Robert Radomski Vice President Staybridge Suites & Candlewood Suites Brand Management
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1 Robert Radomski Vice President Staybridge Suites & Candlewood Suites Brand Management
2 The extended stay segment What distinguishes extended stay Three tiers of extended stay Moving from upper to economy Room equipped to be home like (more space, full kitchens) Tiered pricing Reduced housekeeping levels F&B/other services vary by tier Upper (Staybridge Suites) Mid (Candlewood Suites) Economy Longer lengths of stay ADR decreases Lower operating costs/fewer staff Lower development costs per room Different to transient based hotels Relational rather than transactional Local sales focus rather than mass marketing focus Emphasis on revenue per stay instead of ADR 2
3 The key to extended stay operations What it takes Location rich in extended stay demand generators The right owner committed to the business model A proven brand consistently delivered A disciplined approach to finding the right business in the local market How IHG wins Structured demand driven location planning strategy Owner certification programme Consumer insight tested hallmarks and service programs Dedicated local market support, training and tools 3
4 Background to the segment 1975 Jack DeBoer launched the first extended stay hotel under the name Residence Inn The market initially developed in upscale before developing into mid-range and later economy Upscale extended stay was the fastest growth industry segment in each of the last 9 years Few extended stay rooms outside US, demand filled by serviced apartments Industry US branded rooms Industry US branded revenues 1% 8% 1% 7% 91% 92% Staybridge Suites & Candlewood Suites Ext Stay Segment ex IHG All other segments combined Source: Smith Travel Research 2009 data Staybridge Suites & Candlewood Suites Ext Stay Segment ex IHG All other segments combined 4
5 The history of Staybridge Suites IHG launches Staybridge Suites for long-stay travellers in the US 1st upper tier extended stay hotel brand to reach 50 hotels in under 4yrs Reaches 100th hotel opening faster than any other extended stay brand Brand taken international with 2 openings in the UK: Liverpool & Newcastle, and one in Cairo, Egypt The 1 st Staybridge Suites opens in Alpharetta, Georgia, US IHG sells (and manages back) 16 Staybridge Suites to HPT for $185m. HPT also converts 14 other hotels to Staybridge Suites under IHG management. Wins JD Power Award for highest extended stay guest satisfaction in North America 5
6 Expansion into EMEA Preliminary research indicated significant global long stay demand No branded market leader or scale players were present Global design tastes pointed to a slightly modified product Consumer insights showed an upscale preference Initial development focus would be in markets leveraging existing IHG domestic scale and infrastructure 6
7 The history of Candlewood Suites Candlewood Suites founded by Jack DeBoer, the pioneer of the extended stay segment IHG acquires the Candlewood Suites brand from Candlewood Hotel Corporation for $15m First Candlewood Suites opens outside the US in Montreal, Canada 200th hotel opens in Rocky Mount, North Carolina The first Candlewood Suites opens Wichita, KansasUS Wins JD Power Award for highest extended stay guest satisfaction in North America New prototype design debuts featuring a new exterior design and paint scheme, an expanded lobby and environmentally friendly amenities 7
8 Brand history record growth Pipeline hotels Open hotels Q1 10 Source: IHG 8
9 Brand history record growth #2 Overall Top 10 Growth Chains 9
10 Brand history rapid growth Pipeline hotels Open hotels Q1 10 Source: IHG 10
11 11 Significant openings - Abu Dhabi Opened October, 2009 New-build, 165-suite property 4th EMEA opening
12 Significant openings - New York/ Times Square Opened April, 2010 New-build, 310-suite property Staybridge Suites first entry into the New York market 12
13 13 13 Significant openings - New York/ Times Square Opened July, 2009 New-build, 200-suite property First mid-price extended stay hotel in Manhattan
14 Source markets Candlewood Suites Government/military travelers Trainers/training attendees Insurance adjusters Displaced individuals/families Construction/road crews Staybridge Suites Consultants Project teams Trainers/training attendees Temporary medical staffers Relocating families 14
15 Target guest Highly educated and accomplished specialists in their respective fields Trusted advisors to their companies and clients Like balance in their lives Dedicated to, and nurture, their relationships with others They re positive, sincere and kind to everyone, never pretentious or overbearing The neighbour you like Wants to feel comfortable, like a member of the family, not just a guest 15
16 Target guest Enjoy their careers, but are not defined by them Content with their lives Prefer to stick with what they know (and like) and don t go for the frills Like to spend time with their families Knows the value of an honest day s work Trustworthy, competent and reliable Self-Sufficient Travellers Want to feel trusted and free to do what they want because they ve got their own space 16
17 17
18 Brand hallmarks Studio Suite (375 sq. ft.) Two-bedroom-Twobathroom Suite (765 sq. ft.) One Bedroom Suite (500 sq. ft.) 18
19 Brand hallmarks Americas Europe, Middle East 19
20 Brand hallmarks Americas Europe, Middle East 20
21 Brand hallmarks 21
22 Brand hallmarks 22
23 Brand hallmarks Studio Suite (376 sq. ft.) One Bedroom Suite (525 sq. ft.) 23
24 Brand hallmarks 24
25 Brand hallmarks 25
26 Brand hallmarks 26
27 Guest service focus Emphasis on bringing in the right hotel team members Hotel teams are like family to guests Guest focused branded service programs Staybridge Spirit Candlewood Can-Do Service 27
28 External recognition Highest Guest Satisfaction among Extended Stay hotel Chains 2004: Candlewood Suites 2009: Staybridge Suites 28
29 Driving guest preference - growing guest satisfaction Candlewood Suites 12m rolling OSAT score indexed from Staybridge Suites 12m rolling OSAT score indexed from 100 Source: IHG 29
30 Feedback Video 30
31 Driving owner preference - improving system delivery 23% 8% 55% 38% 58% 11% 69% 17% 51% 17% 28% 25% Other IHG channels IHG websites Hotel direct excl PCR Other IHG channels IHG websites Hotel direct excl PCR Source: IHG rooms revenue at 2009 constant USD rates 31
32 12m rolling %pt change RevPAR Index Higher guest & owner satisfaction- RevPAR outperformance 7 6 RevPAR Index 12m rolling %pt change Source: STR Global. RevPAR compared to a defined local competitive set 32
33 12m rolling %pt change RevPAR Index Higher guest & owner satisfaction - RevPAR outperformance RevPAR Index 12m rolling %pt change Source: STR Global. RevPAR compared to a defined local competitive set 33
34 Global pipeline share (rooms) Future growth - largest pipeline share 30% Share of global extended stay pipeline 25% 20% 15% 10% 5% 0% Marriott - Residence Inn Candlewood Suites Staybridge Suites Hilton - Homewood Suites Marriott - TownePlace Suites Hyatt Summerfield Source: STR Global April
35 Future growth market focus Candlewood Suites Grow North American distribution Staybridge Suites, Beirut in targeted secondary markets Staybridge Suites Target further primary US cities Further roll-out into EMEA Opportunity in Latin America 35
36 Summary Significant distribution growth Demonstrates IHG s ability to add and grow new brands Industry leading pipeline including expansion outside the Americas Well defined product, consistently executed Growth in guest satisfaction scores JD Power external recognition Delivers owner satisfaction Consistent RevPAR outperformance Low development cost Efficient operating model high returns IHG system delivery 75%+ 36
37 Q&A New Candlewood Suites Exterior Design 37
38 Robert Radomski Vice President Staybridge Suites & Candlewood Suites Brand Management
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