Holiday Inn 2011 Annual Report Download - page 27

ended the year with 658,348 rooms in our
system. We expect net system growth of
between two and three per cent in 2012.
CONTINUED RECYCLING OF CAPITAL
Franchised and managed hotels now
account for 74 per cent and 25 per cent,
respectively, of our system size with the
balance attributable to the remaining
11 owned hotels.
During the year we sold four hotels:
Hotel Indigo San Diego, Staybridge
Suites Cherry Creek, Holiday Inn
Atlanta-Gwinnett Place and Holiday Inn
Express Essen, and our joint venture
interest in Holiday Inn Burswood for
over $140 million – 22 per cent above net
book value – and retained management
or franchise agreements on each.
Staybridge Suites Cherry Creek and
Holiday Inn Atlanta-Gwinnett Place were
sold to Summit Hotel Properties, Inc.,
which will spend $2.5 million on
improvements.
SUPPORTIVE LONG-TERM TRENDS
We continue to out-perform with revenue
per available room (RevPAR) growth in
the year of 6.2 per cent compared to
5.9 per cent for the global industry. Global
room demand exceeded pre-recession
levels, breaking new records in the US
– our biggest market – since March.
Coupled with low supply growth, this
helped to boost both room night
occupancy and rate.
In the short-term, the future rate of growth
in the global economy – particularly in
the Eurozone – is uncertain. Looking to
the long-term, the prospects for the
sector remain bright due to supportive
trends including growing affluence in
many parts of the world, increased
urbanisation in developing economies,
growth in air travel, and changing
demographics.
STRONG BALANCE SHEET
In November, we completed the early
refinancing of our committed bank facility
given that the corporate lending markets
continue to be challenging. The new
five-year $1.07 billion facility demonstrated
our bank syndicate’s confidence in the
business and complements a £250 million
bond issued in 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.
more on the web: www.ihgplc.com How we operate 25
OVERVIEW GREAT BRANDS HOW WE OPERATE WHERE WE OPERATE FACTS AND FIGURES
Glenn Squires
2012 Chairman
IHG Owners Association
For information on the
IHG Owners Association,
go to www.owners.org
2011 will always be noted as the year
the IHG Owners Association changed
its name. From IAHI, the Owners’
Association to IHG Owners Association.
While that change may not look
significant from the outside, to the
leaders of this organisation and to our
IHG partners, it signifies our partnership
in a way that our old name did not.
Our new name reflects our representation
of IHG brands across the globe. The
former name stood for International
Association of Holiday Inns, and since
the mid-1980s, we have represented
more than just that one brand. Now our
name reflects the breadth of work the
Association fosters on behalf of all
owners. We are deeply grateful to
Bill DeForrest, our immediate past
chairman, for his passion to move our
rebranding forward.
Reflecting on the past year, I see it as a
year of strengthened alignment with IHG
to better serve our owners. Our volunteer
leaders and our IHG partners operate
from a shared foundation of mutual
respect and a shared understanding
that our decisions have real impact
for every hotel and owner worldwide.
We are aligned to improve return on
investment and the value of our assets
while growing shareholder value.
Aligning our global view
‘Where we compete’
Appropriate business model
Relevant consumer segments
Best developed and emerging markets
‘How we win’
Portfolio of preferred brands
Best-in-class delivery
Talented people
…achieved through strategic priorities
Growing our core business in the largest
markets where scale really counts, and also in
key global gateway cities and resort destinations
Seeking opportunities to leverage our scale
in new business areas
Profitable market share
Progressive margins
Sustainable investment
Responsible business
With a portfolio of preferred brands in the best developed and emerging markets,
our talented people are focused on delivering Great Hotels Guests Love and executing a clear
set of priorities to achieve our Vision of becoming one of the great companies of the world…