InterContinental Hotels Group PLC · LSE:IHG

InterContinental Hotels — Investor Day (November 2006)

60 slides from InterContinental Hotels's investor day presentation, Nov 30, 2006

  1. Slide 1: InterContinental Hotels & Resorts

    (© INTERCONTINENTAL. HOTELS & RESORTS

  2. Slide 2: Andrew Cosslett, Chief Executive

    Andrew Cosslett Chief Executive

  3. Slide 3: IHG's journey

    IHG's journey Goal Target Faster growth by By end 2008: making IHG’s brands Net, organic growth of the first-choice for 50,000 - 60,000 rooms guests and hotel owners Strategy Priorities Build the industry’s • Brand performance strongest operating system • Excellent hotel returns focused on the bigge

  4. Slide 4: Today's agenda

    Today’s agenda Peter Gowers The importance of brands Chief Marketing Officer Jenifer Zeigler InterContinental Brand Director How we apply consumer insight Roland Fasel General Manager InterContinental London Park Lane How we drive Richard Solomons hotel returns Finance Director 4

  5. Slide 5: Today's agenda

    Today’s agenda Peter Gowers The importance of brands Chief Marketing Officer Jenifer Zeigler InterContinental Brand Director How we apply consumer insight Roland Fasel General Manager InterContinental London Park Lane How we drive Richard Solomons hotel returns Finance Director 5

  6. Slide 6: Driving growth

    Driving growth Target Goal Faster growth by By end 2008: making IHG’s brands Net, organic growth of the first-choice for 50,000 - 60,000 rooms guests and hotel owners RevPAR X Rooms X Royalty rate 6

  7. Slide 7: Importance of brands continues to grow

    Importance of brands continues to grow • Customers want brands – Growth in branded consumer products – Growing use of internet to book - brands offer reassurance • Lenders want brands – Last two cycles showed trading resilience of branded hotels – Branded hotels easier to resell • Owners want brands

  8. Slide 8: Strong global growth in branded rooms

    Strong global growth in branded rooms 1995 2001 2004 ‘000 ‘000 ‘000 Worldwide Rooms 14,100 16,900 18,350 Worldwide Branded Rooms 2,900 4,400 6,713 Worldwide % Branded Rooms 21% 26% 37% Source: Mintel/TTI/IHG analysis 3% CAGR growth in worldwide rooms over last decade 10% CAGR growth in worldwide bra

  9. Slide 9: Still significant growth to come

    Still significant growth to come 2004 Total % Branded Rooms Branded Rooms '000 Rooms '000 North America 5,650 65% 3,673 South America 850 20% 170 Americas 6,500 59% 3,843 Europe 6,550 25% 1,638 Middle East 355 25% 89 Africa 485 15% 73 EMEA 7,390 24% 1,799 East Asia 3,500 25% 875 South Asia 200 10% 2

  10. Slide 10: Strong branded revenue growth

    Strong branded revenue growth 13% US Industry revenue growth 11% 5.9% 16 year CAGR 9% % growth per annum 7% 5% 3% dd 3.0% 16 year CAGR 1% 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 -1% -3% Unbranded Branded -5% -7% Source: STR 10

  11. Slide 11: The importance of having a brand portfolio

    The importance of having a brand portfolio • Meets customer needs – Customers have different stay needs but like to stay within the same loyalty programme • Meets owner needs – Owners like to work with a small number of brand owners but have different development opportunities • Common brand platfor

  12. Slide 12: IHG's 7 step process to build differentiated brands

    IHG's 7 step process to build differentiated brands 1.DNA 2.Insight 3. Point of Difference 4. 5. 6. 7. Innovation Look & Feel Consistency Character 12

  13. Slide 13: What IHG does differently

    What IHG does differently Hotel Industry IHG Intuition Insight Generic brands Distinctive brands Focused on product Product and People 13

  14. Slide 14: Getting branding right - Holiday Inn Express

    Getting branding right - Holiday Inn Express DNA Insight Point of Difference “SMART” Innovation: Look & Feel: Consistency: Character: Shower Advertising Breakfast Training Revenues growth +2.3ppt vs segment (2002-05) Segment pipeline share +4.6ppt (2002-05) Royalty rate +1ppt (2005) 14

  15. Slide 15: Significant opportunity in the luxury segment

    Significant opportunity in the luxury segment Global room revenue Forecast global room revenue by segment growth by segment, 2005-10 140 40 120 35 30 100 2005 Revenues Revenue growth 25 ($ Billions) 80 ($billion) 20 60 15 40 10 20 5 0 0 Luxury Upscale Midscale Budget Luxury Upscale Midscale Budget S

  16. Slide 16: Luxury hotel brands currently undifferentiated

    Luxury hotel brands currently undifferentiated Bedding wars Fine dining Flat screen TVs ….all expensive for owners 16

