InterContinental
Hotels Group
IHG vs. its Main Competitors
Pipeline
Network
EMEA
APAC
13%
19%
Americas
68%
In ‘000
rooms
Vs
end 2009
205
-3%
138
+6%
105
+5%
103
-5%
101
0%
495
85
0%
302
51
-24%
Pipeline
In ‘000
rooms
647
208 Kr
(1)
83%
613
8%7%
85%
605
10% 4%
~600
86%
1st
56%
16%
Rooms pipeline
as of end of year, 2010
Rooms network
as of end of year, 2010
(2)
8% 9%
Worldwide excluding the US
28%
507
366Kr
7%5%
20%19%
88%
61%
(1) Hilton geographical breakdown based on 2009 figures
NB: Figures include traditional lodging and extended stay units but exclude timeshare products
(2) Hilton pipeline based on an internal press release, January 2011
Slight decrease in most of the pipelines, IHG
keeping the highest one
IHG first hotel operator worldwide
Source : Companies annual reports except for Hilton network, Accor internal data
2
InterContinental Hotels Group
Summary
3
1.
Company overview
Slide 4
2.
Company organization
Slide 5
3.
Brand positioning
Slide 6
4.
Geographical breakdown
Slide 7
5.
Room portfolio
Slide 8
6.
Operating mode
Slide 9
7.
Group strategy
Slide 11
8.
Pipeline and lodging development
Slide 13
9.
Key figures
Slide 16
10.
SWOT analysis
Slide 19
11.
Company history
Slide 20
12.
Brands description
Slide 21
InterContinental – Company profile
FY 2010
1. Company overview
segment
# hotels
# rooms
Eco-Lux
4,437
647,161
ADR
RevPAR
OR
63.4%
Description
$106.04
$67.22
Main Shareholders
– With brands such as Holiday Inn dating back to the 1950s,
Intercontinental Hotel Group (IHG) was formed by the
separation of Six Continents on April 2003
– With 4,437 hotels and 647,161 rooms in over 100 countries,
IHG is the largest hotel group worldwide
– IHG operates 7 brands in the traditional lodging industry and
the extended stay segment, from economy to luxury
– Economy: Express by Holiday Inn, Candlewood Suites
– Midscale: Holiday Inn, Hotel Indigo
– Luxury: Intercontinental, Crowne Plaza and StayBridge
– Since 2003, IHG has moved to an asset light model, with a
focus on franchise and management
Owners
Stake
Float
99,0%
JP Morgan Asset Management
Cedar Rock Capital
5,03%
5,02%
4,95%
4,78%
Southeastern Asset Management
Fidelity International Limited
– Only 15 owned hotels worldwide
– Asset sale program £2.9bn worth since 2003
– 335,000 employees
Listed on the NYSE and the London Stock Exchange
Main Figures
Segmental Revenue and Operating Profit
2009
2010
2011E
2012E
1,538
1,628
1,736
1,858
Revenue
Financials ($m)
Revenue
EBITDA margin
Net Profit
Net margin
5.9%
6.6%
7.0%
492
552
623
696
32.0%
33.9%
35.9%
37.5%
214
293
330
386
13.9%
18.0%
19.0%
20.8%
300
200
10 0
0
Market Data ($m)
Market Cap
6,290
Network
Hotels
Rooms
4
Operating Profit
400
% Change in Revenue
EBITDA
50 0
4,437
647,161
Sources: Reuters as of April 26, 2011, Google
Finance, Company
Americas
EMEA
- 10 0
APAC
Central
-200
InterContinental – Company profile
FY 2010
A me EM EA A PA CC ent r al T o t al
r icas
Gr o up
2. Company organization
Hotel business
Other activities
Full & Limited service
segment
Award winning loyalty
program
(Over 51m members
worldwide)
5
InterContinental – Company profile
FY 2010
Extended Stay
segment
3. Brand positioning
Luxury upscale
171 h
(29% of room network)
388 h
Midscale
(37% of room network)
1,241 h
188 h
6h
38 h
2,075 h
Economy
288h
(34% of room network)
Full
Service
6
Limited
Service
InterContinental – Company profile
FY 2010
Extended
Stay
4. Geographical breakdown
Hotel and room network
4,437h. / 647,161r.
