Holiday Inn 2013 Annual Report Download - page 30

Attractive markets
Our growth strategy is focused on the largest and/or fastest
growing markets in which IHG has strong existing brand
presence or an opportunity to build a brand presence,
where our scale and revenue delivery systems confer the
greatest benefits and markets which are aligned to our
asset-light business model. In these markets, we seek to
take market share through our portfolio of brands, in the
right locations, according to guest demand.
US
According to Smith Travel Research, the US is the largest
market for brandedhotels, with 3.4 million rooms,accounting for
70 per cent of all US rooms available. The segment in the US with
the greatest share is midscale, with 1.34 million branded hotel
rooms, and IHG’s Holiday Inn brand family (comprising Holiday Inn
Hotels & Resorts, Holiday Inn Club Vacations, Holiday Inn Resort
and Holiday Inn Express) is the largest in this segment. As at
31 December 2013, we had a total of 391,580 rooms (3,244 hotels)
open and 63,860 rooms (604 hotels) in the pipeline across the
region. Of the open ones, the Holiday Inn brand family comprised
271,936 rooms (2,483 hotels).
Greater China
In Greater China, IHG continues to build on a position of
strength. Having entered the market early (2014 will mark
our 30th anniversary in the region), we continue to develop our
relationships with key local owners and grow our presence rapidly.
In a country with 790,670 branded hotel rooms (Smith Travel
Research), IHG has over 68,545 rooms (208 hotels) open and
54,590 rooms (174 hotels) in our development pipeline.
Our pipeline reflects our strategy to deepen our penetration in
key cities such as Beijing and Guangzhou, ensuring we have
more hotels in key resort locations such as Sanya, and targeting
tier 2 and tier 3 cities with a growing middle-class demographic.
India
During 2013, we continued to increase our presence in India
particularly through Holiday Inn and Holiday Inn Express,
opening a total of 818 rooms (5 hotels) and signing 1,404 rooms
(9 hotels) into our pipeline. Accordingly, as at 31 December 2013,
we had a total of 3,152 open rooms (18 hotels) and 9,088 rooms
(45 hotels) in the pipeline.
Russia and the Commonwealth of Independent States
These countries present opportunities for new construction
and conversions as well as strong demand for branded hotels,
and in 2013, we signed 1,737 rooms (10 hotels) into our development
pipeline. As at 31 December 2013, the total number of open rooms
was 5,283 (19 hotels) with 3,883 rooms (17 hotels) in the pipeline.
Our priority markets
In November 2013, we stated our 10 priority markets, which include
a number of key emerging markets and more developed markets
– US, Middle East, Germany, UK, Canada, Greater China, India,
Russia and the Commonwealth of Independent States, Mexico and
Indonesia. Information on our priority markets can be found at
www.ihgplc.com/investors.
Outside our priority markets
Outside our priority markets, we focus onbuilding presence in key
gateway cities and resorts where our brands can generate revenue
premiums from high business and leisure demand. For example,
in 2013, we opened an InterContinental hotel in Osaka, our first
InterContinental to open in Japan for over 15 years, and an
InterContinental in Lagos, Nigeria. We also announced a 15-hotel
multiple development agreement in Australia for the Holiday Inn
Express brand.
Our performance across the Group and in each of our regions is set out
on pages 40 to 50.
Future developments
As the industry continues to grow, IHG faces increased competition
from other global branded hotel companies and other providers
of accommodation (discussed in the Industry overview section
on pages 10 and 11). We recognise this and have developed our
Winning Model, which underpinned by Disciplined Execution,
enables us to continue to deliver high-quality growth.
For details on our Winning Model see pages 18 and 20 to 27 and
Disciplined Execution see pages 18, 19 and 30 to 33.
Our KPIs, including Net rooms supply, are set out on pages 38 and 39.
See pages 36 and 37 for how IHG manages its principal risks.
We are focused on a Targeted Portfolio operating:
• in the most attractive markets for IHG;
• in the highest opportunity segments based on
guests’ occasion needs; and
• an asset-light business model, which means we
focus on franchising and managing hotels rather
than owning them.
Hotel Indigo Tianjin Haihe, People’s Republic of China
28 IHG Annual Report and Form 20-F 2013
TARGETED PORTFOLIO DISCIPLINED EXECUTIONWINNING MODELTargeted Portfolio