Driving global growth

Transcription

1 Holiday Inn, Manhattan Financial District Driving global growth Paul Edgecliffe Johnson Group CFO

2 IHG has a consistently executed, winning strategy for high quality growth Value creation: superior shareholder returns Value creation: Superior shareholder returns Over $10.5bn returned since 2003 Winning Model Targeted Portfolio Attractive markets Highest opportunity segments Managed & franchised model >95% of profits ~85% linked to hotel revenue Disciplined execution - Scale and efficiency of operations - Investment in developing great talent and technology platforms - Commitment to responsible business practices 2

3 IHG has transitioned to a strong growth asset light model with the highest quality of earnings Earnings contribution by business model 1 Fee revenue progression ($bn) 2 4% +8% % % % Owned & leased Fee business 1 Pro-forma for sale of InterContinental Paris Le Grand and InterContinental Hong Kong 2 Group revenues excluding owned and leased hotels, managed leases, and significant liquidated damages 3

4 We aim to address all scale development opportunities through our brand portfolio Luxury Price Point Midscale Wellbeing Family Time Romantic Getaway Short Break Experience Rest & Go Mixing Business with Pleasure Business Productivity Building Business Interactions Social Identity 4

5 Growth focus is on 10 priority markets to optimise margins and profitability Current and expected industry room revenue ($bn) 32 By 2020 these 10 markets are expected to generate >$90bn room revenue growth 75% of total industry 4.6% per annum growth USA G. China Middle East Germany UK Canada India Russia/CIS Mexico Indonesia Sources: STR, Oxford Economics, McKinsey and IHG

6 Focused execution has driven increasing scale in our priority markets nearly 90% of total room supply IHG open + pipeline rooms (k) at Q % IHG total USA % Greater China % UK 50 5% Middle East 32 3% Canada 28 3% Mexico 25 3% Germany 19 2% India 14 1% Russia / CIS 12 1% Indonesia 10 1% Priority markets total % 6

7 Accelerating signings pace has driven our highest ever number of pipeline rooms under construction Nearly 30% growth in global pipeline since ~100k rooms under construction, the highest in our history 14% of global industry pipeline vs. 5% of supply 1 IHG pipeline rooms by region (k) Americas % Europe % 2012 Q AMEA G. China % 2012 Q Q % 2012 Q As reported at Q

8 Consistent focus has led to an industry leading growth position in all priority markets IHG rooms total pipeline share and rank by market 1 Canada Share 14% Rank 3 US Share 14% Rank 3 UK Share 9% Rank 2 Russia/CIS Germany Share 15% Share 22% Rank 3 Rank 1 Middle East Share 10% Greater China Share 19% Rank 1 Rank 2 India Mexico Share 15% Rank 2 Share 17% Rank 1 Indonesia Share 10% Rank 2 Priority markets pipeline share = 15% vs. supply share = 7% 1 As at H industry data sourced from Smith Travel Research. 8

9 Crowne Plaza, Times Square Manhattan Driving Americas growth Elie Maalouf Americas CEO

10 Introduction and early reflections Special culture and talent focus Improving guest experience highest ever guest satisfaction scores Meeting changing guest needs design innovation and new brands Technology systems drive results 70%+ system delivery Industry leading operational expertise Strong and established relationships with all types of owners 10

11 US supply / demand dynamics remain favourable Long-term growth in consumer spend on lodging has exceeded GDP growth by 2% p.a. Demand in the US has reached new records in 2015 H1 occupancy rates above previous high in Supply growth remains below long-term average (2.0%-2.5%) STR 2015 forecast of 1.2% STR US industry average change in supply, demand and RevPAR per annum 1990s cycle vs. current cyle 1 6.8% 6.1% 4.5% 4.2% 2.4% 2.6% 2.4% 0.8% 1.4% Supply Demand RevPAR Supply Demand RevPAR Supply Demand RevPAR (F) 1 Actual and forecast data sourced from Smith Travel Research. 11

12 Our established scale and focused development strategy positions IHG well for growth Holiday Inn brand family is leading the US industry for new openings US new openings FY 2014 (k) 1 Growth in signings pace demonstrates momentum behind all brands IHG Americas Q3 YTD signings (k) % Holiday Inn brand family Hampton Inn Hilton Garden Inn Courtyard Fairfield Inn Industry data sourced from Smith Travel Research. 12

