View from Hotel Indigo shanghai on the Bund, china
Where we compete
We operate 4,602 hotels and 675,982 rooms in nearly 100 countries and territories around the world. Our business reflects the profile of our major markets and is structured into four operating regions: The Americas; Europe; Asia, Middle East and Africa; and Greater China.
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Responsible Business and Where we compete 37
Performance highlights
Revenueperavailableroom(RevPAR)up6.1%
Revenueup0.8%to$837m†
Operatingprofit*up7.8%to$486m†
†Includesonesignificantliquidateddamagesreceiptin2012of$3m.
*Beforeexceptionalitems.
Number of rooms by business model
Franchised407,849
Managed39,583
Owned&leased2,185
Room and hotel numbers
Totalroomsopen449,617
Roomsinpipeline72,573
Totalhotelsopen3,555
Hotelsinpipeline670
A vital regionThisyearwehaveopened148hotelsinTheAmericasregionandincreasedourRevPARby6.1percentwiththeUSoutperformingtheindustry.TheUSaloneaccountsformorethanaquarterofglobalhotelspendingandoverthenextdecade,willcontinuetobeasignificantgrowthmarketforIHG.
EVENTM HotelsInFebruary,welaunchedournewEVENHotelsbrandandinOctober,wesignedthefirsthotelunderthebrand–anewbuildinNewYorkCity.Itisthefirsthotelbrandinthelifestylespacethatismainstreamandaimedathelpinghealthy-mindedguestsstaybalancedwhiletravelling.Asthewellnesssectorcontinuestogrow,sotoodoestheneedforthebrand.
Extended stayExtendedstayhotelsareabigsegmentinNorthAmerica–whereweopened22newhotels.HospitalityPropertiesTrust,anowner,committed$165milliontorenovate80StaybridgeSuitesandCandlewoodSuiteshotelswithdesignandfunctionalityimprovements.
Focussed expansionIHGisthelargesthotelcompanyinMexico,with121hotelsand38inthepipeline.ThisyearweopenedthePresidenteInterContinentalSantaFeMexicoandtheHotelIndigobrand’sonlypropertyinMexico–HotelIndigoVeracruz
BocadelRio.WeremainapreferredemployerinCanadawhereourrobustpipelineof33hotelswillcreateevenmoreneedfortoptalent.Withthegrowthofthemiddleclassthroughouttheregion,wehavealsoseenactivedevelopmentinLatinAmericaandtheCaribbeanacrosstheHolidayInnfamilyofbrandswithopeningsorsigningsinBrazil,ColombiaandGrandCayman.
Army hotelsOurArmyhotelsportfoliocontinuestotakeshapeaspartoftheUSgovernment'sPrivatizationofArmyLodgingsinitiative.FormerArmy-runpropertiesintheUSandPuertoRicowererenovatedduringtheyear.Thenumberofhotelswillcontinuetogrowin2013,reachingabout80hotelsand12,000roomsonArmyinstallations.
IHG Shelter in a Storm ProgrammeWhenHurricaneSandydevastatedtheEastCoastinOctober,wepartneredwiththeIHGOwnersAssociationtoraisemoneythroughemployees,ownersandPriorityClubRewardsmembersanddonationswenttotheIHGShelterFund(partoftheIHGShelterinaStormProgramme).Over$100,000wasallocatedfromtheIHGShelterFundtoprovidetemporaryshelterandemergencysuppliestoaffectedemployeesandthecommunity.
“In 2013, IHG launched the EVEN Hotels brand in the US, within a month of launching HUALUXE – an entirely different hotel brand in an entirely different market. This tells you something about our ambition as a company and the ability of our People to deliver.”
Kirk Kinsell President, The Americas
The Americas
The Americas accounts for more than a third of global hotel spending and represents two-thirds of IHG’s hotel rooms. Over the next decade, The Americas will continue to be a significant growth market for the hotel industry and we are a key player.
HotelIndigoVeracruzBocaDelRio,Mexico
38 IHG Annual Review and Summary Financial Statement 2012
Performance highlights
Revenueperavailableroom(RevPAR)up1.7%
Revenueup7.7%to$436m
Operatingprofit*up10.6%to$115m
*Beforeexceptionalitems.
Number of rooms by business model
Franchised79,899
Managed21,211
Owned&leased917
Room and hotel numbers
Totalroomsopen102,027
Roomsinpipeline15,184
Totalhotelsopen628
Hotelsinpipeline91
2012hasbeenanexcellentyearforEuropeinspiteofthetoughmacroeconomicclimate.Weopened39hotelsandsignedanother48.
Priority markets
TheUKcontinuestobeourbiggestmarketwhereweexceededthenumberofsigningsfromlastyearandalsoopenedourfirstnewInterContinentalHotelinLondonforover36years–InterContinentalLondon-Westminster.
