Corporate Responsibility Report
Business overview and strategy
IHG is a global hotel business with nine preferred brands. With over 4,600 hotels and nearly 676,000 rooms in almost 100 countries and territories around the world, we know hospitality. Our vision is to become one of the world's great companies by creating Great Hotels Guests Love. We will deliver this through our portfolio of preferred brands, our talented people and best-in-class delivery systems. At the heart of our culture is a commitment to act responsibly in everything we do.
Our strategy has two areas of focus: where we compete; and how we win. These underpin the choices we make to balance the quality of IHG branded hotels and the speed at which we grow.
|With a portfolio of preferred Brands in the most attractive markets, our talented People are focused on delivering Great Hotels Guests Love and executing a clear set or priorities to achieve our Vision of becoming one of the great companies in the world...|
|Where we compete||How we win|
|Relevant consumer segments||Portfolio of preferred Brands|
|Most attractive markets||Talented People|
|Appropriate business model||Best-in-class Delivery|
Where we compete
We operate hotels in the geographical markets and consumer segments that are most relevant to our business and most attractive in terms of growth potential and operational efficiencies.
Our business model is focused on franchising and managing hotels, rather than owning them, enabling us to grow faster with limited capital investment. We call this ‘asset-light’ – it allows us to focus on building strong delivery systems such as our branded hotel websites and call centres, creating greater returns for owners.
|Brand ownership||Marketing and distribution||Staff||Hotel ownership||IHG capital||IHG income|
This is the largest part of our business: 3,934 hotels operate under franchise agreements
|IHG||IHG||Third-party||Third-party||None||Fee % of rooms revenue|
We manage 658 hotels worldwide
|IHG||IHG||IHG usually supplies General Manager as a minimum||Third-party||Low/none||Fee % of total revenue plus % of profit|
|Owned and leased
We own 10 hotels worldwide (less than 1% of our portfolio)
|IHG||IHG||IHG||IHG||High||All revenues and profits|
|IHG global hotel count by ownership type at 31 December 2012|
|IHG continuing operating profit* by ownership type for the year ended 31 December 2012|
* Before regional and central overheads and exceptional items
How we win
Winning with a portfolio of preferred brands:
We aim to build a portfolio of brands that are bigger, better, and stronger.
To ensure our brands remain competitive, contemporary and relevant we analyse our guests' reasons for booking hotels and their needs when they travel. We use this analysis to develop our brand propositions – most recently our two new brands, EVEN Hotels launched in February 2012 and HUALUXE Hotels & Resorts launched in March 2012.
As of 31st December 2012, IHG's portfolio comprised the following nine brands:
*Holiday Inn brand family comprises Holiday Inn, Holiday Inn Club Vacations, Holiday Inn Resort and Holiday Inn Express, and is the world's largest midscale hotel brand by number of rooms at 31st December 2012. It is the largest brand in IHG's portfolio, predominantly operating under franchise agreements in The Americas and Europe and management agreements elsewhere.
Winning with our talented people:
Our brands are brought to life by our talented and passionate people. In order to deliver on our brand promises we must attract, retain and develop the very best talent in the industry.
Being the first hotel company to be trusted to run the London 2012 Olympic and Paralympic Villages was a ground-breaking opportunity for IHG, and gave our people the opportunity to benefit from new skills and experiences.
Winning with our best-in-class delivery:
We use our global size and scale and the power of our systems to drive guests to our hotels by providing booking channels that meet their needs while providing the most profitable returns for our hotels. Our channels and loyalty programme, Priority Club Rewards, is the engine of our business. On average, 69% of total global rooms revenue came through this channel in 2012.
4,602 hotels 157 million room nights annually
Nine preferred hotel brands
|Priority Club Rewards
71.4 million members, contributing over $7.2 billion to global system rooms revenue
13 language sites
six language apps
room revenue delivery
|Food and beverage
Over $4.7 billion of food and beverage revenue and over 4,500 outlets worldwide
10 call centres
In nearly 100 countries and territories
17,600 sales professionals 2,020 accounts
Annual fund totalling $1.2 billion to maintain marketing and systems that generate demand for our hotels
Thanks to the high returns generated through our revenue delivery systems we have built strong relationships with our owners. We regularly meet with the IHG Owners Association to facilitate the continued development of our brands and systems.
Winning with responsible business practices:
With over 4,600 hotels in nearly 100 countries and territories around the world, our commitment to being a responsible business is central to our vision of being one of the great companies of the world.
This report sets out the thinking behind our approach to being a responsible business, the value it creates for IHG and all our shareholders and stakeholders, and the central role CR plays in guiding every part of our business.
For more detailed information about our business model and strategy, see our Annual Report and Financial Statements 2012 PDF (10.6MB).