  17. Slide 17: Differentiating InterContinental

    Differentiating InterContinental Customer Owner preference ROI Owner Focused Research Point of Difference Brand Manager Projects “IN THE KNOW” Owner input 17

  18. Slide 18: Today's agenda

    Today’s agenda Peter Gowers The importance of brands Chief Marketing Officer Jenifer Zeigler InterContinental Brand Director How we apply consumer insight Roland Fasel General Manager InterContinental London Park Lane How we drive Richard Solomons hotel returns Finance Director 18

  19. Slide 19: Current InterContinental positioning

    Current InterContinental positioning • Most global Five Star hotel brand – 142 Hotels; 63 countries • Strong representation in fast growing economies: – China : 6 open; 9 pipeline – Rest of Asia Pacific: 23 open; 9 pipeline – Middle East : 30 open; 4 pipeline – United States & Mexico: 24 open; 6 pip

  20. Slide 20: Performance already strong

    Performance already strong Global InterContinental RevPAR Growth 15 RevPAR Growth (%) 10 5 0 Q3'04 Q4'04 Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 • RevPAR growth outperformance vs global luxury sector – 2005: 2.2ppt outperformance – H1 2006: 3.4ppt outperformance 20

  21. Slide 21: High growth opportunities

    High growth opportunities Luxury segment growing Leverages IHG's global footprint and around the world owners' development opportunities High revenue per hotel Creates its own scale means fits most locations - other brands need market scale High value per $300k- $3m fees; average $800k management co

  22. Slide 22: InterContinental repositioning

    InterContinental repositioning Phase I: Phase II: Portfolio repositioning Brand research 1998: 1998: InterContinental brand Older demographic targeted acquired - 117 hotels Conservative positioning 1998 - 2006: portfolio optimised 2004-2006: Consumer research 35 Lower quality hotel exits Younger dem

  23. Slide 23: Getting branding right - InterContinental

    Getting branding right - InterContinental DNA Insight Point of Difference “IN THE KNOW” Look & Feel: Consistency: Character: Innovation: Updated Local Colleague Concierge brand image experience Engagement 23

  24. Slide 24: Slide 24

  25. Slide 25: InterContinental Concierge website

    File Edit ‘Yiew Favorites Tools Help ex - D> i¥) 2] Address 4 INTERCONTINENTAL CONCIERGE InterContinental The Willard Washington D.C. 1401 PENNSYLVANIA AVE Nw, DC, UNITED STATES We value your opinion. Please take our quidesurvey. WHERE TO EAT & DRINK WHERE TO SHO! IN THE KNOW DISCOVER A , i |HOME, a

  26. Slide 26: InterContinental Concierge guide

    terContinental Concierge icrosoft Internet Explorer = 8) x File Edit ‘Yiew Favorites Tools Help | aa S * ) i sc = « f €) Back >?) |x] \2) f | } Search Favorites © | Oo Kea a ® rel Address \e) http://poweredby, 10best.com/quide/index, php?siteKey=¥ ToxOntpOjA7czoyOil4NyI7FQ%253D%253D hai Go | Links >

  27. Slide 27: Your guide to Washington DC

    NTINEN YOUR GUIDE WASHINGTON DC AWAITS YOU AT THE NTERCONTINENTAL CLICK HERE FOR YOUR PRINT-FRIENDLY ESSENTIALS r booking info. Directions. Local tips. ington D Contact Information

  28. Slide 28: Slide 28

  29. Slide 29: Slide 29

  30. Slide 30: Slide 30

  31. Slide 31: Slide 31

  32. Slide 32: You bring it to life

    YOU BRING IT TO LIFE

  33. Slide 33: Slide 33

  34. Slide 34: Slide 34

  35. Slide 35: 2006 Signings

    2006 SIGNINGS

  36. Slide 36: Dubai, Nanjing, Davos, Arizona

    Dubai Nanjing Davos Arizona

  37. Slide 37: Openings

    bane ? es OPENINGS ~ Mar

  38. Slide 38: Today's agenda

    Today’s agenda Peter Gowers The importance of brands Chief Marketing Officer Jenifer Zeigler InterContinental Brand Director How we apply consumer insight Roland Fasel General Manager InterContinental London Park Lane How we drive Richard Solomons hotel returns Finance Director 38

  39. Slide 39: Bringing "In The Know" to life

    Bringing "In The Know" to life DNA Insight Point of Difference “IN THE KNOW” Innovation: Look & Feel: Consistency: Theo Randall Character: Guest Rooms Arrival Spa People Public Areas Service Club Lounge 39

  40. Slide 40: Bringing "In The Know" to life

    Bringing "In The Know" to life DNA Insight Point of Difference “IN THE KNOW” Innovation: Look & Feel: Consistency: Theo Randall Character: Guest Rooms Arrival Spa People Public Areas Service Club Lounge 40

