Share price

2299.00

-9.00p / -0.39%

Overview of IHG

Our commanding scale

  • 693,072 hotel rooms, or 4,732 hotels
  • 1,175 pipeline hotels
  • Less than 1% of hotels are owned or leased
  • Operating in nearly 100 countries around the world
  • Nine hotel brands – InterContinental, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites, Candlewood Suites, EVEN™ Hotels and HUALUXE™ Hotels and Resorts
  • 161m guest nights annually
  • Listed on the London and New York stock exchanges
  • $21.6bn of total gross revenue from hotels in IHG's system
  • Over 80m IHG Rewards Club members

Our hotel model

Our hotels typically operate under one of three different business models; owned, leased managed or franchised:

  • Owned / leased hotels are owned and operated by an owner who bears all the costs associated with the hotel but also benefits from all of the income;
  • In a managed hotel, the owner of a hotel will use a third-party manager to operate the hotel on its behalf and will pay the manager management fees and, if the hotel is operated under a third-party brand name, brand licensing fees; and
  • A franchised hotel is owned and operated by an owner under a third-party brand name and the owner will pay a brand licensing fee to the brand owner.
  Brand ownership Marketing and distribution Employees Hotel Ownership IHG Capital intensity IHG income
             
Franchised We operate 4,001 hotels under franchise agreements IHG IHG Third party Third party Low Fee % of rooms revenue
             
Managed We manage 722 hotels IHG IHG IHG & Third-party* Third party Low Fee % of total revenue plus % of profit
             
Owned and leased We own 9 hotels worldwide IHG IHG IHG IHG High All revenues and profits

Managed and franchised model

IHG's business model is focused on franchising and managing hotels, rather than owning them, enabling us to grow at an accelerated pace with limited capital investment.

A key characteristic of the franchised and managed business model is that it is highly cash generative, with a high return on capital employed. The asset-light approach means IHG benefits from the reduced volatility of fee-based income streams, as compared with the ownership of assets, resulting in a high-quality income stream. It enables us to focus on growing our fee revenues (Group revenue excluding owned and leased hotels, managed leases and significant liquidated damages) and fee margins (operating profit as a percentage of revenue, excluding revenue and operating profit from owned and leased hotels, managed leases and significant liquidated damages).

The System Fund

The System Fund is managed by IHG for the benefit of hotels in the IHG System with the objective of driving revenues for the hotels. Total income for the System Fund in 2013 was $1.35 billion (2012: $1.25 billion) and these funds are used to pay for marketing, the IHG Rewards Club loyalty programme and the global reservation system. The System Fund is planned to operate at break even and does not result in a profit or loss for IHG.

Last updated 05 August 2014

Find out more about our brands

IHG logo

  • InterContinental Hotel & Resort logo
  • Hualuxe Hotels and Resorts logo
  • Crowne Plaza logo
  • Hotel Indigo logo
  • Even Hotels logo
  • Holiday Inn logo
  • Holiday Inn Express logo
  • Holiday Inn Resort logo
  • Holiday Inn Club Vacations logo
  • Staybridge Suites logo
  • Candlewood Suites logo
  • Priority Club logo