Annual Review and Summary Financial Statement · PDF file2 IHG Annual Review and Summary...

Annual Review and Summary Financial Statement 2012

Overview 1 About us 2 Where we compete 3 Our business model and key facts 4 Chairman’s Statement 6 Chief Executive’s Review 8 Implementing our strategy 10 Our business model and

revenue delivery systems

How we win 12 Brands 14 InterContinental Hotels & Resorts 16 Holiday Inn brand family 20 Crowne Plaza Hotels & Resorts 22 Hotel Indigo 24 Staybridge Suites 26 Candlewood Suites 28 HUALUXE Hotels & Resorts 29 EVEN Hotels 30 People 32 Delivery 34 Responsible Business

Where we compete 38 The Americas 39 Europe 40 Asia, Middle East and Africa (AMEA) 41 Greater China

Facts and figures 42 Summary Financial Statement 46 The Board of Directors and

Executive Committee 48 Summary Directors’ Report 49 Corporate governance 50 Summary Directors’

Remuneration Report 58 Investor information 59 Financial calendar and Contacts

This page Hotel Indigo Xiamen Harbour, China

Front cover Holiday Inn London-Stratford City, UK

People

Delivery

Responsible Business

Our Brands represent a promise to our guests and it is our talented and passionate People that bring each brand to life and thereby deliver Great Hotels Guests Love.See pages 30 and 31 for information on our talented People

Our best-in-class Delivery systems enable us to leverage our scale to build guest preference for our Brands and drive reservations and revenue to our hotels.See pages 32 and 33 for information on our best-in-class Delivery systems

IHG is committed to conducting business in a responsible way and this underpins each of our strategic priorities. Championing and protecting the trusted reputation of IHG and our Brands is not just the right thing to do, but it makes great business sense too.See pages 34 to 36 for information on our Responsible Business practices and corporate responsibility matters, and pages 48 to 57 for information about our Board of Directors and Executive Committee and our governance processes

Brands

We have a high-quality portfolio of nine preferred Brands from luxury hotels in the world’s major cities and resorts to family-orientated hotels that offer great service and value and the world’s first and largest hotel loyalty programme.See pages 12 to 29 for more information on our preferred portfolio of Brands

We are a global hotel business with nine preferred Brands. With over 4,600 hotels and nearly 676,000 rooms in nearly 100 countries and territories around the world, we know hospitality. Our Vision is to become one of the great companies in the world by creating Great Hotels Guests Love. We will deliver this through our portfolio of preferred Brands, our talented People and best-in-class Delivery systems. At the heart of our culture is a commitment to act responsibly in everything we do.

About us

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About us 1

Where we compete

We have over 4,600 hotels and nearly 676,000 rooms internationally. When people travel, they look for hotel brands they trust. Operating our preferred Brands to global standards increases guest demand for the hotels we franchise, manage and own in nearly 100 countries and territories around the world.

The Americas Europe

Asia, Middle East and Africa (AMEA) Greater China

Hotels Rooms

InterContinental 53 17,756 CrownePlaza 183 48,730 HolidayInn* 820 146,661 HolidayInnExpress 1,931 168,398 HotelIndigo 37 4,307 StaybridgeSuites 183 19,787 CandlewoodSuites 299 28,675 Other 49 15,303 TotalforTheAmericas 3,555 449,617 Totaldevelopmentpipeline 670 72,573* Includes10HolidayInnClubVacations(3,701rooms)and17HolidayInnResort

properties(4,240rooms). Findoutmoreonpage38.

Hotels Rooms

InterContinental 30 9,394 CrownePlaza 84 19,566 HolidayInn* 288 46,610 HolidayInnExpress 212 24,903 HotelIndigo 10 949 StaybridgeSuites 4 605 TotalforEurope 628 102,027 Totaldevelopmentpipeline 91 15,184* Includes3HolidayInnResortproperties(362rooms). Findoutmoreonpage39.

Hotels Rooms

InterContinental 65 20,791 CrownePlaza 65 18,559 HolidayInn* 75 17,440 HolidayInnExpress 12 2,877 StaybridgeSuites 2 304 Other 13 2,766 TotalforAMEA 232 62,737 Totaldevelopmentpipeline 132 30,357* Includes14HolidayInnResortproperties(3,311rooms). Findoutmoreonpage40.

Hotels Rooms

InterContinental 22 9,373 CrownePlaza 60 21,452 HolidayInn* 64 20,777 HolidayInnExpress 37 9,453 HotelIndigo 3 405 Other 1 141 TotalforGreaterChina 187 61,601 Totaldevelopmentpipeline 160 50,916* Includes3HolidayInnResortproperties(893rooms). Findoutmoreonpage41.

2 IHG Annual Review and Summary Financial Statement 2012

We run hotels in three ways: franchised, managed and owned. Our asset-light business model means we own just 10 hotels* (less than one per cent of our portfolio). Most of our hotels operate under a franchise agreement or are managed by IHG on behalf of owners. All of our hotels are supported by our revenue delivery systems and marketing programmes, which drive business to our hotels.See pages 8 to 10 for more information on our business model

Our business model

*Asat31December2012. †Includesonesignificantliquidateddamagesreceiptin2012of$3minTheAmericas.

Key facts*

4,602hotels

$115mEurope

$614m†

Group

3,934hotels franchised

658hotels managed

10hotels owned and leased

$486m†

The Americas$88mAMEA

$81mGreater China

Operating profit before exceptional items

675,982rooms

CrownePlazaToulouse,France InterContinentalDanangSunPeninsula,Vietnam InterContinentalThePalazzo,LasVegas,US

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Where we compete, Our business model and Key facts 3

InmyfirstfewmonthsaftertakingoverfromDavidWebster,IamdelightedtosharemyperspectiveandimpressionsofourCompany.SinceIjoinedinJanuary,Ihavespentmuchofmytimegettingtoknowthebusinessbetter–meetingwithemployees,shareholders,ownersandguestsandvisitingouroperationsaroundtheworld.

SeveralthingshavestruckmeasanewcomertoIHG.Thisisabusinesswithaclearstrategyandaconsistenttrackrecordofimplementationthroughoutits10-yearhistory.ThereisafocusacrossthewholeorganisationoncreatingBrandsthatarepreferredbybothourguestsandowners,andattheheartofthisisthePeople.Ihavebeenparticularlyimpressedbytheskills,commitmentandenergyofallthoseI’vemet,whoeitherworkinIHG’scorporateofficesorinoneofIHG’shotels,andonbehalfoftheBoard,IwouldliketothankallourPeoplefortheirfocus,dedicationandcommitment.Lastly,theintegralrolethatResponsibleBusinesspracticesplayinIHG’sstrategyisunderpinnedbyastrongsetofvaluesanduniquecultureseenacrossthebusiness.

Performance

IHG’sstrongperformancein2012demonstratestheeffectivenessofourstrategy,despitethechallengingeconomicenvironment.Weconverted4percentrevenuegrowthintooperatingprofitgrowthof10percent(beforeexceptionalitems)andadjustedearningspersharegrowthof9percent.

Wecontinueourlongtrackrecordofdividendgrowthforshareholders,withtheBoardrecommendinga10percentincreasetothefinaldividendfor2012,takingitto43.0cents(27.7pence).Thiswillgiveafull-yeardividendof64.0centspershareup16percenton2011.Thisconvertstoasterlingfull-yeardividendof41.2pencepershare,up19percenton2011.Subjecttoshareholderapproval,thefinaldividendwillbepaidon31May2013.

Financial position and shareholder returns

Weremaincommittedtoanefficientbalancesheetwhilemaintaininganinvestmentgradecreditratingthroughthecycle.Duringtheyearweannounceda$1billionreturnoffundstoshareholders,splitbetweena$0.5billionspecialdividendwithshareconsolidationanda$0.5billionsharebuybackprogramme.Thespecialdividendwaspaidon22October2012and$107millionofshareshadbeenboughtbackbyyearend.Oncethesharebuybackprogrammeiscomplete,totalfundsreturnedtoshareholderssincethe2003demerger,excludingordinarydividends,willamountto$7.6billion.

Year-endnetdebtof$1,074millionwasup$536millionon2011,reflectingthisreturnoffundstoshareholders.Nevertheless,thebusinesscontinuestobestronglycashgenerative,withfreecashflowof$463million,up10percenton2011.InNovember2012weissueda£400million10-yearbond,diversifyingoursourcesoffundingandextendingouraveragedebtmaturity.

