Crowne Plaza Bengaluru Electronics City India Prospects Richard Solomons
India is poised for rapid growth Sustained strong GDP growth Large and growing population India GDP growth actual and forecast 148m households to join middle class by 2020 Total house holds: 228m 273m 322m 1% 3% 16% 7% 31% 46% 83% 66% 47% 2010 2020 2030 Lower Class Middle Class Upper Class Infrastructure development Air travel per capita one of lowest in Asia Improving airport infrastructure Redeveloping Delhi and Mumbai New airports at Hyderabad and Bangalore Modernising 35 non-metro airports by 2012 BUT Infrastructure challenges remain Source: EIU; McKinsey (Household income definitions; lower class - up to 200,000 rupees; middle class 200,000 to 1m rupees and upper class >1m rupees. 2
3 Fuelling growth in an undersupplied hotel market Strong forecast growth in demand Travel and tourism: +8.2% per annum to 2019 Business travel: +7.6% per annum to 2019 Undersupplied market c.100,000 branded rooms one of lowest per capita room rates globally Rooms set to double HVS forecasts 95,000 rooms in 5 years Strong demand for midscale hotels fuelled by growth in middle class Source: WTTC; HVS
4 IHG is building on a leadership position System: 2,191 rooms (12 hotels) - In final stages of eliminating sub-standard properties - >1,200 rooms (7 hotels) removed Current pipeline: 10,223 rooms (45 hotels) - Second largest international branded pipeline* - 50% under construction 48 years experience - Dedicated office in Delhi Strong branding, particularly Holiday Inn - Highest brand awareness in midscale segment Leading system delivery - Largest PCR membership base Sources: *IHG current pipeline, competitor pipeline per STR September 2010; BDRC India
Recent openings driving up quality Holiday Inn Mumbai International Airport 5
Recent openings driving up quality Crowne Plaza New Delhi Okhla 6
7 Future opportunity - up to 150 hotels by 2020 Future development - Focus on major cities - Growing opportunity for portfolio deals - High demand for midscale Holiday Inn - Holiday Inn Express roll-out accelerating growth - Reducing time and cost to market for all brands Resource investment - Re-organisation to increase focus in India - New regional head - Building local core functional expertise - Global Sales Office in 2011 Leveraging IHG s global scale - Access expertise and resources - Build on experience from other emerging markets -e.g. IHG Academy in 2011 =1,295 rooms =2,798 rooms =7,621 rooms =700 rooms System Pipeline
Pipeline hotels driving quality Holiday Inn Pune Hinjewadi 8
Pipeline hotels driving quality Crowne Plaza New Delhi Rohini 9
InterContinental Resort Jiuzhai Paradise, China Summary Richard Solomons
11 IHG s growth strategy to create sustainable value Making best use of our scale to build and grow preferred hotel brands for guests and owners in high value markets Where we play How we win Model Segments Markets Powerful and distinct brands Best demand delivery systems Aligned and engaged organisation Rooms X RevPAR X Royalty Rate
12 What drives our leading share of the global pipeline Long heritage and first mover advantage Powerful and distinct brands Industry leading revenue delivery World s largest loyalty programme, PCR Commitment to strong owner relationships Rigorous site selection and development process Targeted resource investment to drive growth Leading insight
13 Using scale to drive growth our advantages when we enter a new market Existing processes and systems Transferable skills Globally recognised brands Industry leading revenue delivery Rigorous approach to market planning Established risk, safety & governance expertise Global sales teams Loyalty programme Global talent pool Leverage global best practice Web capabilities Distribution channels Experienced owner relationships Industry insight Cash to invest in resources
14 Using our capital to drive growth Invest capital to support brand development inducements and sliver equity brand defining hotels secure multi-site deals using JV positions buy or build brands Funded through recycling existing capital Reduce capital intensity over time
15 How will we drive our share in the future Capitalise on brand strength Focus on the highest opportunity, fastest growth markets Disciplined approach to development to drive profitable growth Use efficiencies in scale markets to fuel growth elsewhere Secure representation in emerging markets Explore opportunities for additional brands Recycle our capital to drive brand growth Consistently grow group margins
InterContinental Resort Jiuzhai Paradise, China Final Q&A