Holiday Inn
Mark A. Snyder
Senior Vice President, Holiday Inn Brand
August 1, 1952 –
the first Holiday
Inn hotel opens
in Memphis, TN.
A vision borne of harsh reality…
1960- first
Holiday Inn
outside of the
United States –
Montreal, CA.
By 1962 there
are over 400
Holiday Inns…
By the early 70s
– there are over
1000 Holiday
Inns…and
growing…
th
1500 Holiday
Inn – Avignon,
France-1973.
HolidayInn-Analyst-07Dec04-MS-qal
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Our values: yesterday and today
• Family: It’s our founding principle
• Integrity: Reliable, straightforward value
• Tradition: More shared moments than any other hotel
• Modesty: Down-to-earth atmosphere
• Community: Always there for you
• Balance: Stuff for work and play
• Self-reliance: We supply you with what you need
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Who Cares? Everyday Heroes do
Target -- Everyday Heroes:
• Share our traditional values.
• Grounded, confident, not shallow
• Outgoing and sociable
• Hard working, conscientious, but don’t live to work
• Value quality time with family
• Strong sense of community
• Good neighbors, giving volunteers, longtime friends
What they want in a hotel:
•
•
•
•
Familiar, casual, down-to-earth
With a little “life”
Where they can work or unwind, their way
NOT trendy, overly indulgent, or overly basic
Positioning:
What Matters most, really matters. And, Holiday Inn understands that.
When you’re away from the support of home and office, Holiday Inn is the place that lets you
reconnect to what really matters most. We give you a casual atmosphere where you can be
yourself, share in good times with others, and unwind in whatever way you choose. An environment
that lets you do what you need to do -- on your own terms.
HolidayInn-Analyst-07Dec04-MS-qal
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Holiday Inn guests household income compares
favorably to the industry and US averages:
Avg.
Household College Avg. nights
Income education for business
Brand
Male
Age
Holiday Inn
66%
44.6
$81.522
26%
64%
Industry
57%
46.2
$77,738
25%
59%
US average
49%
35.3
$41,994
24%
n.a.
Source: IHG, D.K. Shifflet & Assoc., LTD, US Census Bureau
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The Sweet Spot
Holiday Inn
The Everyday Hero
Accepts me for me
Family
Casual, comfortable
Tradition
Has a little buzz,
something going on
Integrity
Is rooted in tradition
Modesty
Is familiar
Community
Encourages people to
come together
Balance
Lets me unwind however
I choose
Self-Reliance
Positioning:
Positioning:
Lets
Letsme
mereconnect
reconnectto
towhat
whatreally
reallymatters
mattersmost
most
HolidayInn-Analyst-07Dec04-MS-qal
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Why Everyday Heroes choose Holiday Inn
Comfortable, unpretentious rooms
Everywhere they want and need to be
Full Service Food and Beverage
Useful Amenities
HSIA and WiFI
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So where do Everyday Heroes
stay when they are not
staying at a Holiday Inn?
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Holiday Inn is well positioned against both
the business and leisure traveler
Business and leisure roomnights and mix by competitor, 2004
7%
10%
Marriott
8%
Holiday Inn
6%
Best
Western
4%
Comfort
2%
Hilton
Hampton Inn
Sheraton
Ramada
Courtyard
Share of Total Leisure Nights
Share of Total Business Nights
12%
Best
Western
6%
5%
Holiday Inn
Marriott
4%
Comfort
3%
Hilton
Ramada
Motel 6
Sheraton
Quality Inn
La Quinta
Courtyard
2%
1%
La Quinta
0%
35%
0%
45%
55%
65%
Business Mix
Source: D.K. Shifflet & Assoc., LTD
Source: D.K. Shifflet & Assoc., LTD
HolidayInn-Analyst-07Dec04-MS-qal
Hampton
75%
85%
0%
20%
40%
60%
80%
100%
Leisure Mix
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When not at
Holiday Inn,
Holiday Inn guests
stay at…
When not at
Marriott,
Marriott guests
stay at…
Marriott
42%
Holiday Inn
50%
Best Western
35%
Courtyard
42%
Holiday Inn Express 35%
Hilton
42%
Comfort Inn
34%
Sheraton
29%
Ramada
31%
Hampton Inn
28%
Hilton
29%
Best Western
28%
Source: Millward Brown Brand Dynamics Study
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Merrian-Webster’s Definition
of an Expert…
A person with skill or
specialized knowledge;
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“Stocks have reached what
looks like a permanently
high plateau.”
Irving Fisher, professor of economics at
Yale University, October 17, 1929
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“We don’t like their sound.
Groups of guitars are on
their way out.”
Decca Recording Company Executive,
turning down the Beatles, 1962
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“Bill Clinton will lose to any
Republican that doesn’t
drool on stage.”
The Wall Street Journal, 1995
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The Experts Speak about
Holiday Inn
• “Holiday Inn is a dying brand with little
relevance to the traveling consumer today...”
• “Holiday Inn is woefully behind its
competitors on a variety of fronts – with little
hope of catching up...”
• “As boomers head into retirement – so will
Holiday Inn...”