Board

DavidWebsterretiredattheendof2012,havingservedonIHG’sBoardsincetheoriginallistingoftheCompanyinApril2003andasChairmansinceJanuary2004.DuringthisperiodIHGhasexecutedthemovetoanasset-lightbusinessmodel,grownnetroomcountbyover25percent,whilstsuccessfullycompletingtherelaunchoftheHolidayInnbrand.Wethankhimforhisinvaluablecontributionandwishhimahappyandfulfillingretirement.

GrahamAllanlefttheBoardon15June2012,followinghisappointmentasChiefOperatingOfficerofDairyFarmInternationalHoldingsLimitedbasedinHongKong.IwouldliketothankGrahamforhiscontributionsasanindependentNon-ExecutiveDirectorandasamemberoftheAudit,NominationandCorporateResponsibilityCommittees.WeareintheprocessofrecruitinganewNon-ExecutiveDirectortoreplaceGraham.

DaleMorrison,whohasbeenaNon-ExecutiveDirectorsinceJune2011,wasappointedtotheCorporateResponsibilityCommitteeinNovember2012.ThisaddstohisexistingrolesontheAuditandNominationCommittees.

Chairman’s Statement

I feel privileged to be the Chairman of IHG, a company with an impressive history and successful track record of driving superior returns for shareholders. My fellow Board members and I look forward to guiding IHG to even greater achievements as we focus on brand building and the strategic global expansion of the business in the near term and future.


Governance

IHGiscommittedtohighstandardsofcorporategovernance;webelievegoodgovernanceisafundamentalpartofbeingaResponsibleBusinessandunderpinseverythingwedo.Thisyear,weagaincommissionedaformalevaluationoftheperformanceoftheBoardfromanindependentconsultant.The2012feedbackconfirmedthattheBoardandeachofitsCommitteescontinuetooperateeffectivelyandthateachDirectorcontinuestomakeaneffectivecontributionandretainsastrongcommitmenttotherole.

Furtherinformationonourgovernancepracticescanbefoundonpages46to49.

Outlook

Thereisnodoubtthattheglobaleconomywillcontinuetoseechallengesintheyearahead.IHG’sprovenstrategy,resilientbusinessmodel,portfolioofpreferredBrands,talentedPeopleandstrongbalancesheetgiveustheconfidencethatthebusinesswillcontinuetoperformwellintothefutureanddeliverlong-termvaluetoallstakeholders.

PatrickCescauChairman

+5% total gross revenue from hotels in IHg’s system to $21.2bn*

Revenue up 4%† to $1,835m†

$614m† Operating profit before exceptional items group $614m† (2011 $559mt) the americas $486m† (2011 $451mt)Europe $115m (2011 $104m)asia, middle East and africa $88m (2011 $84mt) greater china $81m (2011 $67m)

+6.8% Fee revenuez

driven by 5.2% RevpaR growth and 2.7% net system size growth

+5.2%Revenue per available room∞

total number of rooms operating under IHg brands 675,982 (4,602 hotels)

+16%: 64.0¢total full-year dividend sterling equivalent of 41.2p

8.4mnew priority club Rewards members added total priority club Rewards members 71.4m 69% of rooms revenue delivered through IHg’s channels or by priority club Rewards members direct to hotel

*Totalroomrevenuefromfranchisedhotelsandtotalhotelrevenuefrommanaged,ownedandleasedhotels(notallattributabletoIHG).† Includesonesignificantliquidateddamagesreceiptin2012of$3minTheAmericas.t Includestwosignificantliquidateddamagesreceiptsin2011;$10minTheAmericasand$6minAsia,MiddleEastandAfrica.z�Grouprevenueexcludingownedandleasedhotels,managedleasesandsignificantliquidateddamages.Growthstatedatconstantcurrency.∞TotalSystemroomsrevenuedividedbythenumberofroomnightsavailable.

crowne plaza London-the city, uK

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Chairman’s Statement 5

How we win

Ourwellestablished,asset-lightstrategyhasenabledustodelivergoodrevenueandprofitgrowthagainthisyear,despitethecontinuedchallengesinthewiderglobaleconomy.AtthecoreofthisstrategyliesthethirdpartyownersofIHGbrandedhotels.AtIHGwehaveauniquecompetitiveadvantage,whichisthestronganddeeprelationshipthatwehavewithourowners,primarilythroughtheIHGOwnersAssociation.Thiscollaborationenablesustoworkcloselywithourowners,tapintotheircombinedexpertiseandtakeactionmorequicklyandeffectivelythanourcompetitors.

Aswemoveintoour10thyearasastand-alonelistedcompany,wecanbeproudofourrecordofdeliveryaswecontinuetogainmarketshare,leveragingourscaletogrowmargins,profitsandcashflow.Thishasenabledustocontinuetoreinvestinourbusinesswhilstsimultaneouslyreturningsignificantsumsofsurpluscashtoshareholdersandgeneratingsuperiorshareholderreturns.InAugust2012weannounceda$1billionreturnoffundstoshareholderscontinuingourlongtrackrecordofreturns,withtotalfundsreturnedtoshareholderssincethe2003demerger,includingordinarydividends,ofaround$9billion,almosttwicethemarketcapitalisationoftheGroupwhenwelisted.

WewillcontinuetodrivethebusinessforwardthroughourpreferredBrands,talentedPeopleandbest-in-classDeliverysystems,allunderpinnedbyourcommitmenttoResponsibleBusiness.In2012wecontinuedtooutperformtheindustrywithstrongRevPARgrowth,with

particularoutperformanceinourtwolargestmarkets,theUSandGreaterChina.Importantly,inspiteofthelimitedavailabilityofcapitalinmanymarkets,weincreasedthenumberofroomsoperatinginourSystemby2.7percent.This,combinedwithhealthyRevPARgrowthiswhathasenabledustogrowourfeerevenuesostrongly.

Preferred Brands

OurpreferredBrandsareattheheartofourbusinessandarekeytoourcontinuedsuccessindrivingstrongresults.Ourbrandsarealreadysomeofthemostrecognisedintheindustrybutwecontinuetoinnovateanddevelopthemtomeetchangingguestneedsandtostayaheadinacompetitivemarketplace.

Wearedelightedtohavelaunchedtwonewbrandsin2012;HUALUXEHotels&ResortsinChinaandEVENHotelsintheUS.HUALUXEhashadaparticularlystrongstartwith15signingsintheyear.Eachofthesebrandshasbeencreatedthroughadeepunderstandingofthetrendsinthelodgingmarketplacecombinedwithgenuineinsightintoguestoccasionsandneeds.Theyhavebeendesignedtomeetaneedwhichwefeelisunderservedinthemarkettodayandwhichcandeliversignificantrevenueandprofitopportunitiesoverthelongerterm,inourtwolargestmarkets.IHG’ssignificantexpertiseinboththesemarketsandthescaleofouroperationsenabledustolaunchthesetwonewbrandssimultaneously,unprecedentedintheindustry.

Newbrandsareexcitingandhavethepotentialtocreatevalueinthefutureand

IHGhasatrackrecordofsuccessfulbrandlaunches.Butitisourpowerfulportfolioofestablishedbrandsthatcreatevalueforourownersandshareholderstoday–andweneverlosesightofthatfactaswecontinuallyevolveandrefinethem.Ourlargestbrand,theHolidayInnbrandfamily,continuestodeliversignificantvalueforbothIHGandourowners.ThisyearHolidayInnwastheofficialhotelprovidertotheLondon2012OlympicandParalympicGamesandcelebratedits60thanniversary.In2012HolidayInncontinueditspostrelaunchtrackrecordbygrowingitspremiumtothesectoreachyearsince2007,andwasranked‘HighestGuestSatisfactionAmongMid-ScaleFullServiceHotelChains,TwoYearsinaRow’byJ.D.PowerandAssociates(seepage60).

CrownePlazaisoursecondlargestbrandaftertheHolidayInnbrandfamily.Itisalreadytheworld’sfourthlargestfull-servicehotelbrandintheuppersegments,generatingalmost20percentofourtotalgrossrevenueperannum.CrownePlazahasbeenhighlysuccessfulandhasasolidfoundationforfuturegrowth,howeverweseesignificantopportunitytotakeitsperformanceinTheAmericasuptothelevelsachievedbythebrandglobally.Wearecurrentlyundertakingathree-phase,multi-yearrepositioningprogramme,whichwilllooktoprovideamoreconsistent,targetedexperiencearoundtheworld.

