InterContinental Hotels Group PLC · LSE:IHG
InterContinental Hotels — Investor Day (November 2010)
19 slides from InterContinental Hotels's investor day presentation, November 2010
Slide 1: Where we play - building profitable scale
Where we play - building profitable scale November 2010 InterContinental Huizhou, China 1
Slide 2: Agenda
Agenda 14:00 – 15:15 Where we play – building profitable scale Andy Cosslett CEO IHG in the Middle East Kirk Kinsell - Q&A President, EMEA 15:15 – 15:45 Coffee break 15.45 – 17:15 The China Opportunity Keith Barr -Q&A MD, Greater China Jerry Huang SVP Operations, Greater China 17:15 – 18:00 India Pr
Slide 3: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements These presentations contain certain forward-looking statements as defined under US law (Section 21E of the Securities Exchange Act of 1934). These forward-looking statements can be identified by the fact that they do not relate to historical or cu
Slide 4: The opportunity
The opportunity 1. Sustained growth for the HOTEL INDUSTRY • Population and GDP growth • Favourable demographic trends • Globalisation of trade and tourism 2. BRANDED CHAIN PLAYERS will continue to outpace the rest • Sales and marketing firepower • Technology advancements • Lending and regulatory en
Slide 5: IHG's growth strategy to create sustainable value
IHG’s growth strategy to create sustainable value Making best use of our scale to build and grow preferred hotel brands for guests and owners in high value markets “Where we play” “How we win” Model Powerful and distinct brands Segments Best demand delivery systems Markets Aligned and engaged organi
Slide 6: Model - why focus on managing and franchising?
Model - why focus on managing and franchising? • Low capital expenditure requirements for IHG Adjusted managed & franchised margins¹ • Faster unit growth and organisational focus 37% 36% • Flexibility to operate in more markets 34% • Local partner expertise • More resilient fee stream H1 2008 H1 200
Slide 7: Segments - participating where IHG creates value
Segments - participating where IHG creates value Criteria for success % branded Segment IHG participation? revenues Scale System Branded benefits delivery value Super Luxury 3% Luxury/ Upper 36% Upscale Upscale 25% Midscale 29% Economy 7% Some Source: IHG analysis; revenues global STR average 07-09
Slide 8: Markets - why leadership positions are important
Markets - why leadership positions are important • Create scale economies and build system delivery - Investment in platforms e.g. websites • Become first choice in market for owners • Secure best development sites • Attract best talent • Outbound travel network builds brand loyalty - 20 countries a
Slide 9: Top markets account for 82% of global industry
Top 20 markets account for 82% of global industry IHG has leadership positions in 15 % of 09 % of 09 IHG IHG global global Rank Country Leadership Rank Country Leadership accom. accom. position position spend spend 1 United States 23% 11 Mexico 2% 2 Italy 8% 12 Canada 2% 3 Japan 8% 13 Austria 2% 4 F
Slide 10: In the next 10 years 10 markets will account for two thirds of industry growth
In the next 10 years 10 markets will account for two thirds of industry growth 55 Incremental accommodation spend 2009-2020 ($bn) 34 14 14 10 8 8 7 6 6 US China Middle India France UK Italy Germany Mexico Malaysia East • These 10 markets account for 84% of IHG’s pipeline Source: IHG analysis 10
Slide 11: IHG's approach to market development
IHG’s approach to market development 11
Slide 12: IHG's approach to market development – scale markets
IHG’s approach to market development – scale markets = Scale markets 12
Slide 13: Scale market strategy
Scale market strategy Definition Implications • World’s largest hotel markets • Build national scale • Opportunity for good growth • Management focus • IHG leadership position • Priority for investment • Branded culture • Locally tailored platforms • Good system delivery • Multi-brand portfolio • Gr
Slide 14: IHG's approach to market development – priority markets
IHG’s approach to market development – priority markets = Scale markets = Priority markets 14
Slide 15: Priority market strategy
Priority market strategy Definition Implications • Important contributor to IHG • Selective city development – e.g. Canada, France • Scale accrues at a city level • Potential to become scale market • Lead with upscale and full service brands • Opportunity for good growth – e.g. Middle East, India •
Slide 16: IHG's approach to market development - key city strategy
IHG’s approach to market development - key city strategy = Scale markets = Priority markets = Key city strategy 16
Slide 17: Guiding principles to ensure profitable growth
Guiding principles to ensure profitable growth DECISION GUIDELINES Minimum deal values Tertiary • by brand • by business model Secondary • by region KEY CITY HIT LIST Primary IC CP IND HI EX SB CW \\\\\\\\\\\\\\\ MAPPING -- -- -- -- -- -- -- -- -- -- -- -- -- -- Economic/Tourism Trends Mega • City C
Slide 18: Significant capacity for growth
Significant capacity for growth 35,000 • Global market will be >30m rooms by 2030 Global industry room supply (‘000) 30,000 25,000 • Branded rooms will grow to 50% of the global market 20,000 •China will account for a 15,000 large proportion of the growth 10,000 50% 45% 5,000 37% 38% 31% 0 1990 2000
Slide 19: Where we play - building profitable scale
Where we play - building profitable scale November 2010 InterContinental Huizhou, China 19
InterContinental Hotels Group — Investor Day (November 2010) on 6ix