Holiday Inn 2010 Annual Report Download - page 13

Business review 11
OVERVIEW BUSINESS REVIEW
THE BOARD,
SENIOR MANAGEMENT AND
THEIR RESPONSIBILITIES
GROUP FINANCIAL
STATEMENTS
PARENT COMPANY
FINANCIAL STATEMENTS USEFUL INFORMATION
• Staybridge Suites and Candlewood Suites are IHG’s extended
stay brands, offering studios and suites complete with full kitchens
and separate sleeping and work areas, for guests on longer trips.
Staybridge Suites is our upscale extended stay brand, offering
a sociable, family-like atmosphere. It was the fastest upper-tier
extended stay brand to reach the 50-hotel and 100-hotel
milestones, and was ranked highest in the prestigious J.D.
Power and Associates’ 2009 North America Hotel Guest
Satisfaction Index Study for extended stay hotels. In 2008,
Staybridge Suites opened its first EMEA hotel in Liverpool, and
has since opened properties in Cairo, Abu Dhabi and Newcastle.
Candlewood Suites is our midscale extended stay brand that
gives its guests all the essentials they need for a home-like stay
at great value. Shortly after being acquired by IHG in 2003,
Candlewood Suites won J.D. Power’s award for highest
extended stay guest satisfaction in North America in 2004
whilst also ranking first in the Market Metrix Hospitality Index
survey for customer satisfaction. Candlewood Suites continues
to lead the way in midscale extended stay lodging, with the most
properties under development.
These brands tend to be a mixture of franchise and
management agreements.
Winning with our scale and expertise
The major benefit IHG brings to guests who stay with us, and
owners who invest with us, is our system to help guests book and
stay with us, and then maintain the relationship with them after they
leave. This includes having hotels in key locations, great brands
with consumer appeal, efficient reservations systems, global web
presence, our loyalty rewards schemes, along with other elements.
Together, these form the largest such ‘system’ in the industry and
are the engine of our business, delivering on average, 68% of total
rooms revenue.
With continued focus on the success of this global system, we have
developed best-in-class marketing and technology to support our
hotels and drive incremental revenues. From the ‘Stay You’ campaign
for the Holiday Inn relaunch to sophisticated technology allowing
for highly targeted marketing and communications, to market-
leading brand websites and innovative booking technologies, we
are well on our way to strengthening our leading delivery systems.
Our focus on key geographical markets where we operate a large
number of hotels, such as the US, UK, China, Middle East and
Germany, means we can run hotels and our operating system with
greater efficiencies, delivering more to the consumer at a lower cost.
The size of the global hotel market is estimated to be close to
20m rooms. This has grown at approximately 2% per annum
over the past five years. However, new rooms growth reached
its peak during 2009 as it caught up with the economic cycle.
Competitors in the market include other branded hotel companies,
both large and small, international and domestic, and independently
owned hotels.
We remain the largest branded hotel company, with our share
currently at approximately 10% of the branded rooms, and a
presence in 100 countries and territories. Leading research
(Smith Travel Research) calculates that there are 6.6m branded
hotel rooms, with the remainder a combination of independent
hotels, guesthouses and other types of lodging.
Although currently less than half of all hotel rooms are branded,
the benefits of being part of a brand are clear to many owners – the
growth of branded rooms has exceeded the growth of unbranded
over the last 10 years.
Raising finance is still an issue globally, and branded hotels are
perceived as offering greater security through global reservations
systems, loyalty schemes and international networks. Branded hotel
companies, such as IHG, are attractive to independent hotel owners
and are therefore gaining market share at the expense of the
unbranded portion of the industry. IHG is well positioned to benefit
from this trend.
Hotel owners are increasingly recognising the benefits of franchising
or managing with IHG, which can offer a portfolio of brands to suit the
different real estate opportunities an owner may have, together with
effective revenue delivery through global reservations channels.
Furthermore, hotel ownership is increasingly being separated from
hotel operations, encouraging hotel owners to use third parties, such
as IHG, to manage their hotels.
Winning with our people and values
Our Vision can only be realised if we have collaborative and
engaged employees, delivering the right experience to our guests
through shared values and living our brands. We have extensive
on-boarding, communication, development and recognition
programmes, aligned under our employment brand, ‘Room to
be yourself’, providing the right environment for our people to
be successful.
Our people dictate our culture, and IHG is aligned around great
values which are consistently brought to life through a set of five
IHG behaviours, the ‘Winning Ways’:
• do the right thing;
• show we care;
• aim higher;
• celebrate difference; and
• work better together.
See pages 24 to 27 for more information.
IHG’s system
delivers
68%
of total rooms
revenue
System Fund
Annual fund
totalling
$1.1bn
Loyalty
programme
Priority Club
Rewards, the
largest in the
industry, with
56 million
members
Web presence
11 local language
websites and one
of the most active
in industry on
the web
Sales force
Global
sales team
of more
than 8,000
Market
coverage
Leadership
positions in
15 of the 20 largest
hotel markets,
more than any
other company
Reservations
systems
10 call centres
around the world,
covering 12
languages
Brand
portfolio
7 hotel brands
covering all major
segments
Scale
4,437 hotels.
Over 146 million
room nights
per annum