Talented People

Greathotelbrandsneedtodeliveraconsistent,brandedexperiencetoguests,andtalentedandpassionatePeopleareessentialforthis.AtIHGwearefocussedonensuringourPeopledeliverconsistent

Chief Executive’s Review

2012 was another year of high-quality growth for IHG, with the launch of two new brands and a strong pace of hotel openings and signings. Driven by a material increase in worldwide demand for hotel rooms, we generated an impressive 6.8 per cent growth in fee revenue, one of our key metrics of success. This translated into double digit profit growth, driven by our preferred Brands and brought to life in our hotels by talented and passionate People.


TheIHGOwnersAssociationiscontinuingtostrengthenitsalignmentwithIHG–we’vebeenonthisjourneyfornearly60years,andthislatestchapterisperhapsthemostexcitingyet.

Inautumn2012,theExecutiveCommitteeoftheIHGOwnersAssociationandtheIHGExecutiveCommitteemetinOklahomaCitytofashionaplanthatlaunchedthislatestchapter.Togetherweagreedtorefinethefocusofourworkandestablishedfivekeyprioritiesaroundwhichtoorganiseourwork:

1.deliverthestrongestbrandportfoliointheindustry;

2.deliverthestrongestsetoftoolsintheindustry;

3.developthestrongestapproachtostandardsintheindustry;

4.developthestrongestGeneralManagertalentintheindustry;and

5.maintainthestrongestreputationfordoingbusinesstherightway.

Asaresultofestablishingthesefocussedpriorities,theIHGOwnersAssociationisreorganisingitscommitteestructuretoworktowardsthissharedvision.OurgoalistoworkcloselywithIHGtoincreaseownermarginsbystrengtheningtheIHGbrands.

Weplantobeginbyworkinginthreespecificareas:energiseGeneralManagerstobeourbrandpromisekeepers;mastertheIHGrevenuetoolsineveryhotel;andrelentlesslypursuethesebrandstandardsthatmatter.

IHGownersareproudoftheirhotels,andtheIHGOwnersAssociationisproudtoworkwithIHG.OurmutualfocusonstrengtheningtheIHGbrandsgivesusthegreatestopportunitytoincreasehotelvalueandownermargins.

MikeHembree2013ChairmanIHGOwnersAssociation

ForinformationontheIHGOwnersAssociationgotowww.owners.org

service,irrespectiveofownershipmodel.Thisisacomplextaskandoursuccesshasrequiredsignificantinnovationandeffortaswehaveworkedhand-in-handwithourownerstodeliveronit.

OursuiteofPeopleToolshelpourownersandGeneralManagerstodevelopaBrandHeartedculture,makeIHGanditshotelsagreatplacetoworkanddeliverthebrandpromisetoourguests.TosupportcommunitiesandaidrecruitmentwehavedevelopedtheIHGAcademyprogramme,whichisacollaborationbetweenIHGhotelsorcorporateofficesandlocaleducationprovidersand/orcommunityorganisationsaroundtheworld,providingtheopportunitytodevelopskillsandimproveemploymentprospects.Wecelebratedtheopeningofour150thIHGAcademyinJanuarythisyearandtodateover10,000participantshavebenefitedfromtheIHGAcademyprogramme.

WecontinuetoberewardedforoureffortsinthisareaandhavebeenrecognisedinTheSundayTimes25BestBigCompaniestoWorkForin2012,aswellaswinninganumberofotherawardsglobally.

Best-in-class Delivery

IHGprovidesourhotelswithapowerfulcombinationofbest-in-classrevenueplatforms,programmesandtoolswithwhichtodriveprofitablerevenuetoourbrandedhotels–whatwecallourSystem.ThescaleandpowerofthisSystemenablesustooutperformbycreating,converting,yieldingandretainingdemand.

Wecontinuetoleadindustryinnovation,andthiscanbeseeninourprogresswithmobileandwebbookingsolutions.Weareafoundingmemberofroomkey.com,whichwaslaunchedin2012asthefirst

industry-ownedonlinehotelsearchengine.Revenuesfrommobiledevicesgenerated$330millionin2012.During2012,HolidayInnwasthefirstmajorhotelbrandtolaunchatravelappontheWindows8platform.In2012,69percentoftotalroomsrevenuewasdeliveredthroughIHG’schannels,includingourcallcentresandwebsites,andouraward-winningPriorityClubRewardsprogramme.Thisisthelargestloyaltyandrewardsprogrammeintheindustrywith71.4millionmembersworldwideandisaveryimportantwayinwhichweretainandrewardloyalguests.In2012PriorityClubRewardsmembersaccountedfor41percentoftherevenuegeneratedinourhotels.Ourscaleadvantagemeansthatwecanofferguestsmorechoice,whichbettermeettheirneeds,andthisisakeydriverofouroutperformance.

Lookingforwardweremainconfident.Despitetheuncertaineconomyinsomemarkets,long-termtraveltrendsarepositive,particularlyindevelopingmarketssuchasChinaandAsiagenerally.ThedriversofdemandinthehotelindustryremainpositiveandIHGiswell-placedtobenefitfromtheseaswecontinuetodeliveragainstourclearlydefinedstrategywithpreferredBrandsdeliveredbytalentedPeopleandbest-in-classDeliverysystems,allunderpinnedbyourstronggovernancestructureandResponsibleBusinesspractices.

RichardSolomonsChiefExecutive

Delivering Great Hotels Guests Love

Grow market share Sustainable margin growth

Invest in growth

Preferred Brands

Talented People

Best-in-class Delivery

Responsible Business practice

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Chief Executive’s Review 7

Implementing our strategy

Our strategy is to build preferred Brands with scale positions in the most attractive markets globally. Concentrating growth in the largest markets means IHG and owners can operate more efficiently and benefit from enhanced revenues and reduced costs.

Strategy on track

Thehotelindustryperformedwelllastyear,despitechallengingeconomicconditions.Theeconomicoutlookdeterioratedoverthecourseof2012withincreasedconcernsovertheEurozoneandweakerperformanceintheUSandChina.However,thehotelindustrydemonstrateditsresilienceagainstthischallengingeconomicbackground.Globally,industryrevenueperavailableroom(RevPAR)increasedby4.5percentagainsta5.9percentincreasein2011.IHGperformedwellagainstthesemarketconditions,withglobalRevPARgrowthin2012of5.2percent.

IHGopened33,922rooms(226newhotels)worldwidein2012and,with675,982rooms(4,602hotels),IHGholdsthelargestshareofbrandedroomsintheindustry,currentlyapproximately9percentofbrandedsupply,distributedacrossnearly100countriesandterritories.

Thebenefitsofabrand,suchasthegreatersecurityandperformanceofaglobalreservationsystem,loyaltyprogrammesandinternationalnetworks,arecleartomanyownersandIHGiswell-positionedtowinthebusinessofownersseekingtogrowwithahotelbrand.

IHGcloselymonitorsmarketsacrosstheglobeandfollowskeyindustryandbusinessmetricstoensureourstrategycontinuestobesustainableinthechangingbusinessenvironmentandsuitableforourcapabilities.

Ourstrategy,tobuildpreferredBrandswithscalepositionsinthemostattractivemarketsglobally,remainsfirmlyontrack.

Competing in relevant consumer segments

Thehotelindustryisusuallysegmentedaccordingtopricepoint.IHGisfocussedonthethreesegmentsthatgenerateover90percentofbrandedhotelrevenue,namelymidscale(broadlythreestar),upscale(mostlyfourstar)andluxury(fivestar).However,tobuildpreferredBrands,webelieveweneedtoadvanceourunderstandingofourguestsandtheirneedstoensureourBrandsremaincontemporaryandrelevant.

Wehavethereforecompletedafundamentaloccasion-basedneedssegmentationanalysistounderstandwhyguestsbookhotels–lookingatwhotheyare,theoccasiontheyaretravellingforandtheirneedswhentravelling.Manyguestsnolongerhaveasinglepurposefortheirhotelstay,forexample,businesstripsturnintofamilyholidays,andweneedtomeetthesedemands,focussingmoreontheneedsofourguests,todeliverloyaltyandbrandpreference.Weusedthisanalysistodevelopthebrandpropositionforourtwonewbrands,HUALUXEHotels&ResortsandEVENHotels,andwecontinuetoworkonthisneeds-basedsegmentationtohelpinformourviewofthehotelmarketandourbrandstrategiesgoingforward.