InGermany,whereourstrategyfordevelopmenthasfocussedonpartneringwithownerswhocanunlockmultipledeals,wesignedsevenindividualhoteldealsandonenewmultipledevelopmentagreement.
Inadditiontothelarger,scalemarkets,weareactivelygrowinginRussiaandtheCommonwealthofIndependentStates(CIS).Ourextensivelocalresearchhashighlightedasignificantopportunityinthemidscalesegmentandamongstbusinesstravellers.ThisisaneedthatHolidayInnandHolidayInnExpressareperfectlysetuptomeet.
Ourlong-termgoalistogrowourestateinRussiaandtheCIStoover100hotels.Someofthehighlightsin2012werethelaunchofaRussianlanguagewebsiteandtheopeningofanIHGAcademyinMoscowtosupportthetraininganddevelopmentoflocaltalent.
Hotel Indigo
Wecontinuetodriveexcellentprogresswithourbrandedboutiqueoffer,HotelIndigo.TheneighbourhoodstoryconceptattheheartofthebrandfitswellintoEuropeancities,whichcanalsoprovideamplepropertiesforconversion.SinceintroducingthebrandtoEuropein2008,we’veopened10hotels,eightintheUKandtwoinGermany,andtherearenow13inthepipeline.TheseincludetherecentsigningofHotelIndigoBarcelona-PlazaCatalunyaandourfirstHotelIndigopropertyinIsrael,whichwillopeninTelAvivin2013.
Olympic sponsorship
HolidayInnwastheofficialhotelprovidertotheLondon2012OlympicandParalympicGames,andhelpedhostathletesattheOlympicVillage,somethingfromwhichallofIHGdrewenormouspride.
PartofthelegacyoftheGamesarethetwonewIHGhotelsneartotheOlympicsite–HolidayInnLondon-StratfordCityandStaybridgeSuitesLondon-StratfordCity,London’sfirstStaybridgeSuitesproperty.Thesecreated120permanentjobs,andarealsosupportinganewIHGAcademyinthelocalboroughofNewhamthatwilltrainaround50participantsayear.
“IHG is winning in Europe. My definition of winning is to be the preferred choice for guests, the preferred choice for investors, and the preferred choice for our employees.”
Angela Brav Chief Executive, Europe
Europe
Our strategy in Europe is to achieve high-quality growth by focussing on key cities across Europe, and building national scale in priority markets. In these markets, we want to be in a leadership position.
OlympicandParalympicmarathonstarsPaulaRadcliffeandShellyWoodshostatrainingsessionforHolidayInnguestsaspartoftheLondon2012sponsorshipprogramme
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The Americas and Europe 39
Performance highlights
Revenueperavailableroom(RevPAR)up4.9%
Revenueup0.9%to$218m
Operatingprofit*up4.8%to$88m
*Beforeexceptionalitems.
Number of rooms by business model
Franchised10,860
Managed51,290
Owned&leased587
Room and hotel numbers
Totalroomsopen62,737
Roomsinpipeline30,357
Totalhotelsopen232
Hotelsinpipeline132
WeendedtheyearstronglywithRevPARgrowthof4.9percentandanactivepipelineof132hotelswith36newsigningsin2012.WealsoexceededourtargetfortheIHGAcademyprogramme,with59IHGAcademyprogrammesacrosstheregionreadytoprovideskillsdevelopmentandimproveemploymentprospects.
Seizing opportunities AMEAisIHG’smostgeographicallydiverseregion.Weoperate232hotelsinover37countries,coveringamixofmatureandemergingmarkets,resortsandurbanlocations.Theregionisalsohometosomeofthemostimportanttourismmarketsofthefuture.Indiaisonesuchmarket,with850milliondomestictripsmadeannually,andrapidlyincreasinginboundandoutboundnumbers.In2012,weopenedthefirstHolidayInnExpressinIndia,tomeettheuntappeddemandforatrustedglobalbrandthatcaterstothemid-marketsegment.WealsolaunchedHolidayInnExpressinSoutheastAsiatopositiveownerandindustryfeedback.Wenowhave35HolidayInnExpresshotelsunderdevelopment,whichrepresentsaquarteroftheregion’scurrentpipeline.
Winning in resorts Thisyearweopenedseveralbrand-definingresorts,includingInterContinentalDanangSunPeninsulaResortinVietnam,InterContinentalSamuiBaanTalingNgamResortinThailandandtheCrownePlazaJordanDeadSeaResort&SpainJordan.
