Corporate responsibility home

Our core purpose is to create “Great Hotels Guests Love” and between our seven hotel brands, we have over 4,000 hotels (as of 31 December 2008) comprising more than 619,851 rooms across nearly 100 countries.

IHG directly employed an average of 8,334 people worldwide during 2008 whose costs are borne by the Group. When the whole IHG estate is taken into account (including staff working in the managed and franchised hotels) approximately 330,000 people are employed globally across IHG’s brands. Unless otherwise stated any data in this section relates to the people directly employed by IHG and those who work in managed hotels or as part of our joint venture with AII Nippon Airways (ANA) in Japan – in total approximately 110,000 people.

Priority Club Rewards (PCR) has celebrated its 25th anniversary, welcomed its 40 millionth member and retained its position as the world’s largest hotel loyalty programme.

Our global headquarters is in Denham, United Kingdom.

Our hotel ownership model

IHG’s future growth will be achieved predominantly through managing and franchising rather than owning hotels. Approximately 614,000 rooms operating under Group brands are managed or franchised and 5,600 are owned and leased. The managed and franchised fee-based model is attractive because it enables the Group to achieve its goals with limited capital investment at an accelerated pace. A further advantage is the reduced volatility of the fee-based income stream, compared with ownership of assets. A key characteristic of the managed and franchised business is that it generates more cash than is required for investment in the business, with a high return on capital employed. Currently 85% of continuing earnings before regional and central overheads, exceptional items, interest and tax is derived from managed and franchised operations.

As of 31 December 2008 we have 3,585 hotels operating under franchise agreements, which represents nearly 86 per cent of the estate. Franchising enables owners to trade under one of our brands, leverage our scale and take advantage of our reservations systems such as our call centres, sales teams, websites and Priority Club Rewards. Owners also have our support in, and access to, property improvement plans, quality training and marketing support.

We have 585 hotels operating under management contracts, representing almost 14 per cent of the estate. Under a managed contract we run the hotels on a day-to-day basis with direct control over quality and service standards, but ownership of the buildings remains with a third-party owner.

Today we own just 16 hotels of the 4,186 operating under one of our brands – less than 1 per cent of the estate. These hotels have a net book value of approximately US$1.7 billion, the majority of which is represented by our InterContinental hotels in London, Hong Kong, New York and Paris. Since 2003 we’ve sold 183 hotels and have retained our brands on 90 per cent of these, giving us a continuing income stream.

For more information on our business model and economic strategy please see the section on Our Economic Performance and Impact.

Of our three operating regions the Americas is the biggest with a total of 3,260 hotel rooms.

For the full breakdown of the number of hotels by brand in each of the three regions in 2008 please refer to the IHG Annual Report and Financial Statements 2008.