Competing in the most attractive markets

OurstrategyistobuildpreferredBrandswithscalepositionsinthemostattractivemarketsglobally.ConcentratinggrowthinthelargestmarketsmeansIHGandownerscanoperatemoreefficientlyandbenefitfromenhancedrevenuesandreducedcosts.

OurkeymarketsincludelargedevelopedmarketssuchastheUS,UKandGermanyaswellasemergingmarketslikeChinaandIndia.During2012,weopened33,922roomsin26countries,andsignedafurther53,812roomsintoourdevelopmentpipelineacross33countries.AspartofourongoingcommitmenttomaintainingthequalityofourBrands,weremoved16,288roomsduringtheyear.Asat31December2012,IHGhadthesecondlargestpipelineintheindustry,with169,030roomsin1,053hotelsacross60countriesandterritories.Thisrepresentsamarketshareof12percentofallhotelsunderdevelopment,includingthosethatareindependentorunaffiliated.

InChina,IHGseesthegreatestopportunityforgrowthofanysinglecountry.Inacountrywith659,000brandedhotelrooms,IHGisthelargestinternationalhotelcompanywithover61,000roomsacrossourbrandsandmorethan50,000intheplanningphaseorunderconstruction.IHGisalsofocussedondevelopinginotherhighprioritymarkets.WeseektodevelopourportfolioofBrandsinthosemarketswhichwillbesourcesofstrongdemandinthefuture.Forexample,weincreasedthedistributionofourcorebrandsinIndia,buildinguponourleadershippositionofHolidayInn.InRussiaandtheCommonwealthofIndependentStates,thereareopportunitiesfornewconstructionandconversions,aswellasstrongdemandforbrandedhotels.IHGcontinuestoadaptitsbusinessmodelbymarket,choosingpartnershipsandjointventureswhereappropriate.


Our business modelWhatevertheexternaleconomicclimate,itistheinherentstrengthsofourasset-lightfeebasedbusinessmodelthatkeepusingoodshape.

Themodelisfocussedonfranchisingandmanaginghotels,ratherthanowningthem.Wecurrentlyhave85percentfranchisedhotels,14percentmanagedhotelsandlessthanonepercentownedandleased(10hotels).Thisenablesustogrowatanacceleratedpacewithlimitedcapitalinvestment,andmeansthatIHGcanfocusonbuildingstrong,preferredBrandsbasedonrelevantconsumerneeds,leavingassetmanagementandrealestatetolocalthird-partyownerswiththenecessaryexpertise.Withthisasset-lightapproach,IHGitselfbenefitsfromthereducedvolatilityoffeebasedincomestreamsascomparedwiththeownershipofassets.

ThescaleofourbusinessallowsustoconcentrateonbuildingstrongDeliverysystemssuchasourbrandedhotelwebsitesandcallcentres,whichinturncreategreaterreturnsforowners.

Akeycharacteristicofthefranchisedandmanagedbusinessmodelisthatitishighlycashgenerative,withahighreturnoncapitalemployed.Itenablesustofocusongrowingourfeerevenueandfeebasedmargins.In2012,86percentofGroupoperatingprofit(beforeregionalandcentraloverheadsandexceptionalitems)wasderivedfromfranchisedandmanagedoperations.Insomesituations,wesupportourbrandsbyusingcapitaltobuildorsupportthefundingofflagshipassetsinhigh-demandlocationsinordertodrivegrowth.Weplantorecyclecapitalbysellingtheseassetswhenthetimeisright,toreinvestelsewhereinthebusinessandacrossourportfolio.

Wecontinuetoinvestforgrowth,strengtheningbothourexistingbrandsandlaunchingnewones.

LeftHotelIndigoNewYorkCity-Chelsea,US

BottomCrownePlazaPhuketPanwaBeachResort,Thailand

FarbottomInterContinentalCenturyCityChengdu,China

LeftWithaportfolioofpreferredBrandsinthemostattractivemarkets,ourtalentedPeoplearefocussedondeliveringGreatHotelsGuestsLoveandexecutingaclearsetofprioritiestoachieveourVisionofbecomingoneofthegreatcompaniesintheworld

Wherewecompete

Relevantconsumersegments

Mostattractivemarkets

Appropriatebusinessmodel

HowwewinPortfolioofpreferredBrands

TalentedPeople

Best-in-classDelivery

ResponsibleBusiness

‘ In China, IHG sees the greatest opportunity for growth of any single country. In a country with 659,000 branded hotel rooms, IHG is the largest international hotel company with over 61,000 rooms across our brands and more than 50,000 in the planning phase or under construction.’

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Implementing our strategy 9

Scale4,602hotels

157millionroomnightsannually

RevenueManagementWorld-class

systems

Reservationssystems10callcentres12languages

BrandportfolioNinepreferredhotelbrands

PriorityClubRewards71.4millionmembers,

contributingover$7.2billiontoglobalsystemroomsrevenue

MarketcoverageInnearly100countries

andterritories

Salesforce17,600salesprofessionals

2,020accounts

Web/Mobile13languagesitessixlanguageapps

FoodandbeverageOver$4.7billionoffood

andbeveragerevenueandover4,500outletsworldwide

SystemFundAnnualfundtotalling$1.2billion

tomaintainmarketingandsystemsthatgeneratedemand

forourhotels

69%roomrevenuedelivery

Our business model and revenue delivery systems

We run hotels in three ways: franchised, managed and owned. Our asset-light business model means we own just 10 hotels (less than one per cent of our portfolio). Most of our hotels operate under a franchise agreement or are managed by IHG on behalf of owners. All of our hotels are supported by our revenue delivery systems and marketing programmes, which drive business to our hotels.

Our revenue delivery systems at a glance

COPY TO COMEManagedWe manage 658 hotels worldwide

OwnedandleasedWe own 10 hotels worldwide (less than one per cent of our portfolio)

IHG

IHG

IHG

IHG

IHGusuallysuppliesGeneralManagerasaminimum

IHG

Third-party

IHG

Low/none

High

Franchisedthis is the largest part of our business: 3,934 hotels operate under franchise agreements

IHG IHG Third-party Third-party None Fee%ofroomsrevenue

Brandownership

Marketinganddistribution

Staff

Hotelownership

IHGcapital

IHGincome

Fee%oftotalrevenueplus%ofprofit

Allrevenuesandprofits

Our business model


How we win

At IHG, we’re focussed on winning through our strong portfolio of nine hotel Brands, our talented People who deliver our brand promise and bring our Brands to life for our guests, and our best-in-class Delivery systems that enable us to leverage our scale. At the heart of our culture is a commitment to act responsibly in everything we do.

Hotel Indigo atlanta midtown, us

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Our business model and revenue delivery systems and How we win 11

Brands

Bigger, better and stronger brands. Each of our brands needs to deliver a superior and consistent experience to that offered by competitors. Guests value a quality, branded hotel experience and will pay a premium price. Superior and consistent brand experiences deliver a better return on investment to us and to our owners who choose to operate under our brands.

“A brand is a promise. It says: ‘I promise that if you buy this brand, you will get this experience.’ And that is what we have to consistently deliver.”

Larry Light Chief Brands Officer

TopleftHotelIndigoShanghaiontheBund,China

ToprightCrownePlazaChangiAirport,Singapore

BottomrightHotelIndigoLondon-TowerHill,UK


IHG’spriorityisthateachofourbrandsbecomesbigger,betterandstronger.

Bigger

ThemajorengineforasustainablegrowthinprofitshasbeenourSystemsize.Sizematters.

Thereiscompetitiveadvantagetobeingbig.Wehavemoreroomsinmorelocationsandoperationallythereareeconomiesofscale.Itmakesusmoreefficient.Therearealso‘powerofscale’opportunitiestobemoreeffective.Ourbest-in-classDeliverysystemsmeanthatwecantrynewthings.Iftheywork,wecanexpandthem.

Furthermore,sizeenablesustodevelopareasofspecialistexpertise–forexample,wehavesituatedourglobalresortsteaminBangkok,whichisattheheartofagreatresortlocation,tofurtherdevelopourresortsstrategy.

Inordertogeneratemoreeffectiveness,consistencyandefficiencyfromourmarketing,wewillbestreamliningourprocessestoensurebetterintegrationofglobalbrandplansworldwide.

Better

Itisvitalthatwecontinuallyrevieweverythingwedoinordertoimprove–wecanalwaysdobetter.Thisincludesimprovingtheconsistentdeliveryofourguestexperience,differentiatingandinnovatingourBrands,addressingguestcomplaints,managingourtalentedPeopleandrelationshipswithowners,andunderstandingaguest’sneeds,wants,concernsandworries.

