About us

There are over 3,800 hotels operating under IHG brands which are franchised.

Franchisees want to be in business for themselves but not by themselves. Ownership of a franchise can bring considerable benefits – franchisees can brand their hotel with one of our well-known and popular brands, while the franchise contract provides a powerful set of tools to drive new business.

• Connection to the IHG reservations system which is supported by web, call centres and GDS (travel agent booking system). By the end of 2009, 68% of rooms revenue was booked through IHG's channels or by Priotity Club Rewards members direct to hotel, compared with 64% in 2008.
• Participation in Priority Club Rewards, which has 52 million members worldwide.
• A proprietary operating manual setting out required and suggested operating specifications, standards and procedures.
• Property Improvement Plan (PIP) detailing actions a franchisee needs to take to bring their hotel up to mandatory brand standards.
• Franchisee-funded brand marketing programme.

Other services available to franchisees include training programmes, a consultation and advice service and optional marketing programmes.

This following is a diagram of the Franchise Revenue Business Model

Rooms

RevPAR

Royalty Fees

Drivers
Net System Growth
Market Share

Drivers
Relative Brand Premia

Drivers
Price/Return
Relationship with owner

IHG franchise revenue has three levers to drive future growth. Some of the factors that influence these levers are under our direct control, like rooms' growth, and others are influenced by market forces, such as the performance of our brands relative to competitors' brands.

The franchise contract is generally a standard contract, with some variation across the world. A sample contract would have a royalty fee of 5% of rooms' revenue. However this also varies across brands and countries.