As of December, 31, 2010
Europe,
Africa &
Middle-East
694 h
120,852 r
68%
19%
Americas
3,458 h
439,375 r
13%
20%
285h
86,934 r
36%
44%
22%
9%
43%
36%
35%
X%
7
Source: IHG report 2010
Share of
global
network
Asia &
Pacific
Luxury
Midscale
Economy
InterContinental – Company profile
FY 2010
55%
5. Room portfolio
Breakdow n
by brand
Category
ACCOR
Brand
Upscale & Luxury
InterContinental H&R
Crow ne Plaza
Sofitel
Upscale
Pullman
Ltd-Service
Ltd-Service
Novotel
Hi Club Vacations
Econom ic
Holiday Inn Express
Ltd-Service
Ibis
Extended Stay
Candlew ood Suites
Other
Total
171
Geographical repartition
Hotel av
Europe Af. Mdle-East
Americas
Size
H
R
H
R
Upper-mid.
Economic
Adagio
58 429
294
342
Operating m ode (% room s)
Asia Pac.
H
R
Ow ned
& Leased
Mnged
Fchised
162
43 052
265
76 193
132
45 339
64
20 111
56
19 120
51
19 198
2,2%
5,6%
50,1%
74,4%
47,9%
20,0%
388 106 155
274
98
22 941
209
57 073
81
26 141
0,0%
36,8%
63,2%
1 285 234 665
183
327
53 055
853
151 829
105
29 781
0,6%
22,0%
77,4%
1 241 227 225
38
4 548
183
120
325
2
52 945
110
812
35
144 683
4 254
104
29 597
0,6%
22,5%
77,0%
1
184
4,6%
13,0%
82,4%
6
2 892
0,0%
0,0%
100,0%
6
Total Lodging
Staybridge Suites
Room s
559 164 584
Luxury
Midscale
Holiday Inn H&R
Hotel Indigo
Hotels
2 892
482
2 075 191 228
2 075 191 228
92
92
198
198
23 706
23 706
1 847
1 847
159 867
159 867
30
30
7 655
7 655
0,1%
4,2%
95,7%
0,1%
4,2%
95,7%
3 919 590 477
151
687
119 813
2 965
387 889
267
82 775
0,9%
22,7%
75,1%
18
4 159
0,4%
36,1%
63,5%
518
56 684
109
7
1 039
493
51 486
188
20 762
110
5
748
183
20 014
1,1%
29,2%
69,7%
288
42
28 253
7 669
98
183
33,0%
67,0%
291
28 253
3 219
0,0%
2
288
22
18
4 159
0,0%
66,4%
33,6%
4 437 647 161
146
694
120 852
3 458
439 375
285
86 934
0,8%
25,1%
74,1%
Source : 2010 FY
Occupancy rate
Average Daily rate
RevPar
8
2009
2010
Change
59,8%
63,4%
3,6 pts
102,2
106,0
3,7%
61,1
67,2
(10,0%)
InterContinental – Company profile
FY 2010
6. Operating mode
Evolution 2000-2010
Global network per operating mode
(In room number)
Network 2000
Network 2010
497,000 rooms
647,161 rooms
15h
1%
6%
19%
25%
+150,161 rooms
or 30% over 9 years
74%
75%
Owned & Leased
9
Sources: IHG presentations
and annual report
Management
InterContinental – Company profile
FY 2010
Franchise
6. Operating mode
Per region
Regional networks end of December 2010 per
operating mode
(In room number)
Europe, Africa &
Middle-East
Americas
439,375 rooms
Asia & Pacific
86,934 rooms
120,852 rooms
9h
1%
4h
2h
1%
1%
10%
8%
33%
66%
89%
91%
Owned & Leased
Management
Franchise
Americas and EAME  clear focus on franchised hotels
Asia and Pacific  mainly management contracts
10
Sources: IHG interim report
InterContinental – Company profile
FY 2010
6. Operating mode
Per brand, 2010 FY
Brand
11
Hotels
Rooms
InterContinental
171
58,429
Crowne Plaza
388
106,155
Holiday Inn
1,241
227,225
O&L : 4h
Holiday Inn Express
2,075
191,228
O&L : 1h
Staybridge Suites
188
20,762
O&L : 2h
Candlewood Suites
288
28,253
Indigo
38
4,548
HI Club Vacations
6
2,892
100%
Other
42
7,669
66%
Source: IHG’s FY results 2010
Ownership by brand
O&L : 7h
6%
74%
20%
37%
63%
1% 22%
4%
O&L : 1h
InterContinental – Company profile
FY 2010
5% 13%
O&L
Managed
Franchised
96%
O&L
Managed
Franchised
70%
33%
O&L
Managed
Franchised
O&L
Managed
Franchised
77%
1% 29%
O&L
Managed
Franchised