  41. Slide 41: Theo Randall at the InterContinental

    Theo Randall at the InterContinental 41

  42. Slide 42: Club InterContinental

    Club InterContinental 42

  43. Slide 43: Bringing "In The Know" to life

    Bringing "In The Know" to life DNA Insight Point of Difference “IN THE KNOW” Innovation: Look & Feel: Consistency: Theo Randall Character: Guest Rooms Arrival Spa People Public Areas Service Club Lounge 43

  44. Slide 44: Suite

    Suite 44

  45. Slide 45: Lobby

    Lobby 45

  46. Slide 46: Bringing "In The Know" to life

    Bringing "In The Know" to life DNA Insight Point of Difference “IN THE KNOW” Innovation: Look & Feel: Consistency: Theo Randall Character: Guest Rooms Arrival Spa People Public Areas Service Club Lounge 46

  47. Slide 47: Service

    Service 47

  48. Slide 48: Bringing "In The Know" to life

    Bringing "In The Know" to life DNA Insight Point of Difference “IN THE KNOW” Innovation: Look & Feel: Consistency: Theo Randall Character: Guest Rooms Arrival Spa People Public Areas Service Club Lounge 48

  49. Slide 49: People

    People 49

  50. Slide 50: Competitive Map

    Competitive Map 04 - 07 ‘In the know’ authentic Connaught Claridges Lanesborough Ritz Classic Modern Traditional Contemporary Mandarin Four Seasons Dorchester Oriental Great Eastern Sanderson Churchill Hyatt The Langham Regency The Metropolitan Generic Consumer promise 50

  51. Slide 51: Market position 2004-2007

    Market position 2004-2007 Club Intercontinental Standard Rooms Superior Rooms Suites Signature Suites 112 Rooms 275 Rooms 60 Suites 2007 £200-250+ £150+ £400-500+ 2004 £130+ £150+ £210+ 51

  52. Slide 52: Business mix 2004-2007

    Business mix 2004-2007 Wholesale Corporate Large Individual leisure rates meetings customers 2007 25% 20% 11% 44% Reduce Reduce Reduce Increase 2004 36% 27% 16% 21% 52

  53. Slide 53: Today's agenda

    Today’s agenda Peter Gowers The importance of brands Chief Marketing Officer Jenifer Zeigler InterContinental Brand Director How we apply consumer insight Roland Fasel General Manager InterContinental London Park Lane How we drive Richard Solomons hotel returns Finance Director 53

  54. Slide 54: IHG's journey

    IHG's journey Goal Target Faster growth by By end 2008: making IHG’s brands Net, organic growth of the first-choice for 50,000 - 60,000 rooms guests and hotel owners Strategy Priorities Build the industry’s • Brand performance strongest operating system • Excellent hotel returns focused on the bigge

  55. Slide 55: InterContinental London Park Lane refurbishment

    InterContinental London Park Lane refurbishment Hotel Built 1973 1998: InterContinental Property in need of refurbishment brand acquisition Capex 1998-2005 Low capex spend - await refurbishment £70m Renewal capex 2005/06: £5m Enhancement capex Refurbishment £1m New brand standards Ongoing capex 5-7%

  56. Slide 56: Major owned and leased asset refurbishment profile

    Major owned and leased asset refurbishment profile Refurbishment New Build New York 2000/2001 Paris Le Grand 2002/2003 Atlanta 2004 Goal to meet WACC Hong Kong 2004-2006 across the cycle Boston 2006 London Park Lane 2005-2006 56

  57. Slide 57: InterContinental London Park Lane earnings profile

    InterContinental London Park Lane earnings profile 2000 Revenue £43m; EBITDA £20m; EBIT £18m 2001 Revenue £33m; EBITDA £15m; EBIT £13m 2002 Revenue £31m; EBITDA £13m; EBIT £11m 2003 Revenue £30m; EBITDA £11m; EBIT £9m 2004 Revenue £31m; EBITDA £11m; EBIT £10m 2005 Revenue £18m; EBITDA £(1m); EBIT £(

  58. Slide 58: Andrew Cosslett, Chief Executive

    Andrew Cosslett Chief Executive

  59. Slide 59: IHG's journey

    IHG's journey Goal Target Faster growth by By end 2008: making IHG’s brands Net, organic growth of the first-choice for 50,000 - 60,000 rooms guests and hotel owners Strategy Priorities Build the industry’s • Brand performance strongest operating system • Excellent hotel returns focused on the bigge

  60. Slide 60: InterContinental Hotels & Resorts

    (© INTERCONTINENTAL. HOTELS & RESORTS

InterContinental Hotels Group — Investor Day (November 2006) on 6ix