Middle East and Africa Greater China WHERE WE OPERATE Hotels Rooms Hotels Rooms InterContinental Crowne Plaza Holiday Inn Holiday Inn Express Staybridge Suites Other...

  • Page 38
    ... opening of Canada's largest Holiday Inn; a new Holiday Inn Resort for Acapulco in Mexico; and the official launch of InterContinental Alliance Resorts (see page 8). FIRST FOR GUEST SATISFACTION In the J.D. Power and Associates¤ 2011 North America Hotel Guest Satisfaction Index StudySM, Holiday Inn...

  • Page 39
    ...• Revenue up 24% to $405m • Operating profit* up 33% to $104m *Before exceptional items NUMBER OF ROOMS BY BUSINESS MODEL Franchised Managed Owned & Leased 76,811 22,157 917 TOTAL ROOMS OPEN Rooms in pipeline TOTAL HOTELS OPEN Hotels in pipeline 99,885 16,682 GREAT BRANDS 612 98 KEY MARKETS...

  • Page 40
    ... Indigo resort for Phuket, Thailand and a record number of Holiday Inn Express signings, including our first in Perth, Australia. BUILDING MANAGEMENT SKILLS IHG was named best employer in Singapore, Malaysia, Australia and New Zealand by the Aon Hewitt study, which surveys over two million employees...

  • Page 41
    ... the new name captures the essence of our limited-service hotels for Chinese guests but also carries the heritage of the world-renowned Holiday Inn brand. ON TARGET TO DOUBLE IN SIZE We added 26 hotels and 8,084 rooms in 2011, ending the year with 167 hotels. In all, we opened four InterContinental...

  • Page 42
    ... to one percentage point after adjusting for a number of one-off benefits. During 2011, the IHG global system increased by 43 hotels (11,187 rooms). Openings of 241 hotels (44,265 rooms) were driven by continued expansion in the US, in particular within the Holiday Inn brand family and Greater China...

  • Page 43
    ... to $46m and operating profit increased by $1m (25.0%). Net financial expenses remained flat at $62m as costs relating to the new syndicated bank facility offset the impact of lower levels of net debt. The effective rate of tax was 24% (2010 26%). Basic earnings per ordinary share in 2011 was 159...

  • Page 44
    ... the Companies Act 2006. Summarised Group income statement 2011 Before exceptional items $m Exceptional items $m Before exceptional items $m Exceptional items $m 2010 For the year ended 31 December 2011 Total $m Total $m Revenue Americas Europe AMEA Greater China Central Total revenue Operating...

  • Page 45
    ... 78 GREAT BRANDS Summarised Group statement of financial position HOW WE OPERATE 31 December 2011 2011 $m 2010 $m ASSETS Property, plant and equipment Goodwill and intangible assets Investment in associates and joint ventures Retirement benefit assets Other financial assets Non-current tax assets...

  • Page 46
    ... of the American Express Company. Serves as a Non-Executive Director of Yum! Brands, Inc. and of Modern Bank, N.A., and on a number of US Councils and advisory boards. Age 68. Independent Non-Executive Director#•∞ Appointed a Director in December 2007. Was previously Vice President and Chairman...

  • Page 47
    ...global talent management, leadership development, employee reward strategy and implementation, organisational capability and operations support. Age 48. Richard Solomons Chief Executive†∞ Appointed Chief Executive in July 2011. Joined the Group in 1992 and held a number of senior roles with his...

  • Page 48
    ...IHG Annual Review and Summary Financial Statement 2011 SUMMARY DIRECTORS' REPORT Activities of the Group The principal activities of the Group are in hotels and resorts, with franchising, management, ownership and leasehold interests in over 4,400 establishments, with more than 658,000 guest rooms...

  • Page 49
    ... available on the Company's website at www.ihgplc.com/investors under corporate governance/ committees or from the Company Secretary's office on request. Induction programmes are prepared for new Directors and ongoing training and development needs for all Directors are kept under review. The 2011...

  • Page 50
    ... having been reduced in 2009 from 270% of base salary. In the previous Remuneration report, we introduced two new performance measures for the 2011 LTIP award to enhance alignment of the plan to the Company's strategy. These measures will apply to the 2011/2013 LTIP cycle award, which will vest in...

  • Page 51
    ... the Executive Directors, for targets achieved, provided those targets are stretching. Business strategy is the driver of our reward structure. We show below how IHG's Vision and strategy directly link to the current measures used in IHG's incentive plans. WHERE WE OPERATE GREAT HOTELS GUESTS LOVE...

  • Page 52
    ... 2011 salary paid â- 2011 ABP cash â- 2011 ABP deferred shares â- 2009/2011 LTIP * Mr Kinsell is paid in US dollars and the sterling values in the chart above have been calculated using an exchange rate of $1=£0.62. The percentage of total remuneration for 2011 that is performance-related...

  • Page 53
    ... 156.6 N/A 173.9 WHERE WE OPERATE Long Term Incentive Plan The LTIP allows Executive Directors and eligible management employees to receive share awards, subject to the achievement of performance conditions, measured over a three-year period. Awards are made annually and, other than in exceptional...

  • Page 54
    ... shareholder return index 31 Dec 2009 Dow Jones Global Hotels total shareholder return index 31 Dec 2010 31 Dec 2011 Source: Datastream InterContinental Hotels Group PLC total shareholder return index Share ownership Executive Directors are expected to hold twice their base salary in shares, or...

  • Page 55
    ... represent salary, fees and cash bonuses (excluding pensions and bonus awards paid in deferred shares) and tax assessable benefits and allowances, including company cars and healthcare cover: 1 Jan 2011 to 31 Dec 2011 £000 1 Jan 2010 to 31 Dec 2010 £000 GREAT BRANDS Executive Directors Andrew...

  • Page 56
    54 IHG Annual Review and Summary Financial Statement 2011 SUMMARY REMUNERATION REPORT continued Pensions It was announced on 29 September 2011 that the UK registered defined benefit InterContinental Hotels UK Pension Plan (the IC Plan) would close to future accrual for existing members with effect...

  • Page 57
    ...year Market price per share at vesting Value at vesting £ Awards held at 31 Dec 2011 90,000 - 45,000 46,635 1,373.4p 618,030 - 46,635 539,567 GREAT BRANDS 1 James Abrahamson received a special share award which was to vest over three years as part of his recruitment terms in 2009. Vesting...

  • Page 58
    ..., IHG's Annual Report and Annual Review have been made available to shareholders through the Company's website www.ihgplc.com/investors under financial library. Share dealing services Equiniti offer a postal dealing facility for IHG shares. For more information on this service, call 0871 384...

  • Page 59
    ... date Record date Payment date Payment date Holiday Inn and Hotel Indigo received the highest numerical score among mid-scale full service and upscale hotels, respectively, in the proprietary J.D. Power and Associates 2011 North America Hotel Guest Satisfaction Index StudySM. Study based on...

  • Page 60
    InterContinental Hotels Group PLC Broadwater Park, Denham, Buckinghamshire UB9 5HR United Kingdom Telephone: +44 (0) 1895 512 000 Fax: +44 (0) 1895 512 101 www.ihgplc.com Make a booking at www.ihg.com InterContinental Beijing Beichen, China