Holiday Inn 2014 Annual Report Download - page 30

Managing risks in a changing environment
We continue to experience an increasingly risk aware and dynamic external risk environment with changes in political, economic, social,
technological, legal and environmental risks. However, the Group’s asset-light business model, diversity of brand portfolio and wide
geographical spread contribute to IHG’s resilience to events that could affect specific hotels or local areas.
The table below sets out the principal risks and uncertainties (the Major Risks) in the context of delivering against our strategy for
high-quality growth (as described on pages 14 to 25). Whilst the external risk environment is increasingly volatile, uncertain and
competitive, this is offset by our decision-making and strengthening risk culture, and efforts to continuously improve controls and
mitigation actions (some of which is summarised below). These Major Risks align to our strategic priorities and are therefore proactively
managed and monitored by senior management. They complement the wider comprehensive risk factors set out on pages 162 to 165.
Risk description Controls and mitigations
Preferred brands
Having a portfolio of brands with a clear,
distinct brand proposition aimed at meeting
increasingly personalised guest needs and the
occasions they are travelling for, and delivering
a consistent experience, is crucial to creating
brand preference, loyalty and advocacy.
Failure to achieve this could impact on IHG’s
competitive position and our reputation with
guests, owners and investors.
WM TP
• Each of the brands in our portfolio of brands is designed to meet specific guest needs
and occasions through distinct and complementary brand propositions (see pages 4, 5
and 18). Our recent acquisition of Kimpton Hotels & Restaurants adds to the strength of
our portfolio and, together with EVEN and Hotel Indigo, enhances our boutique and
lifestyle business (see pages 20 and 21).
• We will continue to deliver on the growth of the Kimpton brand, running it as a standalone
business to preserve its uniqueness.
• We continually review ways to increase awareness and loyalty towards our brands
through our loyalty programme, IHG Rewards Club, as well as a blend of global and local
marketing promotions, sponsorships and brand initiatives to create synergies across the
brand portfolio.
• We manage brand consistency through the entire hotel life cycle supported by clear
contractual terms, new hotel opening processes, brand standard requirements and
compliance processes. This is supported by tools, training and guidance to assist
those working at our hotels and owners to enable them to deliver brand consistency.
Leadership and talent
IHG must recruit and retain the right people
and give them the tools, guidance and support
to be successful in order to deliver a preferred
brand promise. Recruiting and retaining
people to work in its hotels, especially in
rapidly growing emerging markets, is a
particular challenge and ensuring we
have the right leadership is crucial.
Failure to manage these could impact on IHG’s
service delivery and IHG’s brands, result in
increased cost of recruitment and have a
broader impact on performance and delivery.
WM DE RB
• We have in place a comprehensive global people strategy (see page 23) to ensure we
are able to recruit, retain and develop talent at our hotels, corporate offices and central
reservations offices. This includes our Room to be yourself commitment underpinned
by a set of globally consistent policies, guidance, systems and tools, with localisation
where appropriate.
• Supplementing the global strategy, we have developed local people strategies for some
of our priority markets to ensure we are best placed to be the employer of choice in these
markets. These strategies make necessary adjustments to meet local languages, laws,
customs and cultural nuances and to effectively leverage local recruitment channels.
• IHG Academy assists us to fill our talent pipeline whilst supporting the local communities
(see page 25).
• Our leadership framework, support tools, and training and development programmes
help our people grow their careers, thereby managing internal talent. We proactively
manage and monitor succession planning at all levels. We consider the diversity (more
broadly than gender) of our people and leadership, reviewing it in light of our guests and
the local communities in which we operate (see page 62).
How each Major Risk links to our strategic
priorities (described on pages 16 to 25)
Winning Model
Targeted Portfolio
Disciplined Execution
Responsible Business
WM
TP
DE
RB
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IHG Annual Report and Form 20-F 2014
Risk management continued