Hotel Indigo. Janis Cannon, Vice President Indigo Brand Management. June 2010
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1 Hotel Indigo Janis Cannon, Vice President Indigo Brand Management June
2 Creation of the brand Research revealed new psychographic trends Emergence of the lifestyle consumer Middle market desires becoming more aspirational Demand for affordable style and design Desire for something less beige and cookie-cutter Niche potential IHG had a clear opportunity to sell new brand to US owners Created a high ROI brand through low cost operating model with an upscale ADR No existing boutique hotel backed by a global system Brand ideology allows for flexible development options US growth opportunity determined to be significant 2
3 Prototypical Unique unit offering Boutique Hotel Indigo the first global branded boutique Midscale Price point Luxury 3
4 The creation and growth of the Hotel Indigo brand IHG identifies the potential for new brand in the US market 1 st Hotel Indigo opens in Atlanta, GA with prototypical design elements 1 st hotel opens outside the US in Paddington, London IHG develops strategy to accelerate growth into high RevPAR markets, building Hotel Indigo in San Diego, CA for $65m Brand conceived in conjunction with a review of consumer trends and IHG brand portfolio opportunities Concept is refined and Interpret Indigo platform is introduced in Scottsdale, AZ 1 st Asian hotel is signed into the pipeline on the Bund in Shanghai Global brand team formed 4
5 Rapid growth to date Q1 '10 Pipeline hotels Open hotels Source: IHG 5
6 Flexible design concept Adaptive reuse e.g. San Antonio, TX Mixed use Asheville, NC Conversion Vernon Hills, Chicago, IL New build - San Diego, CA Development opportunities not found with other brands 6
7 Significant openings Hotel Indigo San Diego, CA - new build 7
8 Significant openings Hotel Indigo London, England - conversion 8
9 Significant openings Hotel Indigo San Antonio at the Alamo, TX adaptive reuse 9
10 Significant openings Hotel Indigo Chelsea, NY new build New build Opened October 2009 Franchised Downtown Manhattan 16 floors 122 total guest rooms - includes 2 suites 1 meeting room Pet friendly 10
11 Scaling the global opportunity Proportion of people with right attitude & personality Proportion of people at chosen price point X = Hotel Indigo global segment size c.6% of total hotel rooms demand Those specifically attracted to Hotel Indigo vs. other places to stay What they will pay vs other hotels in the same market Key city strategy 11 Source: IHG
12 Evolving the brand for global roll out Target guest: Broadly traveled Wants new, different experiences In search of inspiration from their hotel stay Appreciates vibrant design Enjoys keeping up with fashion & style Prefers low key service levels Not impressed by exclusive clubs or interested in the cool-factor Appreciates the benefits and amenities of a known brand, but likes the unique experiences and style found at boutique hotels 12
13 Key guest insights Neighbourhood Story Neighbourhood Story Inviting Environment Vibrant & Fresh Inspired Design Service Vibrant & Fresh Design Curious and wants to be inspired by travel and new things Wants to be seen as modern and current among peer group 13
14 Local murals / images Inspired Service Vibrant & Fresh Design Neighbourhood Story Nashville, TN San Jose, Costa Rica 14
15 Use of vibrant colour Inspired Service Vibrant & Fresh Vibrant & Design Fresh Design Ontario Rancho Cucamonga, CA San Diego, CA London Paddington, UK indianapolis, in 15
16 Spa-inspired bathrooms Vibrant & Fresh Design Chelsea, NY Boston Newton, MA 16
17 Inspired service Inspired Service * Source: IHG 2009 employee survey 98%* of Hotel Indigo employees are proud to work at their hotel 17
18 Driving owner preference improving system delivery 38% 22% 55% Rooms revenue delivered through PCR has increased from 25% to 36% over the same period 40% 24% 21% IHG other channels IHG Websites Hotel direct excl PCR Note: Constant USD rates (2009); Sales captured in all channels Source: IHG rooms revenue at 2009 constant USD rates 18
19 Recent external recognition awards 2010: Entrepreneur Magazine names Hotel Indigo as Best Value Hotel Chain, in 2010 Value Award Names Hotel Indigo Athens, GA Hospitality Design s 2010 winner in hospitality debut category Lodging Hospitality design award World Travel Award 2010 nominee for North America s Leading Green Hotel Finalist for ED&C magazine s Excellence in Design Award 19
20 Recent external recognition guest feedback Video 20
21 Future growth global pipeline Americas: 46 hotels EMEA: 4 hotels Asia Pacific: 2 hotels Source: IHG as at 31 March 2010 Global Q1 pipeline = 52 hotels, 2 pipeline additions since (Close to signing 16 further deals globally) 21
22 Future growth - pipeline highlights Shanghai on the Bund 22
23 Future growth - pipeline highlights Glasgow, Scotland 23
24 Future growth - pipeline highlights Vancouver, Canada 24
25 Owners Guests Summary The concept behind Hotel Indigo is to incorporate the positive attributes of boutique and franchised Brandedbranded hotels for both guests and Boutique franchisees Trust Certainty of experience Guests trust the quality due to brand name Confidence in consistency of brand standards Loyalty through Priority Club Rewards Access to reservation systems Experiential Benefits Design cache Invites personal interaction with hotel staff Creates loyalty by anticipating guest needs Intrigues guests with engaging story Functional Benefits Brand integrity Low cost operating model IT Infrastructure/Revenue Generating Systems Priority Club Rewards Global Sales Organisation Flexibility and Premium Pricing Delivers upscale ADRs Flexible design concept Enables relationship building with guests Large global potential due to strong appetite from owners and guests 25
26 Q&A 26
27 Hotel Indigo Janis Cannon, Vice President Indigo Brand Management June
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