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The Experts Speak…
“Marriott has a higher
RevPAR than Holiday Inn...”
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Proving that sometimes –
the experts are right
Holiday Inn has a lower RevPAR than Marriott or Courtyard
2003 Year-End RevPAR
(1 Year Comparables)
$86.87
$63.65
$46.81
Holiday Inn
Source: STR; US RevPAR
HolidayInn-Analyst-07Dec04-MS-qal
Marriott
Courtyard
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What the Experts don’t say…
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2003 Rooms Sold
Based on year- end data released by Marriott
International, Holiday Inn sold more rooms in 2003
than Marriott or Courtyard
2003 Rooms Sold
(1 Year Comparables)
40.8m
28.5m
18.9m
Holiday Inn
Marriott
Courtyard
Source: IHG
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2003 Room Revenues
Holiday Inn room revenue in 2003 exceeded what was
posted by Courtyard and was comparable to Marriott
2003 Rooms Revenue
(1 Year Comparables)
$3.2bn
$3.7bn
$1.8bn
Holiday Inn
Source: D.K. Shifflet; IHG
HolidayInn-Analyst-07Dec04-MS-qal
Marriott
Courtyard
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The Experts Speak…
“Marriott owns the
business traveler...”
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Preferred Hotel for Business Travel
On an unaided basis, Holiday Inn compares favorably to
Marriott and Hilton when travelers were asked about their
hotel preference while traveling for business
2004 National Business Travel Monitor
(Unaided)
41%
40%
27%
3%
Marriott
Source: YPB&R/Yankelovich Partners
HolidayInn-Analyst-07Dec04-MS-qal
Source: YPB&R/Yankelovich
Holiday Inn
Partners
Hilton
Courtyard
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2003 Rooms Sold for Business
Holiday Inn sold more rooms for business
purposes than Marriott or Courtyard
2003 Rooms Sold For Business
(1 Year Comparables)
26.8m
20.3m
12.4m
Holiday Inn
Source: D.K. Shifflet; IHG
HolidayInn-Analyst-07Dec04-MS-qal
Marriott
Courtyard
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The Experts Speak…
“Marriott owns the
leisure traveler…”
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Preferred Hotel for Leisure Travel
On an unaided basis, Holiday Inn compares favorably
to Marriott and Hilton when travelers were asked about
their hotel preference while traveling for leisure
2004 National Leisure Travel Monitor
(Unaided)
43%
28%
19%
1%
Holiday Inn
Source: YPB&R/Yankelovich Partners
HolidayInn-Analyst-07Dec04-MS-qal
Marriott
Hilton
Courtyard
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The leisure segment has become dominant, and
will continue to be for the next five years…
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
1993
1994
1995
1996
1997
1998
Business
Source: D.K. Shifflet & Assoc., LTD
HolidayInn-Analyst-07Dec04-MS-qal
1999
2000
2001
2002
2003
Leisure
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Debuting in Orlando 2005 – Nickelodeon
chose Holiday Inn as their partner
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What price for loyalty?
Marriott’s customers are more price focused and
less brand loyal than Holiday Inn
"The company that I buy travel from doesn't matter as much
as getting the best price"
(US Leisure hotel bookers who booked online)
50%
Courtyard
46%
45%
Marriott
Fairfield
40%
40%
Comfort
Holiday Inn
Source: Forrester
HolidayInn-Analyst-07Dec04-MS-qal
Source: YPB&B/Yankelovich
Partners
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Ok – so the Boomers love
you – so what?
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From Brand Week – April 14
“Holiday Inn is mentioned
11 times in rap songs and
is in the top 40 of brands
associated with rapper’s
‘Bling Bling’ in lyrics.”
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The Emerging Opportunity…Today’s
Gen X: The Slackers Have Grown Up
Born:
1965 – 1980
Avg. Age: 30
Members: Matt Damon, Michael Dell, Winona Ryder, Gwyneth
Paltrow.
Married and having kids: Majority are now married. 60% are
parents. But while they’re having kids, they’re still watching MTV.
Priorities shifting: Xers are forming households and building careers;
being “cool” is losing importance (“need to be hip, cool, cutting
edge” down 10 pts since 1996).
Family-focused conservatives: 70% of Xer parents say they’ll do a
better job raising kids than the generation before them. Xers married
with children are considered by some experts as “the most conservative
people in the US.”
Time starved young professionals: Spend more on personal
services that any other age group. One-stop shopping epitomizes
these young families.
Source: American Demographics (July 2002), Yankelovich, 2001., Strauss & Howe.
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Generation X
While Gen X comprises only 29% of the U.S.
population over the age of 18, this generation is
responsible for 33% of all rooms sold in 2003
Room Night Contribution by Generation
(US Room Nights)
60%
50%
40%
30%
20%
10%
0%
1992
1993
1994
1995
GI
1996
1997
Silent
1998
1999
Boomers
2000
2001
2002
2003
Gen X
Source: D.K. Shifflet & Assoc., LTD
HolidayInn-Analyst-07Dec04-MS-qal
Source: D..K.
