Holiday Inn 2010 Annual Report Download - page 12

10 IHG Annual Report and Financial Statements 2010
Business review continued
Winning with a brand portfolio focused on relevant consumer
segments
We offer hotel brands that appeal to guests with different needs
and tastes. This requires a portfolio of large global brands, growing
alongside innovative new brands to meet the unique experiences
our guests desire.
The hotel industry is usually split into segments based upon price
point and consumer expectations. IHG is focused on the three
segments that together generate over 90% of branded hotel
revenues: midscale (broadly 3 star hotels), upscale (mostly 4 star),
and luxury (5 star).
• InterContinental Hotels and Resorts is IHG’s 5 star brand
located in major cities in over 60 countries worldwide. With over
60 years experience, the brand’s understanding of high quality,
understated service and outstanding facilities, coupled with a
genuine interest in our guests differentiate it in a competitive
segment. The philosophy of the brand is to enable every guest
to maximise the enjoyment of their stay – specialising in engaging
guests with the destination by sharing local knowledge to create
authentic experiences that enrich our guests’ lives and help
them broaden their outlook. Hotels under this brand tend to
be managed by IHG;
• Crowne Plaza Hotels and Resorts, in the upscale 4 star
segment, specialises in offering state-of-the-art business
and meeting facilities that provide productive, successful and
energising experiences to guests who believe travel is fun and
rewarding. The majority of hotels under this brand tend to be
franchised agreements in the US and Europe, and managed
elsewhere in the world;
• The Holiday Inn family of brands is the world’s largest midscale
hotel brand family by number of rooms, and IHG’s most
significant operation. Focused around a relaxed atmosphere,
the brands are designed to support both business travellers
and families. During 2010, the brand family neared completion
of a $1bn refresh, updating their image by upgrading facilities,
service and amenities, ensuring the brands continue to remain
competitive within their midscale markets. The family adds to
IHG’s record of firsts, being both the first international hotel
chain to open in China in 1984, and to launch a direct bookings
website in 1995. The Holiday Inn brand family operates
predominantly under franchise agreements;
• Hotel Indigo is our boutique and youngest brand, launched in
2004, and focuses on a guest that appreciates art and design
and that is seeking affordable luxury. Hotel Indigo provides
guests with the refreshing design and intimate service
synonymous with a boutique along with the consistency,
reliability, and accessibility of a branded hotel. Each hotel is
unique and reflects its local neighbourhood with local murals
and images, a vibrant colour palette and locally sourced and
seasonal menu items. Hotels under this brand tend to be
franchise agreements; and
Competing in the best developed and emerging markets
When considering open hotel rooms and those in development, we
have leadership positions in 15 of the top 20 markets globally. These
markets alone account for over 80% of global lodging spend. These
include large developed markets such as the United States (US),
United Kingdom (UK) and Germany, as well as emerging markets
like China.
The US is the largest market for branded rooms, at 3.4m.
The segment in the US with the greatest share is midscale, with
1.3m branded hotel rooms, and IHG’s Holiday Inn brand family
is the largest in this segment.
IHG is also focused on growing in large markets such as the UK
and Germany where we rank 2nd and 3rd, respectively. The benefits
of a large hotel presence across these high-value self-supporting
markets for IHG include the ability to build relationships with the
largest possible number of guests.
IHG is the largest hotel company in China, the emerging market
with the greatest scale, having 0.5m branded rooms. IHG, which
was the first international chain to open hotels in the country,
remains the largest, with close to 50,000 rooms. The rapid pace
of openings for IHG and the wider lodging industry shows that China
and other emerging markets are behaving as we have seen in
developed markets over the past 50 years. The strong demand
drivers for hotels suggest these will remain key growth markets.
Outside the largest markets, we focus on achieving presence for
our biggest brands in key gateway cities which show the potential
for high demand from business and leisure guests, and where our
brands can generate revenue premiums.
In the hotel industry, the future supply of hotels and hotel rooms
is visible through the pipeline, and our pipeline reflects the
sustainability of our leadership position.
In 2010, we opened 35,744 rooms in 29 countries, and signed a
further 55,598 into our pipeline across 38 countries. We currently
have 204,859 rooms in 1,275 hotels under development in
64 countries.
Our pipeline ensures sustainable development in new and
emerging markets that best suit our strengths and anticipate the
future needs of customers. We have committed development teams
ensuring a sizable pipeline in developing markets: during 2010 we
opened 7,253 rooms in Greater China, representing 20% of all new
rooms opened by IHG across the globe during 2010.
Our pipeline is the largest branded hotel pipeline in the world,
representing 18% of all hotels under development, including
those that are independent or unaffiliated.
Franchised
Managed
Owned and leased
IHG continuing operating profit* by
ownership type for the year ended
31 December 2010
* Before regional and central overheads,
exceptional items, interest and tax.
Franchised
Managed
Owned and leased
IHG global room count by ownership
type at 31 December 2010