Investors

Our strategy is to build the hotel industry’s strongest operating system, focused on the biggest markets and segments where scale really counts.

Our business model focuses on managing and franchising hotels. We want to grow faster by making our brands the first choice for both guests and hotel owners.

Goal

We want to grow faster by making our brands the first choice for both guests and hotel owners.

Operating a management and franchise business means managing brands through owners. We must consider owners' needs as well as those of guests.

Third-party owners are important partners in our business. They have always been a valued part of IHG but our move away from owning property outright means that they are now more important than ever.

Target

Room count, ‘000 rooms 2001 – 2008

Our aim was to increase the number of rooms we have by around 50,000 on a net and organic basis by the end of 2008. We achieved this by June 2008 and by the end of 2008 had reached 82,000.

Net growth means growth due to the difference between the number of new rooms we add to our system and the number that leave it. Most of the rooms that leave our system do so at our instigation as we raise the quality of our hotels across all of our brands. Organic growth refers to achieving our target with our existing brands, not through acquisitions.

Strategy

Our strategy is to build the hotel industry’s strongest operating system, focused on the biggest markets and segments where scale really counts.

We have nearly 4,400 hotels providing around 180 million room nights annually and see opportunities across all market segments as well as the large unbranded portion of the global hotel industry. Twelve countries account for 2/3^rds of the world market by rooms; IHG has significant scale in most of them.

IHG’s operating system is made up of all the things we do to drive demand for our brands. This includes our advertising and marketing campaigns, our 12 global call centres, 13 local language websites, an 8,000-strong sales force, Priority Club Rewards – the world’s largest hotel loyalty scheme – and all the advantages that IHG’s global hotel distribution and scale brings to brand awareness.

Priorities

Improving the performance of our brands

• Using our insight to make our brands the first choice for guests
• Delivering consistent customer experiences

Generating excellent returns from our hotels

• Improving hotel revenue by encouraging guest visits
• Improving the efficiency of our hotels and operating processes

Putting our market scale and knowledge to good use

• Using our worldwide scale and experience to convert more hotels to our brands
• Making the most of our global presence – guests choose brands they know when they travel

Strengthening our organisation

• Investing in our people and our ability to do business
• Building strong partnerships within our own company and with our owners across the world

Strategy in action

During 2004 the head of Asia Pacific persuaded one of the key hotel owners in Malaysia to convert a hotel in Kuala Lumpur to a Crowne Plaza.

Once the hotel entered the IHG operating system, its performance improved markedly. As a result, the owner asked us to take on the branding and management of another hotel in the city. This opened late in 2005 as a Holiday Inn Resort.

We are now working on two additional properties with the same owner – the InterContinental Penang, which opened in 2006, and the InterContinental Hanoi, which opened in 2007.

Four properties, three brands, two countries – all coming from our ability to develop a good relationship with an owner and use our system to meet his needs.