Holiday Inn 2015 Annual Report Download - page 17

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IHG’s Winning Model is our framework for delivering
superior value-creation through our brands, our people
and our systems.
Preferred brands delivered
through our people
Having a strong portfolio of preferred
brands is fundamental to our success.
In a highly competitive industry, powerful,
well-defined, consistent and well-known
brands are influential in ensuring both
guests and owners choose an IHG brand
over a competitor’s. Our talented people play
a critical role in providing consistently high
standards of guest service and delivering
each brand promise, and our ‘winning
culture’ encourages and empowers them
to bring each of our preferred brands to life.
Strong brands result in increased RevPAR,
through higher occupancy rates and guests’
greater willingness to pay a premium to stay
at their preferred brand. In turn, higher
RevPAR results in better returns for our
owners and fees for IHG. Informed by guest
and owner insights, we are focused on driving
brand preference for each of our brands.
See pages 20 and 21 for examples of our
actions to build preferred brands in 2015.
Build and
leverage scale
Scale provides significant advantages in
the hotel industry at the global, national
and city level. The size of the IHG System,
and our concentration in attractive markets
and key gateway cities, allows us to benefit
from economies of scale, which lead to higher
margins and operating leverage. Scale also
enables us to invest in our brands, including
the technology required to support their
continued growth, and to implement efficient
sales and marketing and procurement
practices, thereby increasing the advantages
an IHG brand brings to owners.
IHG already benefits from substantial scale
advantages, having over 744,000 rooms
open at the end of 2015, a top-five market
share position by rooms in eight out of our
10 priority markets, and System Funds
contributed in 2015 totalling $1.6 billion. To
achieve further targeted-scale benefits, we
focus on delivering high-quality growth in the
most attractive geographic markets, along
with building distribution in global cities that
benefit from very large international travel
flows, focusing on the luxury segment.
See page 17 for examples of how we
maximise the scale and efficiency of our
operations and page 38 for details of our
key openings in the luxury segment in 2015.
Strong brand portfolio
and loyalty programme
A portfolio of strong, complementary brands
allows us to offer solutions for every guest
need, which promotes cross-selling across
different hotel brands. This, combined with
a strong loyalty programme, increases
awareness and recognition of the IHG brand,
as well as each of the individual hotel brands,
helping us to drive business. Whilst we
continue to grow our brands to meet the
differentiated needs of our guests, we are
also focused on driving long-lasting and deep
relationships with guests by recognising and
rewarding them for their loyalty. In turn, this
is helping to ensure that IHG Rewards Club,
which has more than 92 million members
worldwide, is one of the largest and most
preferred loyalty programmes in the market.
See page 22 for examples of our actions
to build a strong brand portfolio and loyalty
programme in 2015.
Effective channel
management
We drive demand to our hotel brands through
strong brand awareness and effective revenue
management practices, reducing distribution
costs and delivering better returns for our
owners. Our direct channels (digital and voice)
are less costly to owners than third-party
intermediaries and we therefore drive demand
for our hotels through these channels and also
manage revenue per booking, delivering the
highest-quality revenues to IHG hotels at the
lowest possible cost.
See page 23 for examples of our actions
to build strong channels in 2015.
Superior owner
proposition
A strong owner proposition, preferred
brands, effective operational support and
long-standing owner relationships play
a vital role in making us the brand of choice
for owners. We are committed to delivering
a compelling and preferred owner offer, and
we continually review and enhance our owner
proposition in many ways. Specific examples
include the following:
• Evolving our hotel support model in The
Americas and Europe to deliver a more
owner-centric, customised offer. In The
Americas, for example, we have introduced
dedicated franchise performance support
leads who act as a single point of contact
for owners, helping to establish strategies
and activities that drive superior hotel
performance. These leads will also help
to navigate owners to IHG specialists in
the fields of Revenue Management,
Sales and Marketing, Operations and
Guest Experience.
• Continuing to invest heavily in our training
platforms, including ‘IHG Frontline’, which
will provide critical training to the circa
90,000 employees who will be recruited
by IHG in the managed estates, in addition
to a large number of staff in our franchised
properties. In addition, we also continue to
invest in developing our range of proprietary
revenue-driving tools and services, such as
Revenue Management for Hire, Price
Optimisation and IHG Way of Sales.
• Running our annual, global Owner
HeartBeat satisfaction survey, which
yields valuable insight from our owners
on the relative strengths and weaknesses
of our proposition and enables us to deliver
targeted enhancements to our offer.
• Maintaining strong owner relationship
management and working with the
IHG Owners Association (which represents
the interests of our hotel owners
globally) to deliver joint initiatives.
See www.ihgplc.com/ihgowners for
more information.
15IHG Annual Report and Form 20-F 2015
STRATEGIC REPORT GOVERNANCE GROUP FINANCIAL STATEMENTS ADDITIONAL INFORMATIONPARENT COMPANY FINANCIAL STATEMENTS