Holiday Inn 2014 Annual Report Download - page 20

Highest
opportunity segments
Why we think this is important
Typically, the traditional hotel industry
is segmented according to price point,
and IHG is focused on the three segments
that generate over 66 per cent* of branded
hotels revenue – namely, midscale, upscale
and luxury. We believe these segments
have the highest growth opportunity
and strongest resilience to the industry/
economic cycle. However, we also recognise
that guests choose a hotel based on their
needs and the occasion, resulting in the
possibility of the same guest staying
across multiple hotel segments.
What we are doing
Our portfolio of brands is targeted
around differing occasion segments.
We tailor each of our brands to meet
guests’ needs, looking at the differing
occasion they are travelling for and
their need for travelling.
We used this segmentation analysis
to develop the brand proposition for
both the HUALUXE Hotels and Resorts
and EVEN Hotels brands (see page 20). It
was also a consideration in the acquisition
of Kimpton Hotels & Restaurants (see page
21).
Attractive
markets
Why we think this is important
Achieving scale and driving growth
requires us to focus on those markets
that are most attractive and where there is
the best fit with our strategy and business
model. These markets have large inbound
and domestic demand for branded hotels
or show great potential to have this in
the future.
What we are doing
Whilst we operate in nearly 100 countries
and territories and continue to expand our
presence globally, we primarily focus our
efforts on 10 priority markets in which we
either have a strong existing competitive
position or have a compelling opportunity
to build one. These include a number of key
emerging and more developed markets
– US, Middle East, Germany, UK, Canada,
Greater China, India, Russia and the
Commonwealth of Independent States,
Mexico and Indonesia. These currently
represent 85 per cent of the IHG System
and 89 per cent of the pipeline. We focus
our brand building efforts and prioritise
the investment in infrastructure in these
markets, for instance, by adapting our
websites to the local language and
deploying dedicated sales teams.
Depending on the market, we will adapt
our model and proposition to owners
to take into account local market
characteristics.
The Performance section provides details
of how we have performed in each of our
regions and priority markets.
How we measure it
KPIs – Guest HeartBeat, RevPAR
How we measure it
KPIs – Net rooms supply, Total gross
revenue
Our Targeted Portfolio means we operate in the most attractive
markets for IHG and in the highest opportunity segments based
on guests’ occasion needs, with an asset-light business model –
franchising and managing hotels rather than owning them.
Key performance indicators (KPIs)
and What we have done in 2014
See pages 30 to 33
How we manage principal risks
See pages 28 and 29
Where we operate and detailed global
and regional Performance
See pages 34 to 51
Managed and franchised model (our
asset-light business model)
See pages 12 and 13
Holiday Inn Manhattan – Financial District, New York, US
*Source: Smith Travel Research.
18
IHG Annual Report and Form 20-F 2014
Targeted Portfolio