O&L
Managed
Franchised
67%
O&L
Managed
Franchised
82%
O&L
Managed
Franchised
34%
O&L
Managed
Franchised
7. Group strategy
Over the last few years:
Network 2000
3,100 hotels
497,000 rooms
Objectives
Action
Plan
Conclusion
12
–
–
–
–
–
+1,300 hotels and 150,000 rooms
Focus on the lodging industry
Strong acquisition policy
Worldwide and segment-diversified development
Brand value for customers
Network 2010
4,400 hotels
647,000 rooms

“Making best use of our scale to build and grow preferred hotel brands for guests and owners
in high value markets”

Target key markets

Build powerful & distinct brands

Implement best demand delivery systems

Have and aligned and engaged organization, with reduced cost and increased efficiency

Play on 3 levers: Rooms, RevPar, Royalty Rate

The most dynamic player with the biggest pipeline, capitalizing on its brands awareness to
expand in growing markets

Strategy to penetrate massively Asia, and especially China, while continuing development in
key European Countries (UK and Germany in particular)

Emerging globalization of Staybridge Suites and Indigo Hotels brands
Sources: IHG presentations
InterContinental – Company profile
FY 2010
7. Group strategy
Focus on China
13
InterContinental – Company profile
FY 2010
7. Group strategy
Focus on India
14
InterContinental – Company profile
FY 2010
7. Group strategy
Focus on Middle East
15
InterContinental – Company profile
FY 2010
7. Group strategy
Zoom on 2010 key facts
Main facts:
Crowne Plaza transformation :
- 4th largest upscale brand worldwide, fastest growing upscale brand in Asia
- IHG capital to strengthen distribution (key locations, iconic assets)
- Quality drive (c. 40 hotel removals)
- Refresh brand hallmarks
- Drive brand awareness
Holiday Inn relaunch :
- entire estate refreshed (90% Holiday Inn and HI Express now operating under the new
standards)
- new brand extensions (Holiday Inn Club Vacations)
- strengthen brand image and reputation (Olympics sponsorship)
16
Sources: IHG Group at a glance
& FY2010 presentation
InterContinental – Company profile
FY 2010
7. Group strategy
Zoom on 2010 key facts
17
InterContinental – Company profile
FY 2010
7. Group strategy
Zoom on 2010 key facts
18
InterContinental – Company profile
FY 2010
8. Pipeline and lodging development
General overview
Development in previous year
–
In 2010, 35,744 rooms (259 hotels) were added, and 35,262 rooms (260 hotels) removed
Development plan as of 31.12.2010
-
1,275 hotels (204,859 rooms) in pipeline
Hotel Indigo outside Americas : 3 hotels open, 16 hotels in the pipeline, 7 new markets including
Spain, Thailand, Hong Kong and Taipei
Holiday Inn Express in APAC : 18 hotels signings in 2010 taking pipeline to 40, market entry in
India, Japan, Malaysia, Singapore and Taipei
Group Pipeline by Operating Mode
Group Pipeline by Region
Group Pipeline by Brand
4% 10%
5%
5%
35%
56%
44%
20%
50%
27%
29%
15%
Owned & leased
Management
Franchise
Americas
EMEA
APAC
Intercontinental
Holiday Inn
Staybridge Suites
Indigo
Crowne Plaza
Express
Candlewood Suites
A development still focused on Americas and Holiday Inn & Holiday Inn Express
19
Source: IHG 2010 FY
InterContinental – Company profile
FY 2010
8. Pipeline and lodging development
Pipeline at 31.12.2010 per region
Franchise
Management
Mgt.
