Holiday Inn 2014 Annual Report Download - page 48

IHG’s 2015 regional priorities
1. Further increase IHG System size, with deeper penetration in
tier 2 and 3 cities and strengthen the distribution of the Holiday
Inn and Holiday Inn Express brands to capture the growing
midscale segment opportunity.
2. Build a strong pipeline for the HUALUXE Hotels and Resorts
brand and support the subsequent hotel openings.
3. Continue to grow our talent and build a strong local talent
pipeline, particularly in tier 2 and 3 cities.
Maximise scale and strength and establish
multi-segment local operating expertise to drive
margin and expand our strong portfolio of brands
over the next three years.
Greater China
Greater China comparable RevPAR
movement on previous year 12 months ended
31December2014
Managed
All brands 1.3%
Owned and leased
InterContinental (1.0)%
Industry performance in 2014
The Chinese economy achieved GDP growth of 7.4% in 2014, a
slowdown against the average of 8.9% growth in the period from
2009 to 2013. This slowdown was attributable to several factors,
including lessening domestic demand and manufacturing output,
a correction in the real estate market and declining inflation.
Growth is expected to reduce further in 2015 and 2016.
Hotel industry RevPAR in Greater China decreased by 0.9% in the
year. Whilst overall occupancy increased by 1.9%, average daily
Progress against 2014 regional priorities
In line with our 2014 regional priorities, we:
IHG’s regional performance in 2014
IHG’s comparable RevPAR increased 1.6% in 2014, significantly
ahead of the overall industry. Trading was strongest in tier 1 cities,
whilst tier 2 and 3 cities were softer, impacted by new supply as
these markets develop. Our RevPAR growth was driven by
occupancy which increased by 2.4%, whilst rate decreased by 2.3%
– both ahead of the industry, reflecting our scale and management
strength in the region.
rates decreased by 2.8%. Much of this decrease in the region is due
to changes in the industry structure due to growth in tier 2 and 3
cities as well as from growth of economy brands.
RevPAR in the People’s Republic of China (excluding Taiwan)
decreased by 1.5%. Many major cities, such as Shanghai and
Guangzhou, experienced an increase in RevPAR driven by strong
occupancy gains. However, RevPAR in Beijing and surrounding
North China, East China and South China saw a decrease in
year-on-year RevPAR growth.
• grew distribution of our brands in the region with 34 hotel
openings and 64 hotels signed into our pipeline;
• opened 19 hotels during the year for the Holiday Inn brand family
(Holiday Inn and Holiday Inn Express), including the opening of
the 50th Holiday Inn Express hotel, and signed a further 45 hotels
into the pipeline for the Holiday Inn brand family;
• continued to make progress with the HUALUXE Hotels and
Resorts brand, with 24 hotels in the pipeline as at 31 December
2014 – one of which we opened in February 2015 (see page 19);
• continued to grow our talent (see page 23); and
• continued to localise IHG brands, systems, tools, processes
and responsible business practices to increase efficiency and
margin performance (see progress against KPIs set out on
pages 30 to 33).
Source: Smith Travel Research for all of the above industry facts.
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IHG Annual Report and Form 20-F 2014
Performance continued