Thisisakeyareaoffocus.

OurBrandsregularlywinindustryawardsinguestsatisfaction,andtheseawardsprovideexternalrecognitionthatweunderstandhowtodeliverGreatHotelsGuestsLove.

Stronger

Bystronger,wemeanbrandpreference–amongguestsandowners,investorsandemployees.ItisamajorstrategicpriorityforIHG.

Strongbrandshaveahugeadvantage.Asbrandpreferencegoesup,pricesensitivitygoesdown.Brandenthusiaststhinkitisworthpayingapremiumfortheirfirstchoicebrand.Theirwillingnesstorecommendandtheirbrandloyaltyincreaseaswegivethemreasonstobelieveinourbrandpromise.

Building brand preference

Weareundertakingsomesignificantworktohelpusbuildbrandpreference.Withourgoalofbuildingbigger,betterandstrongerbrands,tokeepthemcontemporaryandrelevant,weareimprovingourknowledgeofourguests.Wewillbedoingthisthroughmarketsegmentation.Classifyingourbrandsinconventionalindustrytermssuchasupperupscalemeansnothingtoguests.Upperupscaleorthenuancebetweenalimited-servicehotelandaselect-servicehotelarecategoriesthatguestsdon’tbuy.

Needsareoccasion-based.Andthesevaryenormously.Doyouhavechildrenwithyou?Areyouplanningawedding?Isthisabusinesstrip?Isitaweekdayortheweekend?We’vecompletedafundamentaloccasion-basedneedssegmentationanalysistogiveusabetterguest’seyeviewandexpectationofthehotelandresortmarket.

Goingforward,wewillusethisworktoinformourbrandstrategies.

Wewillcontinuetoclarifyanddifferentiateourvisionforeachofourbrandstodeliverbetterresultsthroughmoreeffectivecustomisation,localisationandevenpersonalisationofthebrandswithinIHG’sstrongportfolio.

We’vebeenestablishingbrandframeworksforeachofourhotelbrandstofurtherdefinetheirstrategicdirection,brandpromise,guidingprinciples,brandidentity,designandserviceguidelines.

Unlikepackagedgoods,ourbrandedexperiencesarenotmanufacturedinafactory.Ourbrandedexperiencesarebroughttolifeinthehotel.Whatguestsactuallyexperienceistheonlyrelevantreality–andbrandpreferenceiscreatedoneguestatatime,ineachhotel,eachday,face-to-face.ThismeansthattheultimatebrandmanageristhehotelGeneralManager.Therefore,weareinvestingresourcestoensurethatourGeneralManagerscandeliverourbrandpromise.

OurstrongportfolioofpreferredBrandsarekeytoIHG’ssuccess.In2013,wewillcontinuetoinnovateanddevelopourestablishedandnewhotelbrandstomeettheevolvingneedsofourguests,aswellascreatevalueforourownersandshareholders.

InterContinentalHotels&Resorts page14HolidayInnbrandfamily page16CrownePlazaHotels&Resorts page20HotelIndigo page22StaybridgeSuites page24CandlewoodSuites page26HUALUXEHotels&Resorts page28EVENHotels page29

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Brands 13

InterContinentalHotels&Resorts’well-travelled,affluentguestswanttobeconnectedtowhatisspecialaboutadestinationandappreciatethebrand’sunderstatedserviceandstyle.Everyteammembersharestheirknowledgesothatguestscanenjoyauthenticexperiencesandmakethemostoftheirtimewithus.

Opening our doors since 1946

In2012,weopenedsixmoreworld-classpropertiesinkeylocations.Ofthese,wecelebratedthreefantasticadditionstoourresortsportfolio,furthercementingInterContinentalHotels&Resortsasoneoftheworld’smostrespectedluxuryhotelbrands.ThesewereInterContinentalSamuiBaanTalingNgamResortinThailand,InterContinentalDanangSunPeninsulaResortinVietnamandInterContinentalSanctuaryCoveResortinAustralia.ThelatterisIHG’sfirst

InterContinentalResortinAustralia,andjoinsournetworkofInterContinentalhotelsintheAustralasiaregion,includingSydney,Melbourne,Adelaide,WellingtonandFiji.

Addingtoourcityportfolio,weopenedInterContinentalDoha-TheCityandPresidenteInterContinentalSantaFeMexico.WealsoopenedInterContinentalLondon-WestminsterinNovember2012inasuperblyrenovated19thcenturylandmarkbuildingclosetomanyofLondon’smosticonicsites.ThisnewhotelensuresIHG’scontinuedpresenceinoneoftheworld’skeycities.

Wealsoannounced10signingsincludingpropertiesinJakartaandOman.ThesigningoftheInterContinentalPhuketRawaiBeachResortmarksourthirdInterContinentalResortinThailand.

Lookingforwardto2013,wearepreparingtocuttheribbonat12InterContinentalHotels&ResortsincludingInterContinentalDavosResort&SpainSwitzerlandandInterContinentalMarseille-HotelDieuinFrance.

Focus on global brand marketing

In2012,westrengthenedourintegratedglobalmarketingactivity.Firstly,welaunchedanewbrandwebsite.Usersofintercontinental.comcannowexploreInterContinentalHotels&Resortspropertiesviafilterslikelocation,interestorhoteltype.Secondly,welaunchedtwonewglobalbrandadvertisingcampaigns.ThefirsthighlightedournewresortsinAsia,andthesecondpromotedourindustry-leadingConciergeService,featuringourChefConciergesfromkeycityhotelssharingauthenticexperiencesoftheirfavouriteplaces.

InterContinental® Hotels & ResortsInterContinental® Hotels & Resorts is IHG’s most established brand, having been on the international scene for over 60 years. With a presence in over 60 countries, found in most of the world’s key cities and many resort locations, the brand is growing at pace and continues to expand around the globe.


The scent of luxury

WearedelightedtohavelaunchedourexclusiveglobalcollaborationwithAgraria,America’soldestandlargestluxuryhomefragrancebrand,toprovideguestamenitiestoallofourInterContinentalHotels&Resortsaroundtheworld.AgrariahasasharedheritagewithInterContinentalHotels&Resortsdatingbacktothe1970s,whenitopeneditsfirstboutiqueonNobHillinSanFrancisco,nearInterContinentalMarkHopkinsSanFrancisco,thebrand’sfirsthotelinNorthAmerica.Agrariaproductscannowbefoundatthefinestretailstoresaroundtheworld.

Awards

InterContinentalHotels&Resortscontinuestoberecognisedasoneoftheworld’sleadinghotelbrands.Atthe2012WorldTravelAwards,InterContinentalHotels&ResortswasnamedtheWorld’sLeadingHotelBrandforthefourthconsecutiveyear,aswellastheWorld’sLeadingBusinessHotelBrandforthesecondyearrunning.ThebrandwasalsoawardedBestBusinessHotelBrandintheWorldatthe2012BusinessTravellerAwardsAsia-Pacificforthethirdyearrunning.

intercontinental.com

FarleftInterContinentalDanangSunPeninsulaResort,Vietnam

RightInterContinentalDoha-TheCity,Qatar

TopfarrightInterContinentalLondon-Westminster,UK

BottomfarrightInterContinentalHotels&Resortsadvertisingcampaign

HotelsinRegion Hotels Rooms pipeline

Americas 53 17,756 4

Europe 30 9,394 2

AMEA 65 20,791 20

GreaterChina 22 9,373 22

Total 170 57,314 48

‘ Every team member shares their knowledge so that guests can enjoy authentic experiences and make the most of their time with us.’

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InterContinental Hotels & Resorts 15

EachofthebrandsintheHolidayInnbrandfamilysharethesameDNAastheirpowerfulparentbrand–HolidayInn.However,eachoneisdistinctive,hasitsownidentity,andappealstodifferentguestneedsondifferenttraveloccasions.

TheHolidayInnbrandfamilyhostsover100millionguestnightseachyear.Thatmeanseverysecond,twopeoplecheck-intoaHolidayInnbrandfamilyhotel.

Holiday Inn®

ManyofthethingswenowtakeforgrantedinhotelstodaywererevolutionarywhentheHolidayInnbrandfirstlaunchedthemoverthelast60years.Ourguestsappreciateinnovation,buttheyalsowanttobecomfortable,bothemotionallyandphysically,andthat’swhatmakestheHolidayInnbranddifferent.TheHolidayInnbrandpromiseistodelivercomfortinawaythatisnew,yetfamiliar.

