Kevin Kowalski
Vice President, Crowne Plaza Brand
CrownePlaza-Analyst-07Dec04-KK-qal
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Crowne Plaza is a 21 year old brand
with two distinct eras
Began as
a line
extension
Holiday
Inn
Crowne
Plaza
Brand
changes to
Crowne Plaza
by Holiday Inn
…and back
again to
Holiday Inn
Crowne Plaza
1983
Becomes
simply
Crowne
Plaza
1993
Some stops and starts on strategy
slow growth
CrownePlaza-Analyst-07Dec04-KK-qal
Explosive growth
years
including addition
of 17 FelCor
Properties in
1997/1998
1995 - 1997
Established with
The Place To
Meet and The
Sleep Advantage
2004
More support, growth and clarity
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We compete primarily in the upscale segment
US
Industry
10 yr trend
Upscale
segment
Growth vs. Prior Year
COURTYARD
+ 25 %
RADISSON
RESIDENCE INN
CROWNE PLAZA
GARDEN INN
WYNDHAM HOTELS
AMERISUITES
- 25 %
Supply
Demand
Revenues
Source: STR
CrownePlaza-Analyst-07Dec04-KK-qal
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Competitive sets include upper-upscale brands
# Hotels
Westin
Marriott
Hilton
Sheraton
Doubletree
Crowne Plaza
Wyndham
Radisson
Source: STR
62
317
216
175
131
87
71
217
# Rooms
32,625
128,968
84,577
64,872
35,936
26,116
22,793
53,679
Upper Upscale
Upscale
Key
KeyCompetitors
Competitorsare
aresecond
secondtier
tierUpscale
Upscaleand
and
Upper
UpperUpscale
Upscalebrands
brands
Destination
Destination––be
bethe
thebest
bestperforming
performing
Brand
Brandamong
amongthis
thisgroup
group
CrownePlaza-Analyst-07Dec04-KK-qal
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The overall opinion of Crowne Plaza is broadly on
par with competitors
Overall rating of excellent/very good experience
Among past year guests of:
Sheraton
61
Doubletree
63
65
Radisson
Crowne Plaza
74
Hilton
79
Marriott
84
0
20
40
60
80
100
Source: Millward Brown, 2003
CrownePlaza-Analyst-07Dec04-KK-qal
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However, there is opportunity to raise awareness
and hence consideration
Total Brand Awareness
Marriott
100
Hilton
99
Sheraton
99
Raddison
98
Doubletree
86
Crowne
76
0
20
40
60
80
100
120
Source: Millward Brown
CrownePlaza-Analyst-07Dec04-KK-qal
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Our overall brand strategy focuses on trial as a
means of raising consideration and awareness
Trial
Efficiently Get Them In the Door
Meetings Focus
Retrial
Get Them To Come Back
Sleep Experience
Max ADR
Get More $$ Out of Them
…Just Common
Sense
CrownePlaza-Analyst-07Dec04-KK-qal
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Our primary target is meeting planners
Professional
Corporate
•
•
•
•
Third Party
87% female
Average age 45
Average 10 years in industry
Knowledgeable and demanding
CrownePlaza-Analyst-07Dec04-KK-qal
Non Professional
Corporate
Social
• Highly variable demographics
• Most often in administrative roles
• More likely to be from a sales
or marketing function
• Not knowledgeable
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Meetings represent an attractive opportunity
• $15bn in revenue to the hotel industry
• 40% of our business
• Multiple revenue sources
• Small and efficient marketing target
Source: D. K. Shifflet, 2002
CrownePlaza-Analyst-07Dec04-KK-qal
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Our secondary target is upscale business travelers
Profile:
• 67% male/33% female
• Average household income
$83,000
• Average age range 34-55
• Average length of stay is 2 nights
• 70% professional/manager
Source: D.K. Shifflet 2004
CrownePlaza-Analyst-07Dec04-KK-qal
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The brand has a simple promise for its two key
audiences
Meeting Planners
Business Travelers
A better meetings
experience
The Place To Meet
A better nights sleep
CrownePlaza-Analyst-07Dec04-KK-qal
The Sleep Advantage
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We set ourselves apart among meeting planners
The Crowne Meetings Director:
2-Hour Response Guarantee:
Daily Meeting Debrief:
CrownePlaza-Analyst-07Dec04-KK-qal
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Our meeting planner satisfaction is outstanding
100
