Annual Review and Summary Financial Statement 2008

Europe, Middle East and Africa

“We’re a very diverse region, operating in many different cultures, languages and backgrounds. But our owners and employees all have a common goal to engage with IHG and create Great Hotels Guests Love.”

Kirk Kinsell
President, Europe, Middle East and Africa

Kirk Kinsell

With Hotel Indigo and Staybridge Suites making their debuts in the region and InterContinental signed up in two new countries, it's been a year of firsts. At the same time, explains Kirk Kinsell, it's also been a year of big numbers as the region's strong development pipeline kept openings going at a fast pace.

Market performance

Middle East: The Middle East is a fast-growing market where our brands enjoy a high level of awareness and we have landmark hotels. Our development strategy has been led by InterContinental and Holiday Inn, with continued growth in Crowne Plaza. We led the field in signings, with 20 in total this year and we opened the region’s first Staybridge Suites in Cairo, Egypt.

UK: The UK put in a solid performance across all our brands. We had a particularly great year for Crowne Plaza. We carried out a marketing campaign in Heathrow’s new Terminal 5, opened a Crowne Plaza in Manchester with a cutting-edge design and converted a Marriott Hotel at Liverpool Airport. We also opened a Staybridge Suites and a Hotel Indigo in the UK during the year (see stories, right).

Germany: Market research continues to show great opportunities in Germany for branded hotels, particularly for value-conscious customers, so we’re stepping up our investment there. We opened five Holiday Inn and Holiday Inn Express hotels during the year and intend to grow these brands in the future while looking for opportunities to introduce Staybridge Suites and Hotel Indigo.

Russia: We now have seven hotels open in Russia. Over the year we’ve signed five deals and opened another Holiday Inn. One key benefit of our market-leading position is that when Russians travel outside the country they often seek the reassurance of the brands they trust from home. The same is true of Middle Eastern travellers and we believe we’ll also see that trend in the German outbound market.

Opened and on the way

In 2008 we welcomed the first Staybridge Suites and Hotel Indigo to the UK

In the Middle East we now have two hotels in the Dubai Festival City complex. The InterContinental and Crowne Plaza were built and opened within three years and are both performing well. The InterContinental Residence Suites, which has also been built on the same site, will open in 2009.

Then, of course, there’s the Holiday Inn relaunch, which is progressing at pace. At the end of 2008 we had 42 hotels in the region show casing the relaunched brand and many more are under way. The early results are very positive.

Relationship with owners

We work directly with all our owners, whether they have one hotel or many, and enjoy strong working relationships. Working closely with the IAHI, our Owners’ Association, continues to be a focus for us, particularly around the relaunch of Holiday Inn. We’ve also been working closely with them to deal with the tough trading conditions that face us in 2009.

* Before exceptional items.

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Our stories

Flagship on fine form

Award-winning chef, Theo Randall, at the InterContinental London Park Lane, UK

Award-winning chef, Theo Randall, at the InterContinental London Park Lane, UK

The InterContinental London Park Lane is beating the competition in its first full year of trading since the completion of a £70 million refurbishment. The facelift was timely, as a number of other five-star hotels in London are now closed and undergoing the same process.

Theo Randall, chef at the hotel’s signature restaurant, has also received critical acclaim from the press and the country’s top restaurant critics. He won the Italian Restaurant of the Year at the London Restaurant Awards, beating the extensive culinary competition the city offers.

Double debut for InterContinental in the Middle East

Crowne Plaza and InterContinental, Festival City Complex, Dubai

Crowne Plaza and InterContinental, Festival City Complex, Dubai

Syria and Morocco are due to gain their first InterContinental hotels. The 392-room InterContinental Damascus in the centre of the Syrian capital will form part of the city’s only integrated development, which will include a shopping mall, cinema complex and office space. The hotel is due for completion in 2010. The first IHG property in Morocco will be the InterContinental Marrakech Resort & Spa, scheduled to open in 2011. With 297 rooms and suites and a large spa, guests have a great chance to unwind after a day in this bustling city.

All go in Saudi Arabia

InterContinental Al Khobar, Saudi Arabia

InterContinental Al Khobar, Saudi Arabia

We’ve opened our 21st hotel in the Kingdom of Saudi Arabia with 12 more Holiday Inn Express hotels coming soon.

The 120-bedroom InterContinental Al Khobar, situated a few minutes from the corniche in the heart of the city, opened in March. The 12 Holiday Inn Express hotels are due to open within the next five years after we signed an exclusive franchise development agreement with Siraj Capital Ltd.

This reinforces our commitment to the Kingdom as a vitally important destination for domestic and international travellers.

Staybridge comes to stay in Liverpool and Cairo

Opening ceremony, Staybridge Suites Cairo, Egypt

Opening ceremony, Staybridge Suites Cairo, Egypt

Staybridge Suites has made its debut outside the US, with the opening of hotels in Liverpool, UK and Cairo, Egypt. The Liverpool hotel soon took the city’s number one position for hotels on the TripAdvisor Popularity Index. The Cairo property is within the innovative CityStars retail complex, in which there are two other IHG hotels.

The Staybridge Suites brand is aimed at guests who usually stay for more than five nights and incorporates homely touches such as a fireplace and communal kitchen.

At the opening Andy Cosslett said: “There’s a growing type of traveller who is away from home for many days or even weeks at a time and would prefer their hotel to feel more like home. It’s this gap between conventional hotels and serviced apartments that Staybridge Suites has been designed to bridge.”

Staybridge Suites celebrated its 10th anniversary in December with 152 hotels open worldwide and a pipeline of 166 hotels. Agreements have been signed to open Staybridge Suites in two locations in Russia, a 176-room hotel in St Petersburg and a 78-bedroom hotel in Nizhny Novgorod, Russia’s third-largest city.

Waste slimmed at head office

Our new global headquarters in Denham, Buckinghamshire, UK is a real-life example of sustainable building design. More than 90 per cent of waste generated during construction was reused or recycled, saving almost 400 tonnes of debris from going to landfill. The building, which we moved into in August, also features energy-efficient lighting and low-flow plumbing.

During 2009, we will be opening a prototype of a ‘green hotel room’ in our marketing suite to act as a learning centre for our owners and general managers.

UK turns Indigo

The world's largest hanging basket which marked the
launch of Hotel Indigo London Paddington, UK

The world's largest hanging basket which marked the launch of Hotel Indigo London Paddington, UK

The first Hotel Indigo outside the Americas has opened in Paddington, London. The 64-bedroom hotel, which launched in December, incorporates architectural influences from nearby Paddington railway station, including murals of ornate metalwork.

This individuality of design is thanks to the ‘Interpret Indigo’ concept, which allows developers to adapt the hotel design to reflect the character of its location while maintaining the brand’s identity.

Hotel Indigo has enjoyed great success since it made its debut in the US in 2004, with 56 hotels now in the pipeline for this fast-growing brand. The hotels appeal to guests who seek more from their experiences – for instance, travellers who like to add leisure time to a business trip and guests who want to stay somewhere distinctive.

Performance highlights

  • Revenue per available room (RevPAR) up 3.6%
  • Continuing revenue up 5.3% to $518m
  • Continuing operating profit* up 27.6% to $171m