Americas
EMEA
APAC
890 hotels
102,509 rooms
153 hotels
31,435 rooms
232 hotels
70,915 rooms
3 7 0 11
25 726
24 962
23 117
326
325
1 669
3 798
11 565
9 8 2 6 10 5 0 6
110
1 230
5 325
344
9 359
5 458
298
290
275
6 14 4
5 930
99% Mgt
6 395
5 330
12 8
283
361
1 072
822
A development plan focused on Franchise and Midscale brands in Americas /
Management and Upscale segment abroad
20
Sources: IHG FY 2010
InterContinental – Company profile
FY 2010
8. Pipeline and lodging development
Focus on China
21
InterContinental – Company profile
FY2009
8. Pipeline and lodging development
Focus on India and Middle-East
India
22
Middle East
InterContinental – Company profile
FY2009
8. Pipeline and lodging development
Pipeline at 31.12.2010 per brand
Americas
EMEA
APAC
Extended
Stay
100%
120 hotels
10,506 rooms
101 hotels
10,760 rooms
6%
94%
12%
Limited
Service
18%
70%
13%
494 hotels
57,505 rooms
62 hotels
7,627 rooms
14% 75%
11%
16%
44%
40%
313 hotels
57,505 rooms
Full
Service
19%
66%
123 hotels
38,994 rooms
60 hotels
19,374 rooms
23
15%
Source: IHG FY 2010 results presentation
33% 7%
60%
InterContinental – Company profile
FY 2010
9. Key figures
P&L evolution and forecasts
Financials (in M$)
Revenue
% Change in Revenue
EBITDA
EBITDA margin
Net Profit
Net margin
2007A
1,755
2008A
1,897
2009A
1,538
2010A
1,628
2011E
1,736
2012E
1,858
12.4%
8.1%
-18.9%
5.9%
6.6%
7.0%
646
659
472
552
623
696
36.8%
34.7%
30.7%
33.9%
35.9%
37.5%
417
262
214
293
330
386
23.8%
13.8%
13.9%
18.0%
19.0%
20.8%
CAGR 2007-2010
-2.5%
-5.1%
-11.1%
Sources: company reports and Reuters consensus
estimates as of March 09, 2011
5 000
80%
4 500
70%
4 000
60%
3 500
50%
3 000
2 500
40%
2 000
30%
1 500
20%
1 000
10%
500
0
0%
2007A
2008A
Revenue
24
2009A
2010 A
EBITDA margin
2011E
Net margin
InterContinental – Company profile
FY 2010
2012E
10. SWOT analysis
Strength
Weaknesses
– Very strong brand portfolio with strong brand
image (Intercontinental, Express by HI)
– Strong development plan in emerging countries
such as Russia, China and India
– Strong sales network (Internet, travel agents,
retailers)
– Largest loyalty program: Priority Club Rewards
with 56 million members
– Cash generative, resilient business model
– Weakening share in North America in recent
years due to aggressive expansion of main
competitors such as Marriott and rationalization of
network
– Reliability upon hotel sales within travel and
tourism
– Weak financial performance, with decreasing
revenues
Opportunities
– Development of Internet sales facilities and
marketing activities as opportunities to further
develop revenues through this medium
– Considerable opportunities in emerging regions,
such as Eastern Europe and Asia-Pacific
– Extended stay segment as a fast growing and
profitable segment
26
Threats
– Currency fluctuations particularly in case of a
weak US Dollar. Uncertain Market conditions.