90
Crowne Plaza Brand Index
Scores – By Quarter
88
88
89
• Lodging Hospitality:
90
¾ Chain Leadership Award
for Best Hospitality
Marketing Campaign
• Helms Briscoe:
¾ Crowne Plaza consistent
2nd on brands they most
like doing business with
80
(ahead of everyone but
Marriott)
70
Jul - Sep 03
Oct - Dec 03 Jan - Mar 04
Apr - Jun 04
Group
Group Demand
Demand for
for 2004
2004 YTD
YTD experiencing
experiencing 15%
15%
demand
growth,
booking
pace
similar
demand growth, booking pace similar
CrownePlaza-Analyst-07Dec04-KK-qal
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We deliver a better night’s sleep for business
travelers
• Sleep amenities
• Sleep CD and tips
• Guaranteed
Wake-up call
• Quiet zones
• Sleep expert
staff training
• Luxurious new
bedding
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Guests love the sleep advantage
Guest satisfaction Scores - Bedding
85
85
90
90
80
80
75
75
+ 13%
70
70
60
60
50
50
40
40
30
30
20
20
10
10
00
April
April '04
'04
August
August '04
'04
Source: IHG GSTS
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Profile of a typical Crowne Plaza
•
•
•
•
•
•
•
•
•
•
•
Rooms:
ADR:
Occ:
RevPAR:
Rooms Revenue:
Non Rms Rev %:
Total Revenue:
Build cost/key:
Location type:
Meeting space:
% Franchised:
CrownePlaza-Analyst-07Dec04-KK-qal
250 - 350
$94
66%
$62
$6 - 9m
25 - 35%
$8 - 12m
$110 - 140k
Primary
13,000 sq ft
75%
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Profile of a typical owner
50%
Small private
hotel owners
• Upscale experience/history
• Own management expertise or
hire 3rd party (e.g., IHG)
• Some real estate players from
outside the hotel industry
• Some midscale owners trading
up
CrownePlaza-Analyst-07Dec04-KK-qal
50%
REITs and Other
Institutional Players
• Some wholly real estate
focused:
¾ we manage
• Others both owners
and managers
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Both ownership groups invest in Crowne Plaza for
the same reasons
• Attractive, affordable investment
Lower up front and operating investment than leading
upscale brands
• Momentum
RevPAR growth leading competitive set combined with
recent brand focus and program success
• Best Remaining Choice
Major brands have reached market saturation
CrownePlaza-Analyst-07Dec04-KK-qal
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Strategic priorities going forward
•
Aggressively grow distribution
•
Deliver on our brand promise
•
Continue to drive trial
•
Become industry leaders on pricing and
revenue management
CrownePlaza-Analyst-07Dec04-KK-qal
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Growth strategy for Crowne Plaza
Growth
Driver
Units
Focus
√
Crowne Plaza is geographically underrepresented and
will be one of the few brands available to developers in
many locations
Flexible fit to wide range of hotel sizes and locations
maximises its potential locations
RevPAR
Royalty
rate
CrownePlaza-Analyst-07Dec04-KK-qal
√
Focus is on capturing repeat business from guests
who experience the brand through
meetings/conferences
Pricing on par with competitive set
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CP has grown only marginally slower than the
upscale segment
Crowne Plaza US vs Upscale Segment
Growth in Available Room Nights
(Index = 100, CAGR with label)
Available Rooms Nights per annum (millions)
140
130
Upscale 6.2%
CP 5.6%
120
110
100
90
80
2000
2001
2002
2003
2004
Source: STR; average based on rooms built and converted 1999 - 2003
CrownePlaza-Analyst-07Dec04-KK-qal
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Lower tract coverage than competitors
% of tracts containing brand
39%
31%
28%
23%
19%
13%
Crowne
Plaza
10%
Doubletree
Hilton
Marriott
Radisson
Sheraton
Wyndham
Source: STR
CrownePlaza-Analyst-07Dec04-KK-qal
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Conclusions
• We have established a well positioned brand for
specific key audiences
¾ Owners – The next best choice among unsaturated brands
¾ Guests – A clear and differentiated brand proposition for
both key audiences
• We are well positioned for aggressive growth
¾ Brand strengths
¾ Creative development strategy
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