Corporate Responsibility Report
Business overview and strategy
IHG is a global hotel business with nine preferred brands. With almost 4,700 hotels and nearly 687,000 rooms in almost 100 countries and territories around the world, we know hospitality. Our focus is to deliver high quality growth. We deliver this through our targeted portfolio and delivering preferred brands, driven by a deep understanding of guests' needs.
Our business model
Our 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. We call this ‘asset light’. This business model allows us to focus on building preferred brands based on guests’ needs, and on strong delivery systems, such as our branded hotel websites and call centres.
|Brand ownership||Marketing and distribution||Staff||Hotel ownership||IHG capital||IHG income|
|*IHG often employs the General Managers only.|
We operate 3977 hotels under franchise agreements (84.67%)
|IHG||IHG||Third-party||Third-party||Low||Fee % of rooms revenue|
We manage 711 hotels (15.14%)
|IHG||IHG||IHG & Third-party*||Third-party||Low||Fee % of total revenue plus % of profit|
|Owned and leased
We own and lease 9 hotels (less than 1%)
|IHG||IHG||IHG||IHG||High||All revenues and profits|
We focus on delivering high-quality growth. We do this by staying focused on our Targeted Portfolio and building preferred brands, driven by a deep understanding of guests' needs. IHG’s Winning Model, combined with a Targeted portfolio underpinned by disciplined Execution will drive superior returns for IHG’s shareholders.
1. Preferred brands delivered through our people
Our portfolio of nine complementary, differentiated preferred brands are brought to life by our people who deliver on each of our brand promises.
2. Build and leverage scale
For each of our brands, we aim to deliver high-quality growth with scale positions in the most attractive geographic markets. In key cities in our priority markets, we aim to build scale through our market share in that location.
3. Strong brand portfolio loyalty programme
By building a strong brand portfolio and loyalty programme, IHG is able to offer an unparalleled choice for guests and owners.
4. Effective channel management
We focus on delivering against a guest's needs across the entirety of their journey. We manage all our booking channels to provide a compelling experience that allows guests to make the choice of the most appropriate booking channel for their needs.
5. Superior owner proposition
IHG is committed to delivering a compelling and preferred offer to our owners through a combination of strong owner relationship management, particularly through the IHG Owners Association, and effective operational support through our tools and services.
Our growth strategy is focused on markets which are the largest and/or fastest growing, markets in which IHG has strong existing brand presence or an opportunity to build a brand presence, and markets that are aligned to our business model.
Highest opportunity segments
We target our portfolio in the largest consumer segments with greatest growth opportunity and in those parts of the market where our scale and revenue delivery systems confer greatest benefits.
Managed and franchised model
We focus our business model on franchising and managing hotels, thereby enabling us to concentrate on building strong, preferred brands based on relevant guest needs.
Scale and efficiency of operations
We leverage our global and regional scale to maximise the efficiency of our operations, driving process improvements, tightly managing our costs proportionate to our revenues and evolving our corporate infrastructure and corporate support functions.
Investment in developing great talent and technology platforms
We support the delivery of the Winning Model by investing in the development of talent and technology platforms that provide the foundation for future growth.
Commitment to responsible business practices
Responsible business is part of IHG's DNA and is at the heart of everything we do. Doing the right thing in the right way enables us to make a positive contribution to the communities where we operate and gives us a competitive edge by enhancing and protecting the reputation of our brands. It also ensures that we act in a manner that is mutually beneficial for our business, and all of our stakeholders, employees, guests, corporate customers and owners, who are also increasingly considering whether the businesses they interact with, share their values and act responsibly. It also helps us deliver profitable growth and create shared value, thereby ensuring that we are preferred by guests, employees and owners in the long term.
For more detailed information about our business model and strategy, see our Annual Report and Financial Statements 2013 PDF (10.6MB).