Holiday Inn Express®

Ourhotelsaredesignedwithsavvytravellersinmind.Theywantastraightforward,uncomplicatedexperience,deliveredinanengagingmanner.Ahotelthatprovidesthemwithjustwhattheyneed,enablingthemtomanagetheirmoneywiselyandstaysmart.

Holiday Inn Resort®

TheHolidayInnResortbrandoffersaneffortlesschoiceforarelaxingbreak.Timeawayisimportanttoourguestssotheydon’twanttoworryabouteverylittledetailwhengoingonholiday.Theywanttorelaxinanenvironmentthatissafeandinviting,whereeveryonehasactivitiestheyenjoyandtheydiscoverindulgenttouchesalongtheway.

Holiday Inn Club Vacations®

OurHolidayInnClubVacationsbrandprovidesguestswithallofthebenefitsofavacationhomewithnoneofthehassle.Whilestayingwithustheydon’thavetocompromiseonspaceortheirdailyroutines.

Holiday Inn brand family The Holiday Inn brand family, comprising Holiday Inn®, Holiday Inn Express®, Holiday Inn Resort® and Holiday Inn Club Vacations®, represents the largest number of rooms and fee revenue for IHG. And as part of our 60th anniversary celebration in 2012, we clarified the vision for each of the members of the family – ensuring we make them ever more relevant for today’s and tomorrow’s travellers.


Holiday Inn

Celebrating60yearsaroundtheworld2012markedthe60thanniversaryoftheiconicHolidayInnbrand,coincidingwiththeendofits$1billionglobalbrandrefresh,theresultsofwhichhaveseenthebrand’sperformancegofromstrengthtostrength.Aswellascelebratingbeing60weopenedour60thhotelinGreaterChina.

TheHolidayInnbrandwasalsoranked‘HighestinGuestSatisfactionAmongMidscaleFullServiceHotelChains,TwoYearsinaRow’byJ.D.PowerandAssociates(seepage60).

AwinningyearAsofficialhotelprovidertotheLondon2012OlympicandParalympicGames,thespotlightwasalsoontheHolidayInnbrandthroughouttheyear.

TheJune2012openingofthe188-roomHolidayInnLondon-StratfordCityoverlookingtheOlympicParkwasoneofthebrand’smostnotableopeningsduringtheyear.

IntheOlympicandParalympicVillageitself,morethan90HolidayInnteammembersfromaroundtheworldweregiventheopportunitytohelpdeliverworld-classserviceforathletes.HotelandcorporateofficerepresentativeswereflowninfromChina,thePhilippines,theUS,Australia,Kenya,Serbia,aswellastheUKforthisonce-in-a-lifetimeopportunity.

ThesponsorshipoftheOlympicandParalympicGameshasprovidedexcitingmomentumfortheHolidayInnbrandwithover50percentofHolidayInnguestswhosawthesponsorshipcampaignsayingtheyaremorelikelytostaywithusagain.

holidayinn.com

hiexpress.com

hiclubvacations.com

holidayinnresorts.com

FarleftHolidayInnSaskatoonDowntown,Canada

BelowHolidayInnLondon-StratfordCity,UK

Holiday Inn HotelsinRegion Hotels Rooms pipeline

Americas 793 138,720 134

Europe 285 46,248 20

AMEA 61 14,129 43


Total 1,200 218,981 231

‘ Our guests appreciate innovation, but they also want to be comfortable, both emotionally and physically – and that’s what makes the Holiday Inn brand different.’

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Holiday Inn brand family 17

Holiday Inn Express

GrowingatpaceHolidayInnExpressisoneofthelargestandfastestgrowingbrandsintheindustry,openinghotelsattherateoftwoperweekonaverage.

Thebrandsawtheopeningof114newpropertiesin2012.Therearecurrently2,192HolidayInnExpresshotels(205,631rooms)aroundtheworld.

TheHolidayInnExpressBangkokSiaminThailandlaunchedinJune2012andrepresentsthebrand’sfirstforayintoSoutheastAsia,aregionwithhugepotential.OurexpansionplansincludefurtherpropertiesinThailand,Indonesia,SingaporeandMalaysiaoverthenextfewyears.Indonesiaisaparticularlyimportantgrowthmarketforus.Therearecurrently18hotelsintheHolidayInnExpresspipelinescheduledtoopenoverthenexttwoyearsinSoutheastAsia,ofwhich12willbeinIndonesia.

ThebrandisalsocontinuingtoexpandacrossthebroaderAsiaregion,includinginGreaterChinaandIndia.TheHolidayInnExpressAhmedabadopenedinIndiaasacountryfirstforthebrand.

IntheMiddleEast,thelaunchofHolidayInnExpressBahraininAugust2012markedourdebutintheGulfstate.

DistinctiveserviceAspartofIHG’sdrivetoincreasethedifferentiationbetweentheHolidayInnandHolidayInnExpressbrands,wehavebeendevelopingnewbrand-specificservicebehavioursforHolidayInnExpress.

Anumberofhotelsineachofourregionswereinvolvedinthevalidationprocessforthenewservicebehaviours,anddevelopmentworkbeganontrainingprogrammesthatwillbedeliveredthroughaneLearningplatform.Theseprogrammeswillberolledoutin2013.

Holiday Inn Express HotelsinRegion Hotels Rooms pipeline

Americas 1,931 168,398 345

Europe 212 24,903 43

AMEA 12 2,877 35


Total 2,192 205,631 452


Holiday Inn Resort

MoreplacestorelaxTheguestswhochoosetheHolidayInnResortbrandworkhard,butalsowanttoleadabalancedlife.

Thatiswhywecontinuetogrowandgivethemmoreplacestorelax.

ThebrandhadagreatyearinTheAmericas,supportedbybrand-specificmarketingcampaigns.FourpropertiesopenedinTheAmericasin2012,includingtwoinOregon,bringingthetotalnumberofpropertiesto17.Fivemoreareinthepipeline,includingresortsintheCaymanIslands,MexicoandFlorida,aswellasfurtherexpansionplannedinCalifornia.

WealsosawourthirdHolidayInnResortopeninginGreaterChinawiththeHolidayInnResortChaohuHotSpring.

Intotalin2012,weopenedsevenHolidayInnResortpropertiesaroundtheworld.

Holiday Inn Club Vacations

MorevacationoptionsThetremendousstrengthoftheHolidayInnbrandcontinuestofuelexpansionofHolidayInnClubVacationsinNorthAmerica.

ThenumberofHolidayInnClubVacationspropertieshavemorethandoubledsinceitslaunchyearin2008,expandingtheportfolioin2012to10propertieswiththeopeningofthreenewresorts,includinganew658-roomresortinLasVegas.

FarleftHolidayInnExpressBangkokSiam,ThailandLeftHolidayInnResortKandoomaMaldives

Holiday Inn Resort HotelsinRegion Hotels Rooms pipeline

Americas 17 4,240 5

Europe 3 362 0

AMEA 14 3,311 4

GreaterChina 3 893 3

Total 37 8,806 12

Holiday Inn Club Vacations HotelsinRegion Hotels Rooms pipeline

Americas 10 3,701 0

Europe 0 0 0

AMEA 0 0 0

GreaterChina 0 0 0

Total 10 3,701 0

‘ Our expansion plans include further properties in Thailand, Indonesia, Singapore and Malaysia over the next few years. Indonesia is a particularly important growth market for us.’

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Holiday Inn brand family 19

Strengthening the brand

Havingdoubleditssizeinadecadetonearly400hotels.IHGisnowensuringthateachCrownePlazahotelmeetsourstandardsandourguests’highexpectations.

TherepositioningremainsatoppriorityforIHGandtheIHGOwnersAssociation,andmomentumcontinuestobuild.TherepositioningoftheCrownePlazabrandisathree-phase,multi-yearrepositioningprogramme.

Aspartofthe‘FreshenUp’phase,ownershaveinvestedinnewprogrammes,includinganewbrand-specificservicetrainingprogrammethatensuresourguestsreceivethesamequalityserviceandattentionateveryCrownePlazahotelworldwide.BringingthebrandtolifethroughourPeopleandbeingonestepaheadiswhattrulysetsusapartfromourcompetitors.The‘OneStepAhead’programmeenablesemployeestoanticipatetheneedsofguestsandprovidesqualityacrossallofourhotels.

Inaddition,qualityauditshavebeencarriedoutatalmostallCrownePlazahotelsinTheAmericasandEurope.Wheredeficiencieshavebeenidentified,actionisbeingtakentorectifythemandsub-standardhotelsareexitingfromourSystem.