Shifflet & Assoc. LTD
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Emerging Professionals (Gen X) Only
Generation to Grow Business Travel
Business Room Night Volume by Generations
(US Business Room Nights in millions)
251
258
253
249
264
265
260
254
149
255
248
233
228
159
157
159
226
159
60
55
59
55
54
9
7
5
161
128
72
35
43
1992
74
47
77
62
37
1993
74
102
69
64
62
69
71
37
36
34
29
29
28
25
23
1994
1995
1996
1997
1998
1999
2000
2001
Gen X (1965-1980)
HolidayInn-Analyst-07Dec04-MS-qal
86
Boomers (1946-1964)
Silent (1930-1945)
2002 2003F 2004F
GI (Pre 1930)
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The Experts Say...
“As boomers head into
retirement – so will
Holiday Inn...”
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2003 Gen X Penetration
On an unaided basis, Holiday Inn compares favorably to
Marriott and Hilton when travelers were asked about their
hotel preference while traveling for business
Gen X Mix by Brand
37%
Holiday Inn
31%
31%
29%
Marriott
Hilton
Courtyard
33%
Industry
Source: D.K. Shifflet
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The Experts Speak…
Holiday Inn has done little to
improve the customer service and
product experience of the brand
over the last several years…
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In fact – we improved significantly
American Customer Satisfaction Index Scores
2004 Change vs
Score Baseline
ACSI Score by year 1994-2004
80
Hilton
77
2.70%
78
Marriott
76
-5.00%
76
Hyatt
74
-2.60%
74
Holiday Inn 73
5.80%
72
Starwood
73
0.00%
70
Ramada
67
-4.30%
68
66
Average
Hotel
HolidayInn-Analyst-07Dec04-MS-qal
72
-4.00%
64
Marriott Int’l
Hilton Corp
Holiday Inn
Ramada
94 95 96 97 98 99 00 01 02 03 04
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“Somewhere in these states, there is a young man
who is going to become very rich.
He is going to start a chain of small, clean, pleasant
hotels, standardized and nationally advertised, along
every important motor route in the country.
He is not going to waste money on gilt and onyx, but
he is going to have to have agreeable clerks, good
coffee, endurable mattresses and good lighting.”
Sinclair Lewis, Author
Saturday Evening Post, 1920
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Holiday Inn Hotel, Duluth Georgia
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Profile of a typical Holiday Inn
•
•
•
•
•
•
•
•
•
•
•
Rooms:
ADR:
Occupancy:
RevPAR:
Rooms Revenue:
Non Rooms Revenue %:
Total Revenue:
Build cost/key:
Location type:
Meeting space:
% franchised:
HolidayInn-Analyst-07Dec04-MS-qal
195 (prototype 140)
$78
60%
$48
$2.5 - 3.5m
30 - 40%
$3.2 - 4.5m
$75k
Secondary
8,000 sq ft
94%
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Who develops Holiday Inn?
• Legacy Developers
– Began their careers with
Holiday Inn…
– Created their own family
businesses through
developing Holiday
Inns…
– Diversified their portfolios
with IHG and competing
hotel brands…
– Many have passed the
legacy on to a child in the
family
HolidayInn-Analyst-07Dec04-MS-qal
• Emerging “Lords of
Lodging”
– Younger, more ethnically
diversified than their
predecessors…
– Global appeal of the Holiday
Inn brand name is a primary
selection driver
– Many start in limited service
mid-scale, and then trade up
to full service mid-scale…
– Most view HI as the
“pinnacle” of the American
Dream…they find
inclusiveness here.
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Why does an owner choose
Holiday Inn?
• Most well-known, best loved hotel
brand in the world
• Proven return on investment,
evidenced by 53 years in the business
• The powerhouse of the “IHG engine”
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“The reports of my death
have been greatly
exaggerated.”
Mark Twain, Author
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Growth strategy of Holiday Inn
Growth
Driver
Focus
Units
RevPAR
Ubiquitous distribution so will see replacement
of units moving forward rather than net growth
√
Continuing to improve quality of estate and
grow same store sales by reconnecting with
brand heritage and rapid deployment of
prototype into strategic market
Royalty
rate
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Unit growth is not what Holiday Inn
is all about . . .
Holiday Inn US vs Midscale with F&B Segment
Growth in Available Room Nights
Available Room Nights per annum (millions)
(Index = 100, CAGR with label)
110
105
100
95
HI -1.9%
90
Midscale
w/F&B -2.2%
85
80
2000
Source: STR
HolidayInn-Analyst-07Dec04-MS-qal
2001
2002
2003
2004
-47-
. . . because it is already everywhere
% of tracts in which brand is present
93%
94%
64%
29%
Holiday Inn
Source: STR
HolidayInn-Analyst-07Dec04-MS-qal
Best
Western
Courtyard
Hilton
Garden Inn
40%
Marriott
52%
Ramada
-48-
Conclusions
•
Holiday Inn is undoubtedly the most consumerpreferred brand in the hotel industry
•
Holiday Inn is the cornerstone of IHG portfolio,
providing scale for all Enterprise Value programs
•
Unit growth is limited because we are already
everywhere; growth for IHG will come from focus
on other profit levers
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