Someofthesenewresortshavealreadyreceivedgreatindustryandguestrecognition–astrongindicationofthe‘haloeffect’aresortcanbringtoabrand.Giventhereisnoclearleaderinthissought-afterbutfragmentedsegment,wehaveanincredibleopportunity,particularlyforInterContinentalHotels&ResortsandHolidayInn.In2012,weestablishedadedicatedteaminBangkoktodevelopIHG’sresortsstrategy.Ourgoalistobecometheregion’spreferredresortsoperator.GlobalmanagementoftheInterContinentalHotels&ResortsbrandhasalsomovedtoBangkok.WithmorethanathirdoftheInterContinentalHotels&ResortspipelineinAMEA,itgivesourownersconfidencetoseethebrandleadershipbasedintheregion.
Winning in food and beverageAround$1.5billion,35percent,ofAMEA’sgrossrevenuein2012wasfromourfoodandbeverageoperations,representingthelargestamountofanyregionwithinIHG.Withmorethan700restaurantsandbarsinAMEA,foodandbeverageisasizeablebusinessthatcandefineanddrivepreferenceforourBrandsevenfurther.FoodandbeverageisanotherstrandofIHG’sglobalstrategybeingdevelopedinAMEAalongwithglobalresorts.ThiswillestablishtheneedsforeachIHGbrandgloballyanddevelopspecificcareerpathsforourPeople.
“AMEA has some of the world’s most compelling travel destinations, robust business hubs and an incredible energy that comes from our geographical and cultural diversity. We have a great opportunity for AMEA to lead IHG in resorts and food and beverage excellence.”
Jan Smits Chief Executive Officer, Asia, Middle East and Africa
Asia, Middle East and Africa (AMEA)
We are growing our Brands and our People in an exciting region. Strong economies, growing incomes and the rapid rise of the middle class are some of the long-term factors underpinning the success of AMEA.
InterContinentalSamuiBaanTalingNgamResort,Thailand
40 IHG Annual Review and Summary Financial Statement 2012
Performance highlights
Revenueperavailableroom(RevPAR)up5.4%
Revenueup12.2%to$230m
Operatingprofit*up20.9%to$81m
*Beforeexceptionalitems.
Number of rooms by business model
Franchised2,184
Managed58,914
Owned&leased503
Room and hotel numbers
Totalroomsopen61,601
Roomsinpipeline50,916
Totalhotelsopen187
Hotelsinpipeline160
Strong RevPAR growth
Overallin2012RevPARincreasedby5.4percentincludingrategrowthof3.1percent.Whilesomeexplainableslowdownwasseenthisyear,we’restilloutperformingthemarketintheregionwithmorethan180hotelsacross60cities.
Launch of HuALuxE™ Hotels & Resorts
InMarch2012,welaunchedHUALUXEHotels&Resorts–thefirstinternationalupscalehotelbranddesignedspecificallyforChineseguests.
NootherinternationalhotelgrouphasanofferlikeHUALUXEHotels&Resorts,andevensuccessfullocalbrandsarenotabletoprovidethescaleorsupportofIHG.Wesigned15contractsforthebrandin2012.
Thisuniquebrandcouldbeinmorethan100Chinesecitiesoverthenext15-20years.
Continued growth
CrownePlazaisoneofthefastestgrowingIHGbrandsinGreaterChina.Itisalsotheregion’slargestupscaleinternationalhotelbrand.WeopenedeightnewCrownePlazahotelsthisyear,andnowhave60,with52hotelsinthepipeline,whichismorethanhalfofthebrand'sentireglobalpipeline.
WealsoopenedoursecondandthirdHotelIndigoproperties–inthecoastalcityofXiamenandinTianjin,thecommercialhubofNorthChina.
Bytheendof2012,wehadmorethan110,000roomsopenorinthepipeline–anincreaseof7.2percentoverthepreviousyear.
Investing in People
Wecurrentlyhavemorethan50,000employeesacrossourestate,almostallofthemChinese,andwillbecreatingaround30,000newjobsoverthenextfewyears.ThiswillrequiresignificantinvestmentindevelopingourPeople,asthesinglebiggestoperationalchallengeinChinaisobtainingthebesttalent.
Butwith25IHGAcademyprogrammesinGreaterChina,ourcollaborationwithlocaleducationprovidersand/orcommunityorganisationswillgiveparticipantstheopportunitytodevelopskillsandimprovetheiremploymentprospects,creatingapipelineofpotentialrecruitsandfuturetalentforIHGandtheindustry.
“It has been a great year for IHG in China. We are the largest international hotel operator in Greater China with more rooms under development than any competitor. Our RevPAR continues to outperform the market due to the strength of our systems and preference for our Brands.”
Keith Barr Chief Executive, Greater China
Greater China
Greater China has been a standalone business within IHG for the past three years. In that time we have successfully focused on strengthening our Brands, driving strong operating results and implementing a robust People strategy.
CrownePlazaHongKongKowloonEast
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Asia, Middle East and Africa and Greater China 41