13 IHG has the breadth of brands to continue developing leading scale across the region Americas pipeline as at Q Rooms (k) As % of IHG open rooms Luxury / upscale Boutique Mainstream Extended stay Excludes PAL (Privatised Army Lodgings) 13

14 We grow our scale through targeted brand deployment by geography US major city 1 brand mix US non-major city 1 brand mix 11% 14% 7% 2% 28% 51% 9% 77% Luxury / upscale Boutique Mainstream Extended stay 1 Major cities are the top 20 cities for IHG; non-major cities represents all other locations. 14

15 New York is our #1 key city to penetrate in the US Open rooms PL rooms Nearly 50 open and pipeline hotels in central New York , , , Portfolio approach all nine IHG US brands represented Largest capital market in the country presence supports access to funding Major gateway city - representation critical for brand awareness Largest single city opportunity - $9bn rooms revenue / 7% of US market 2 Highest US RevPAR and fees per room 2 - Occupancy 85%+ and rate $ As at Q Based on FY 2014 Smith Travel Research data. 15

16 IHG s approach to growth in New York has led to market out-performance IHG approach to New York New York: IHG room growth vs. industry from 2012 to H Utilise experience but evolve approach 29% Increased development and real estate market expertise 13% Build lasting relationships with owners and funding partners Strategically offer capital options - $106m invested ($85m recyclable) 1 16% 10% Portfolio approach to meet different location and guest needs 1 As at Q excluding InterContinental New York The Barclay IHG Kimpton Industry Underlying 16

17 Growth in New York is being supported by a number of new halo assets Hotel Indigo Lower East Side Opening: Q EVEN Hotel Times Square South Crowne Plaza West 36 th Street Opening: Q Opening: 2017/2018 A brand defining hotel in a typically boutique neighbourhood Milestone property showcasing our innovative wellness brand A flagship property focused on making business work 17

18 And properties which give great representation for our brands InterContinental New York The Barclay Eventi, a Kimpton Hotel Holiday Inn 8 th Avenue Re - opening: 2016 Opened: May 2010 Opened: October 2015 A landmark prestige property for the world s largest luxury brand A unique hotel with a constant buzz and innovative dining options Brand new 35-storey property in central Manhattan with spectacular views 18

19 Staybridge Suites, Times Square Q&A

20 Biographies Paul Edgecliffe-Johnson - Group Chief Financial Officer Paul Edgecliffe-Johnson joined InterContinental Hotels Group (IHG) in August Paul has since held a number of senior leadership positions including leading Investor Relations, Global Corporate Finance, Group Financial Planning and Analysis, Global Tax, Development for EMEA, Chief Financial Officer for Europe, Asia, Middle East and Africa and served in 2010 as Interim Regional President of EMEA. Since January 2014, Paul has been a member of the Executive Committee and Board in his role as Group Chief Financial Officer. Paul now leads the Global Finance organisation for the Group and is responsible for corporate and regional finance, Group financial control, investor relations, tax, treasury, commercial development and procurement. Elie Maalouf - CEO, The Americas Elie Maalouf is CEO of The Americas at InterContinental Hotels Group (IHG) and was appointed to the role in February 2015 to lead the management, growth and profitability of the company s largest operating region. Previously, as Senior Advisor with McKinsey & Company, Elie worked with travel, hospitality and real estate clients and partners on global projects in North America, Asia, Latin America and AMEA. Prior to that, Elie held a range of positions at HMSHost Corporation, a global travel and leisure developer and operator of food and retail, located in more than 14 countries around the world. Elie s roles included Executive Vice President of Food and Beverage Operations and Senior Vice President of Business Development, before becoming President and CEO for six years. Robert (Bob) Chitty Senior Vice President, Global Corporate Finance Bob Chitty is Senior Vice President, Global Corporate Finance at InterContinental Hotels Group (IHG), responsible for IHG s major capital investments and recycling. Bob most recently served as Senior Vice President, Corporate Investment & Transactions, for the Americas region of IHG and was responsible for monitoring IHG s capital investment in hotels, negotiating complex deal transactions, managing relationships with major equity and debt providers. He also served as Senior Vice President, Corporate Finance and Upscale Development and was responsible for implementing IHG s strategy of expanding rooms distribution, primarily of IHG s upscale brands in North America. Prior to that, Bob was Vice President, Asset Disposal, for IHG, where he focused on executing IHG s asset light strategy. 20