Holiday Inn 2014 Annual Report Download - page 19

How we measure it
KPIs – Total gross revenue, RevPAR,
System contribution to revenue,
Guest HeartBeat
How we measure it
KPIs – System contribution to revenue,
RevPAR
How we measure it
KPIs – All KPIs measure the strength
of our owner proposition
Strong brand
portfolio and loyalty
programme
Why we think this is important
A portfolio of strong, complementary
brands allows us to offer solutions for each
guest need, which increases cross-selling
across different brands. Combined with
a strong loyalty programme, it also
increases awareness and recognition of
the IHG brand, and of each of the individual
hotel brands, helping us to drive business.
Guests who have an increased loyalty
to IHG and its portfolio have also proven
to have a higher spend per stay. Both of
these result in higher RevPAR premiums,
thereby increasing total gross revenue
and strengthening our owner proposition.
What we are doing
Our brands are complementary across
the segments in which they operate
(midscale, upscale and luxury), catering
to different guest needs and occasions.
One of our newest brands, EVEN Hotels,
caters to an identified guest need for
maintaining wellness while travelling
and the acquisition of the Kimpton brand
has a strong strategic fit with our Hotel
Indigo and EVEN Hotels brands (see pages
20 and 21). Recognising the importance of
a strong loyalty programme, we encourage
guests to stay across the portfolio and
build lifetime relationships through the
IHG Rewards Club programme, which has
84 million members. We continue to evolve
our loyalty programme to ensure that it
is not just the largest in the market, but
also the most preferred – refreshing
and reviewing the rewards and benefits
available to increase its attractiveness to
our guests. We recognise our loyal guests
and aim to personalise their experiences.
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Eective channel
management
Why we think this is important
As a franchisor and manager of hotels,
we aim to drive demand to our hotel brands
and reduce distribution costs for our
owners through strong brand awareness
and effective yield-management practices,
delivering better returns for our owners.
Our direct channels (digital and voice)
are less costly to owners than third-party
intermediaries. Our strong brands are
a significant driver of bookings through
indirect channels (online travel
intermediaries (OTIs) and business and
leisure travel agents). We therefore aim
to drive demand for our hotels through our
direct channels and manage revenue per
booking, thereby delivering the highest
quality revenues to IHG hotels at the
lowest possible cost, increasing RevPAR
and owner returns.
What we are doing
Our direct and indirect channels delivered
71 per cent of total rooms revenue to our
hotels in 2014. Our digital business has
significant scale and is growing fast,
accounting for $4 billion in revenue in
2014. We continue to invest in features
that enhance the digital experience,
with branded and personalised offerings
to encourage guests to book via our
direct channels.
We recognise the impact of OTIs as an
indirect booking channel, mainly used
by comparison-site shopping leisure
travellers searching for a competitive deal.
We have therefore leveraged our global
footprint to secure better terms with the
OTIs on behalf of our owners, whilst
leveraging OTIs as a complementary
distribution channel.
For details on our investment in developing
strong technology platforms, see page 22.
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Superior owner
proposition
Why we think this is important
We recognise that hotel owners have
a choice of brand, if any, to choose for
their property. A strong owner proposition,
preferred brands and effective operational
support, play a vital part in making us the
brand choice for owners. Relationships
with new and existing owners therefore
have a significant impact on our ability
to build scale. A strong owner proposition
and relationships with our owners also
enable us to deliver the brand promise
for our guests and continue building
preferred brands.
What we are doing
We are committed to delivering a
compelling and preferred owner offer.
We continually review and enhance our
owner proposition in many ways, including:
• ensuring a profitable return on
investment for our owners, assisting
them along the lifecycle of their
investment, from identifying the right
site to operating a profitable business;
• providing a range of revenue-driving
tools and services, including booking
and distribution channels;
• seeking to price our fees to reflect
our services, tools and brand value;
• having strong owner relationship
management and working with the
IHG Owners Association (which
represents the interests of our hotel
owners globally) to deliver joint
initiatives – www.ihgplc.com/ihgowners;
• recognising the importance of
responsible business practices to all
stakeholders, and developing tools
which support both our commitment to
doing business responsibly and
delivering superior returns to our
owners (see pages 24 and 25).
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STRATEGIC REPORT GOVERNANCE
GROUP FINANCIAL STATEMENTS
PARENT COMPANY FINANCIAL STATEMENTS
ADDITIONAL INFORMATION