Nextcomesthe‘MoveUp’phase,wherethefocuswillbeonensuringconsistencyandevolutionoftheguestexperience,anddrivingbrandperformancethroughmarketingandsales.

The‘Shine’phasewillintroducenewbrandhallmarks,whichwillsettheCrownePlazabrandapartfromourcompetitors.Thisphaseisnotsomethingwe’llstartandstop;wemustcontinuetoinnovateanddifferentiatetheguestexperienceinordertomakethebrandshineeachandeveryday.

Growing in China

In2012,theopeningofeightnewCrownePlazahotelsinGreaterChinabroughtourtotalto60.Withexisting

locationsinmajorurbancentres,gatewaycitiesandresortdestinations,theCrownePlazabrandisnowGreaterChina’slargestupscaleinternationalhotelbrand.

Morethanhalfofthebrand’sglobaldevelopmentpipeline(52hotels)willopeninGreaterChinainthenextthreetofiveyears,furtherproofthatthebrandisgrowingbiggerinthisregion.

InSeptember2012,weopenedHongKong’ssecondCrownePlazahotel,CrownePlazaHongKongKowloonEast,whichisattheheartoftheemergingcommercialandresidentialTseungKwanOtowncentre.

IntheAMEAregion,weopenedtworesortsin2012:theCrownePlazaPhuketPanwaBeachResortinThailandandtheCrownePlazaJordanDeadSeaResort&Spa.

Crowne Plaza® Hotels & ResortsThe Crowne Plaza® brand is the fourth largest full-service hotel brand in the upper segments, with nearly 400 hotels and resorts in 66 countries. It continues to succeed with business travellers who are high achievers that strive to be successful in everything they do. The Crowne Plaza brand provides the facilities and service they need to help them on their upward journey.


Americas 183 48,730 16

Europe 84 19,566 12

AMEA 65 18,559 18


Total 392 108,307 98


Checking-in to sustainability

TheCrownePlazabrandisdeliveringabetterandmoresustainablefuturethankstoIHG’sGreenEngageprogramme.

During2012,GreenEngagewasrolledouttotheCrownePlazabrand.Theprogrammenotonlyhelpsthehotelrunmoreefficiently–energysavingsofupto25percenthavebeenachieved–butalsomakesthebrandmoreattractivetocorporatecustomerswhoareincreasinglyrequiringhotelstobegreen.

Hotelshavereplacedeverythingfromlightbulbstowaterheaterswithlessenergyintensivealternatives,ensuringthatthebrandstandsoutstronglyamidstcompetitorsinenvironmentally-friendlyefficiency.

GreenEngage,ouronlinesustainabilityplatform,helpshotelstrack,manageandreducetheuseofenergy,carbonandwaterandthemanagementofwasteinhotelproperties,therebyassistinghotelsinsavingmoneyonenergycosts.

crowneplaza.com

FarleftCrownePlazaHongKongKowloonEast

LeftCrownePlazaDublin-Blanchardstown,Ireland

BelowCrownePlazaChangiAirport,Singapore

‘ More than half of the brand’s global development pipeline (52 hotels) will open in Greater China in the next three to five years, further proof that the brand is growing bigger in this region.’

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Crowne Plaza Hotels & Resorts 21

Reaching the 50th hotel milestone

As‘theworld’sfirstglobalboutiquehotelbrand’,IHGopened13newHotelIndigopropertiesduring2012:sixinTheAmericas,fiveinEuropeandtwoinGreaterChina.

InDecember2012,theHotelIndigobrandreachedits50thhotelmilestonesinceitslaunchin2004withtheopeningsofHotelIndigoLondonKensington-Earl’sCourtandHotelIndigoNewOrleansGardenDistrict.

Theroll-outofthebrandinEuropeisgatheringpace,with10newhotelssinceitwasintroducedintheregionin2008.In2012,thefirstHotelIndigopropertyinContinentalEuropelaunchedinKurfuerstendamm,BerlininFebruary,andtheoverallnumberofthehotelsinEuropedoubledtoatotalof10.

Thepipelineincludesplannedopeningsin2013inotherkeyEuropeancities,includingSt.Petersburg,MadridandBarcelona,withBirmingham,ManchesterandHamburgtofollow.

Focusing on quality growth

Withastrongglobalappetiteforthebrand,IHG’sfocusisonqualitygrowthinprioritymarketsandgatewaycities.Thiswillbeachievedtogetherwiththerightownerandpropertythat’ssituatedintherightneighbourhoodwithresidential,commercial,pedestrianandculturalrepresentation.Thepipelinecurrentlystandsat47hotels,withtheestatesettodoubleinsizeto100withinthenextthreetofiveyears.Otherexpectedopeningsin2013and2014includeinRiyadh,TelAviv,HongKong,Bangkok,PhuketandNewYorkCity.

Making the most of the neighbourhood

NotwoHotelIndigohotelsarethesame.Eachisspecificallydesignedtoreflectthevibrantculture,characterandhistoryofitssurroundingneighbourhood,whichincludeslocalfoodanddrinkmenussourcedfromlocalsuppliers.

Closelinkswiththeneighbourhoodarefundamentaltothebrand.Therefore,wehavelaunchedaseriesofinteractive,online‘NeighbourhoodGuides’thatfeatureacollectionofhyper-localrecommendationsofthingstosee,do,taste,drink,hearandbuyneartothehotel.

Hotel Indigo®

IHG has always been clear about who the guests of the Hotel Indigo® brand are, and what they want. They are upscale and well-travelled. They appreciate art and design, the latest fashion and new experiences. They are looking for the individuality and style of a boutique hotel, but also want the reliability and consistency of a big brand company.


Award-winning

Wecontinuetowinawards–HotelIndigoShanghaiontheBundwasnamedBestBoutiqueHotelinAsia-Pacificatthe2012BusinessTravellerAsia-PacificAwards,arealachievement,andHotelIndigoSanDiegoGaslampQuarterfeaturedasoneoftheTop25HotelsinSouthernCaliforniaintheCondéNast2012Readers’ChoiceAwards.

hotelindigo.com

FarleftHotelIndigoLondonKensington-Earl’sCourt,UK

BelowleftHotelIndigoSanDiegoDelMar,US

BelowrightHotelIndigoTianjinHaihe,China


Americas 37 4,307 23

Europe 10 949 13

AMEA 0 0 6

GreaterChina 3 405 5

Total 50 5,661 47

‘ In 2012, the first Hotel Indigo property in Continental Europe launched in Kurfuerstendamm, Berlin in February, and the overall number of the hotels in Europe doubled to a total of 10.’

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Hotel Indigo 23

Staybridge Suites®

An extended time away from home for business, relocation or holiday should provide travellers with a warm and welcoming environment and the modern comforts of home-like surroundings. This is why travellers choose the Staybridge Suites® brand.

AtStaybridgeSuiteshotels,IHGprovidesupscaletravellerswiththebestofhomeandhotel,allinacomfortableenvironmentwithspaciousstudiosandtwo-bedroomsuites.

With11openingsduring2012,therearenow189StaybridgeSuiteshotelsinTheAmericas,EuropeandAMEAwithanother71inthepipeline.

NotableopeningsfortheStaybridgeSuitesbrandduringtheyearincludedinStratfordCity,LondonintheUK,Hamilton,OntarioinCanadaandNorthBrunswick,NewJerseyintheUS.

Colour and conviviality

Aspartofamulti-milliondollarrenovationprogrammewithownerHospitalityPropertiesTrust,17StaybridgeSuiteshotelsmanagedbyIHGwereextensivelyrenovatedduring2012,withrenovationsattwomorehotelstocome.Usingdistinctiverangesofcolours,patternsandtextures,theenvironmentofthesepropertiesismoreappealingthanever.

Includedintherenovationswereallareasofthehotel,fromthesuitestothepublicspacesandoutdoorareas.Renovationsinsocialareas,suchastheGreatRoom,encompassedtheadditionsoftheGatheringTableandmorecomfortableseating,whicharecentraltothebrand’sconceptofprovidingspaceswhereguestscansocialisewitheachother,especiallyduringbreakfastandTheSocialeveningreception.

TheOutdoorLivingRoom,anotherStaybridgeSuitesfeature,wasalsorenovatedwithall-weatherfurnitureandfirepits,enhancingthecommunityfeelofeachhotel.