– Threats of competition coming from budget and
economic segments on Holiday Inn Express
brand
– New innovating concepts on the midscale
segment facing ageing Holiday Inn
InterContinental – Company profile
FY 2010
12. Company history
2008
Launch of Holiday Inn Club Vacations
2007
Relaunch program of the Holiday Inn Brand family
2006
Operating JV with All Nipon Airways (ANA), IHG ANA Hotels Group Japan,
2005
Launch of Staybridge UK
2004
Launch of Hotel Indigo
2003
Creation of the InterContinental Hotels Group, listed on the NY- and London Stock Exchange.
The restaurant and pubs part of Six Continents became Mitchells & Butlers plc.
Launch of Candlewood Suites
2001
Acquisition of the European Posthouse chain of hotels (UK and Europe)
Acquisition of the Intercontinental Hong Kong (China, Asia Pacific)
2000
Change of name into Six Continents
Acquisition of Southern Pacific Hotels (Australia) & the Bristol Hotels & Resorts Inc (US)
1998
The Intercontinental Hotel Co
1997
Move to franchise operating model
Launch of Staybridge Suites in North America
1994
Launch of Crowne Plaza (upscale move)
1991
Launch of Holiday Inn Express
1990
Acquisition of the North American Holiday Inn
1988
First move into the hospitality industry with the buying of Holiday Inns International
1977
W. Bass sets up a brewery developing since 1960
1777
27
Birth of the company InterContinental – Company profile
FY 2010
Source: Company website
12. Brands description
InterContinental H&R
Full Service
Crowne Plaza H&R
Holiday Inn H&R
Hotel Indigo
Limited service
Holiday Inn Express
Holiday Inn Club Vacations
Staybridge Suites
Extended stay
Candlewood Suites
28
Source: IHG’s FY results 2010
InterContinental – Company profile
FY 2010
12. Brands description
Full-service – InterContinental Hotels Resorts
Overview
Network
Network
►171 hotels / 58,429 rooms in operation
= 341 rooms per hotel on average
Full-service, luxury and upper-upscale
brand
►InterContinental's global flagship brand, primarily
serving international business and leisure travelers
Locations
►in major cities and resort locations
►Key figures
FY 2010
FY 2009
►ADR: $189
►RevPar: $125
►Occupancy Rate: 66%
► ADR: $179
►RevPar: $112
►Occupancy rate: 63%
►Geographical breakdown
►more than 60 countries
Main competitors
►Sofitel, Westin, JW Marriott H&R, Hilton, Park
Hyatt
33%
34%
33%
EAME
Americas
APAC
29
Source: Company website & reports
InterContinental – Company profile
FY 2010
12. Brands description
Full-service – Crowne Plaza Hotels & Resorts
Overview
Network
Full-service, upscale brand
Network
►Targeting mainly business travelers due to highlevel of business amenities
►“Sleep advantage” programme in North America
and EMEA
►Co-branded ANA Crowne Plaza hotels open in
Japan
►Strong pipeline
►388 hotels / 106,155 rooms in operation
= 274 rooms per hotel on average
►Key figures
FY 2010
►Geographical breakdown
FY 2009
► ADR: $111
► RevPar: $71
► Occupancy Rate: 64%
► ADR: $109
► RevPar: $66
► Occupancy rate: 60%
Locations
►mainly in major getaway cities or in resort
locations
►50 countries
25%
22%
Main competitors
EAME
►Pullman, Sheraton, Doubletree, Renaissance,
Grand Hyatt
53%
Americas
APAC
30
Source: Company website & reports
InterContinental – Company profile
FY 2010
12. Brands description
Full-service – Holiday inn Hotels & Resorts
Overview
Network
Full-service, midscale brand
Network
►The world’s most recognized midscale brand.
