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InterContinental Hotels Group___

Expansion Policy



What is your policy to strengthen your company worldwide?



InterContinental Hotels Group is the largest hotel Group in the world by number of rooms with 3,606 hotels and 537,533 rooms across seven brands – InterContinental, Crowne Plaza, Holiday Inn, Express by Holiday Inn, Indigo, Staybridge Suites and candlewood Suites. Our policy is to focus growing our brands in our key markets of The US, UK and China.



We have made a commitment to add 50,000 to 60,000 rooms to our system on a net and organic basis by the end of 2008. Within this total we include a commitment to have 125 hotels open in China by the end of 2008 – at the moment we have 51 open in

this key market.



In total, we have over 880 hotels in our development pipeline, by far the largest in the industry.



We aim to grow the business by managing and franchising our strong stable of brands and not by owning the hotels. Of our portfolio of over 3,600 hotels we own less than 30. We will use our strong brands and our strong operating system – that is the way we drive demand into our hotels through websites (holiday-inn.com has over 75 million site visits a year), our sales teams and our loyalty scheme, Priority Club Rewards, which has over 26 million members to grow our portfolio.



What are the main obstacles – benefits in expanding your brand?



The main obstacles for growing our brands is the demand for talent – in growing by 50,000 – 60,000 net rooms we need to find high quality teams to staff the hotels. In China for example we are looking at hiring another 20,000 staff to add to the 17,000 we already have – our challenge is to ensure we are attractive to them and that they want to work for IHG – as the world’s leading hotel company and with strong consumer brands such as Holiday Inn, Crowne Plaza and InterContinental, we are sure we can achieve this.



Which destinations have more dynamic potentials?



As above – we are targeting our growth in China, the UK and the US. China is set to become the worlds largest inbound tourism destination in the next 10-15 years with over 180 million trips a year (overtaking the US) it will also provide 100 million outbound trips a year (it currently provides 10 million) These are compelling reasons to grow our brands in China.



How did your company expand the previous decade and where are you going to invest in the next decade?



In the next decade we will look to expand but not spend to do so. By growing using the franchise and management contract business model, we access the capital of our partners who own the hotel and we then manage or franchise our brands to them. Our development pipeline of over 880 hotels at the moment represents over $10 billion of other people’s money that is being spent on our behalf to develop hotels that will fly our flags.



Financial Results

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