Kevin Kowalski Vice President, Crowne Plaza Brand -0-
Crowne Plaza is a 21 year old brand with two distinct eras Began as a line extension Holiday Inn Crowne Plaza Brand changes to Crowne Plaza by Holiday Inn and back again to Holiday Inn Crowne Plaza Becomes simply Crowne Plaza Explosive growth years including addition of 17 FelCor Properties in 1997/1998 Established with The Place To Meet and The Sleep Advantage 1983 1993 1995-1997 2004 Some stops and starts on strategy slow growth More support, growth and clarity -1-
We compete primarily in the upscale segment US Industry Upscale segment 10 yr trend Growth vs. Prior Year COURTYARD + 25 % RADISSON RESIDENCE INN CROWNE PLAZA GARDEN INN WYNDHAM HOTELS AMERISUITES -25 % Supply Demand Revenues Source: STR -2-
Competitive sets include upper-upscale brands # Hotels # Rooms Westin Marriott Hilton Sheraton Doubletree Crowne Plaza Wyndham Radisson 62 317 216 175 131 87 71 217 32,625 128,968 84,577 64,872 35,936 26,116 22,793 53,679 Upper Upscale Upscale Source: STR Key Key Competitors are are second tier tier Upscale and and Upper Upscale brands Destination be be the the best best performing Brand among this this group -3-
The overall opinion of Crowne Plaza is broadly on par with competitors Overall rating of excellent/very good experience Among past year guests of: Sheraton 61 Doubletree 63 Radisson 65 Crowne Plaza 74 Hilton 79 Marriott 84 0 20 40 60 80 100 Source: Millward Brown, 2003-4-
However, there is opportunity to raise awareness and hence consideration Total Brand Awareness Marriott 100 Hilton 99 Sheraton 99 Raddison 98 Doubletree 86 Crowne 76 0 20 40 60 80 100 120 Source: Millward Brown -5-
Our overall brand strategy focuses on trial as a means of raising consideration and awareness Trial Efficiently Get Them In the Door Meetings Focus Retrial Get Them To Come Back Sleep Experience Max ADR Get More $$ Out of Them Just Common Sense -6-
Our primary target is meeting planners Professional Non - Professional Corporate Third Party Corporate Social 87% female Average age 45 Average 10 years in industry Knowledgeable and demanding Highly variable demographics Most often in administrative roles More likely to be from a sales or marketing function Not knowledgeable -7-
Meetings represent an attractive opportunity $15bn in revenue to the hotel industry 40% of our business Multiple revenue sources Small and efficient marketing target Source: D. K. Shifflet, 2002-8-
Our secondary target is upscale business travelers Profile: 67% male/33% female Average household income $83,000 Average age range 34-55 Average length of stay is 2 nights 70% professional/manager Source: D.K. Shifflet 2004-9-
The brand has a simple promise for its two key audiences Meeting Planners Business Travelers A better meetings experience The Place To Meet A better nights sleep The Sleep Advantage -10-
We set ourselves apart among meeting planners The Crowne Meetings Director: 2-Hour Response Guarantee: Daily Meeting Debrief: -11-
Our meeting planner satisfaction is outstanding 100 90 80 70 Crowne Plaza Brand Index Scores By Quarter 88 88 89 90 Jul - Sep 03 Oct - Dec 03 Jan - Mar 04 Apr - Jun 04 Lodging Hospitality: Chain Leadership Award for Best Hospitality Marketing Campaign Helms Briscoe: Crowne Plaza consistent 2nd on brands they most like doing business with (ahead of everyone but Marriott) Group Demand for 2004 YTD experiencing 15% demand growth, booking pace similar -12-
We deliver a better night s sleep for business travelers Sleep amenities Sleep CD and tips Guaranteed Wake-up call Quiet zones Sleep expert staff training Luxurious new bedding -13-
Guests love the sleep advantage Guest satisfaction Scores - Bedding 90 80 70 60 50 40 30 20 10 0 75 + 13% 85 April '04 August '04 Source: IHG GSTS -14-
Profile of a typical Crowne Plaza Rooms: 250-350 ADR: $94 Occ: 66% RevPAR: $62 Rooms Revenue: $6-9m Non Rms Rev %: 25-35% Total Revenue: $8-12m Build cost/key: $110-140k Location type: Primary Meeting space: 13,000 sq ft % Franchised: 75% -15-
Profile of a typical owner 50% 50% Small private hotel owners REITs and Other Institutional Players Upscale experience/history Own management expertise or hire 3 rd party (e.g., IHG) Some real estate players from outside the hotel industry Some midscale owners trading up Some wholly real estate focused: we manage Others both owners and managers -16-
Both ownership groups invest in Crowne Plaza for the same reasons Attractive, affordable investment Lower up front and operating investment than leading upscale brands Momentum RevPAR growth leading competitive set combined with recent brand focus and program success Best Remaining Choice Major brands have reached market saturation -17-
Strategic priorities going forward Aggressively grow distribution Deliver on our brand promise Continue to drive trial Become industry leaders on pricing and revenue management -18-
Growth strategy for Crowne Plaza Growth Driver Units RevPAR Focus Crowne Plaza is geographically underrepresented and will be one of the few brands available to developers in many locations Flexible fit to wide range of hotel sizes and locations maximises its potential locations Focus is on capturing repeat business from guests who experience the brand through meetings/conferences Royalty rate Pricing on par with competitive set -19-
CP has grown only marginally slower than the upscale segment 140 Crowne Plaza US vs Upscale Segment Growth in Available Room Nights (Index = 100, CAGR with label) Available Rooms Nights per annum (millions) 130 120 110 100 90 Upscale 6.2% CP 5.6% 80 2000 2001 2002 2003 2004 Source: STR; average based on rooms built and converted 1999-2003 -20-
Lower tract coverage than competitors % of tracts containing brand 39% 13% 19% 28% 31% 23% 10% Crowne Plaza Doubletree Hilton Marriott Radisson Sheraton Wyndham Source: STR -21-
Conclusions We have established a well positioned brand for specific key audiences Owners The next best choice among unsaturated brands Guests A clear and differentiated brand proposition for both key audiences We are well positioned for aggressive growth Brand strengths Creative development strategy -22-