Hotels outside the US market are often of a better
range than inside
►1,241 hotels / 227,225 rooms in operation
= 183 rooms per hotel on average
Locations
►no particular area requirements
►Key figures
FY 2010
►ADR: $99
►RevPar: $61
►Occupancy Rate: 62%
Geographical breakdown
►50 countries
FY 2009
► ADR: $95
►RevPar: $54
►Occupancy rate: 56%
Main competitors
►Novotel, Courtyard, Ramada, Hyatt Place
13%
23%
EAME
64%
Americas
APAC
31
Source: Company website & reports
InterContinental – Company profile
FY 2010
12. Brands description
Limited-service – Hotel Indigo
Overview
Network
Limited-service, midscale brand
Network
►Innovative design and concept, targeting mainly
business travelers
►Boutique Hotel brand launched in 2004
►38 hotels / 4,548 rooms in operation
= 121 rooms per hotel on average
Locations
►urban and nearly-urban locations
►Key figures
FY 2010
FY 2009
►ADR: $107
►RevPar: $65
►Occupancy Rate: 61%
► ADR: $106
►RevPar: $58
►Occupancy rate: 55%
Geographical breakdown
►35 hotels in the US
►Increasing international expansion: 62 hotels in
the pipeline, including 5 hotels in APAC and 11 in
EMEA
Main competitors
►Aloft
32
Source: Company website & reports
InterContinental – Company profile
FY 2010
12. Brands description
Limited-service – Holiday Inn Express (1/2)
Overview
Network
Network
►2,075 hotels / 191,228 rooms in operation
= 92 rooms per hotel on average
Limited-service, economic brand
►Key figures
FY 2010
►ADR: $94
►RevPar: $59
►Occupancy Rate: 63%
Geographical breakdown
FY 2009
► ADR: $92
►RevPar: $56
►Occupancy rate: 60%
►73 countries
Main competitors
►Ibis, Hampton, Fairfield Inn
4%
12%
EAME
84%
Americas
APAC
33
Source: Company website & reports
InterContinental – Company profile
FY 2010
12. Brands description
Limited-service – Holiday Inn Express (2/2)
Spin-Off Of A Flagship Brand : case study
 Holiday Inn Express : the most brilliant success of spin-off
 Creation
- Holiday Inn in 1952
- Holiday Inn Express in 1991 (roll out in Europe in 1996)
 Positioning
- Complementary brand to Holiday Inn (full service, midscale) on the economy
segment (limited services)
- Rooms look roughly the same
- Differences in the extent of the hotel’s services and amenities
 Branding
- 2 names used: Holiday Inn Express vs. Express by Holiday Inn outside the US and
the UK
- But current transformation to Holiday Inn Express worldwide
 Existing network (end 2010):
- Holiday Inn Express = 2,075 h. / 191 kr.
- Holiday Inn = 1,241 h. / 227 kr.
 A thriving brand with an incredibly quick development : larger
network than Holiday Inn
34
12. Brands description
Extended stay – Staybridge Suites
Overview
Network
Network
►188 hotels / 20,762 rooms in operation
= 110 rooms per hotel on average
Extended stay, upscale brand
►Key figures
FY 2010
FY 2009
►ADR: $95
►RevPar: $68
►Occupancy Rate: 72%
► ADR: $97
►RevPar: $65
►Occupancy rate: 67%
Geographical breakdown
►In the US and recently launched in the UK
8 countries
Main competitors
►Residence Inn
4%
EAME
96%
35
Source: Company website & reports
InterContinental – Company profile
FY 2010
Americas
12. Brands description
Extended stay – Candlewood Suites
Overview
Network
Network
►288 hotels / 28,253 rooms in operation
= 98 rooms per hotel on average
Extended stay, midscale brand
►Key figures
FY 2010
FY 2009
►ADR: $62
►RevPar: $43
►Occupancy Rate: 69%
► ADR: $66
►RevPar: $42
►Occupancy rate: 64%
Geographical breakdown
►Only in North America
Main competitors
►Suitehotel, Homewood Suites
36
Source: Company website & reports
InterContinental – Company profile
FY 2010