TORONTO, CANADA—The mood has been positive here at the Metro Toronto Convention Centre where an estimated 3,600 attendees of InterContinental Hotels Group’s 2006 Americas Investors and Leadership Conference are being reassured by the company’s top executives that the global brand is continuing on an aggressive track to reach a goal pledged last year of being the premier lodging choice of consumers, developers and owners across all of its seven brands. The U.K.-based organization has been in a state of flux since 2000, noted Chief Executive Andrew Cosslett during the conference’s opening general session, bringing to mind the company’s various name changes, demerger, real estate disposals and acquisitions. “But in 2006— finally—we’ve emerged as the standalone, focused organization we wanted to be. One in which everybody is 100% dedicated to the management and franchising of hotels, and nothing else,” Cosslett told the audience. “As a result, the organization is now coming together, it’s starting to flex its muscles and our competitors will have to watch out, as the evidence mounts that the sleeping giant has woken up, and leadership is on our mind.” As testimony to it efforts, the company turned in a strong financial performance in the first half of the year, with a total operating profit of £127 million or $239.5 million (£1=$1.88). Franchised operating profit was up 14% to £117 million or $220.6 million and managed operating profit was up 39% to £43 million or $81.1 million. IHG is also expecting to end the year with a net addition of some 10,000 rooms, which would go toward Cosslett’s objective of growing the company on a net basis by approximately 50,000 to 60,000 rooms by year’s end 2008. Currently, there are 1,028 hotels in the development pipeline with 80% of those anticipated to open by the end of 2008. Cosslett reinforced that China, where IHG is a leading presence, would continue to be a key focal point for development to meet the needs of the expanding travel markets emerging from there. The Americas region also showed strong RevPAR increases, up 11.5%, with continuing operating profit up 21% to $199 million from $164 million in the first half. Stevan Porter, president-The Americas, called on the audience to remember that while performance numbers, increased distribution and financial gain are important, “the currency of the future is people. People taking care of people; not bricks and mortar. Bricks and mortar are still important, especially in our business, but it is people taking care of people that defines us,” he said. Porter suggested that it’s not only guests that must get attention, but staff as well, so they, in turn, can better service a property. “Our competitive advantage is and must continue to be our people,” he said. Toward that, Chief Marketing Officer Peter Gowers exhorted the audience—and corporate staff—to “walk a mile” in their customers’ and colleagues’ shoes to get a better understanding of who they are, what their needs are and how those needs can be met to create a win/win situation for the entire system. “We need to stop following our competition and start following our customers,” he said. Mark Wells, svp/Americas brand performance, who is leading a global study to gain insight into what matters most to guests, told the audience the research will likely lead to “further work on the brand positioning and standards of for each of our brands,” which include Holiday Inn, Holiday Inn Express, Crowne Plaza, InterContinental Hotels and Resorts, Staybridge Suites, Candlewood Suites and Hotel Indigo. For example, there would be a major review of Holiday Inn and Holiday Inn Express to determine similarities and differences and how to leverage the best from each of them. Other changes are expected for brand websites along with some refinements to IHG’s frequent-stay Priority Club program. Enhancements also are in the pipeline on the technology side, including unspecified changes to IH
Stevan Porter President/Americas InterContinental Hotels Group