Afurtherenhancementin2012wasthelaunchoftheStaybridgeSuitesBeddingCollectionforallpropertiesinNorthAmerica.Thenewbeddingoffersamoremodernisedlook,anelevatedguestperceptionandincreasedcomfort.


staybridgesuites.com

FromfarlefttorightStaybridgeSuitesReno,Nevada,US

StaybridgeSuitesNewcastle,UK

TheSocial,theeveningreceptionatStaybridgeSuites

TheGreatRoomatStaybridgeSuitesTylerUniversityArea,Texas,US


Americas 183 19,787 64

Europe 4 605 1

AMEA 2 304 6

GreaterChina 0 0 0

Total 189 20,696 71

Socialising at Staybridge Suites hotels

WhilegueststendtotheirownschedulesduringanextendedstayatStaybridgeSuiteshotels,therearetimeswhentheywanttoleavetheirsuitesandsocialisewiththeircolleaguesorotherguests.Tofacilitatethis,thebrandhasaneveningreception,TheSocial,whichisheldineveryhotelthreetimesaweekandprovidescomplimentaryfoodanddrinkinthepublicareas–insideandout.Guestscanrelaxinsettingsthatincorporatestackedstonefireplaces,high-definitiontelevisionsandlandscapedgardens,whilemeetingotherStaybridgeSuitesguests.In2012,theStaybridgeSuitesbrandenhancedTheSocialwithnewfoodandbeverageofferingsincludinghealthier,customisableoptions.TheseenhancementswerelaunchedatallhotelsinNorthAmerica.Asaresultguestparticipationandoverallsatisfactionhaveincreasedacrossthebrand.

Engaging through social media

Guestsstayinginhotelsforweeksorevenmonthsatatimeoftenfacechallengeswhileawayfromhome.Inanefforttohelpmakethiseasierforourguests,theStaybridgeSuitesbrandlaunchedacampaignin2012toprovideusefultips,tricksandhintssoguestscouldmaster‘TheArtofTravelingSolo’.Theglobalcampaign,whichfeaturedcelebritychefandtelevisionpersonalityG.Garvin,includedaninteractiveFacebookapplicationwithvideosandhelpfulsuggestions.ConsumersengagedwiththecampaignduringliveFacebookandTwitterchats,sharingtheirowntipsontopicsincludinghowtomakeaquick,tastymealinahotelsuitekitchenandhowtopackforanextendedtrip.

Gold standard

InJune2012–wellintimefortheLondon2012OlympicandParalympicGames–weopenedStaybridgeSuitesLondon-StratfordCity.StepsawayfromtheOlympicPark,thehotelisalsoatthecoreofEurope’slargesturbanshoppingcentre.

It’salocationwithimmediateappealforbusinessandleisuretravellers.PublictransportlinksconnectStratfordtotheCityofLondonandalloftheattractionsofLondon’sWestEndinamatterofminutes.

Co-locatedwiththenewHolidayInnLondon-StratfordCity,thisnewStaybridgeSuiteshoteltakesroomsforthebrandto422intheUK.

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Staybridge Suites 25

CandlewoodSuiteshotels’fully-equippedstudiosandone-bedroomsuitesoffermorespaceforgueststostretchoutandrelaxandprovideindependenceandprivacy,withon-siteamenitiesandservicesalwaysavailableasneeded.

Higher guest satisfaction, higher returns

In2012weopened12newhotels,includingtheCandlewoodSuitesinNorthLittleRock,Arkansas;SanDiego,California;andFredericksburg,Virginia.Thereforewenowhavenearly300CandlewoodSuiteshotelsinTheAmericaswith78inthepipeline.Aspartofamulti-milliondollarrenovationprogrammewithowner,HospitalityPropertiesTrust,59CandlewoodSuiteshotelsmanagedbyIHGwereextensivelyrenovatedduring2012,withtwomorehotelstocompleterenovationsin2013.

TheimprovementsincludednewkitchenandbathroomdesignscreatedinconjunctionwithgraduatestudentsatoneofNorthAmerica’stopinteriordesignschools.ThethemethroughoutisbasedontheconceptofaCandlewoodSuiteshotelasa‘haven’.

Withattractivelighting,naturalcolourpalettes,strikingartwork,flatscreentelevisionsandstorageprovisions,therenovatedsuites,aswellastherenovatedlobbyareasandfacades,aremoreappealingthanevertoguestswhomightspendweeksorevenmonthswithus.

Duringtheyearwealsorefreshedandmodernisedthebrand’sComfortsofHome™BeddingCollection.Thisisdrivingsatisfactionwithourguestsandcontributingtoamorecomfortable,home-likestay.

Withthesenewinitiatives,webelieveoverallsatisfactionwillincreaseandthebrandiswell-positionedtoachieveupliftinaveragedailyratesandRevPAR.

Where the heart is

Greathostshaveprideandpassionintheirpremisesandtheserviceandexperiencetheyoffer.AtCandlewoodSuiteshotels,whereguestsmaystayformonthsatatime,theguestexperienceiscrucialtooursuccess.ThatiswhyweinitiatedtheBrandHeartedServiceTrainingprogrammeinAugust2012.

ThisongoingprogrammeprovidesservicetrainingtohelptoenableteammembersateverylevelofthehoteltobringthebrandtolifeandconsistentlydeliveraBrandHeartedguestexperiencetosetusapartfromourcompetitors.

Successwillbemeasuredintermsofimprovementstoguestsatisfaction,marketshareandrevenue.

Candlewood Suites®

North American-based Candlewood Suites® brand is IHG’s midscale extended stay brand, where guests turn for all the comforts and conveniences of home when, for whatever reasons, home is temporarily left behind.


Americas 299 28,675 78

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Total 299 28,675 78


Encouraging guests to feel free

AtrustsystemhasalwaysprevailedatCandlewoodSuiteshotels.

TheCandlewoodCupboard®haslongbeenaconvenientplaceforgueststofeelfreetostockuponessentialsaswellastreats.Asanintegralpartofourhome-likehotel,allsnacks,easytopreparemeals,beveragesandnon-fooditemsareavailablearoundtheclockonthehonoursystem.

Infactourguestsappreciatethisnotionoftrustsomuch,itwillextendintothenewlylaunchedLendingLocker.There,guestscanborrowitemstheymightusefrequentlyathome,suchascoffeegrinders,ricecookersandblenders.WearegraduallyintroducingthenewLendingLockertoallofourCandlewoodSuiteshotels.

candlewoodsuites.com

FarLeftCandlewoodSuitesNorthLittleRock,Arkansas,US

LeftCandlewoodSuitesSt.Joseph,Missouri,US

BelowThenewLendingLockeratCandlewoodSuites

‘ Great hosts have pride and passion in their premises and the service and experience they offer. At Candlewood Suites hotels, where guests may stay for months at a time, the guest experience is crucial to our success.’

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Candlewood Suites 27

HUALUXE™ Hotels & ResortsIHG launched the HUALUXE™ Hotels & Resorts brand in March 2012, the first-ever upscale international brand designed specifically for Chinese guests focussing on the unique aspects of Chinese etiquette, the importance of rejuvenation, status recognition and enabling spaces that reflect local customs and heritage.

HUALUXEHotels&ResortstakesthebestaspectsofrenownedChinesehospitalityandappliesIHG’sinternationalscale,powerfulsystemsandunparalleledinsightsintotheChinesemarkettoconsistentlydeliverwhatconsumersexpectinChinatoday.

HUALUXEHotels&ResortsisabrandcreatedbyourteaminChinaspecificallyforChineseguestswhowantabrandthathasinternationalstaturebutyetrespondstotheircustoms,traditionsandtastes.

ThegrowthopportunitypresentedbyHUALUXEHotels&Resortsisbothinternalandexternal.Thehotelindustryisprojectedtohavecontinuedstronggrowth,withtourismofficiallynotedasoneofthestrategicpillarindustriesintheGovernment’s12thfive-yearplan,increasedurbanisation,andemergingmiddleclasswithmorespendingpower;whileoutboundtripsfromChinaareprojectedtogrowfrom10millionayeartomorethan100millioninthenext10to15years.

IHGisthelargestinternationalhoteloperatorinGreaterChina,withmorethan180hotelsacross60citiesandafurther160hotelsinourpipeline.With15hotelsalreadyinthepipeline,theHUALUXEHotels&ResortsbrandwillnotonlyenableustocontinuetoexpandinChina’skeygatewaycities,butalsodrivegrowthinsecondarycitieswhereaspecificallyChineseofferisparticularlyappealing.

AndweexpecttobeabletoopenhotelsinmajorcitieselsewhereintheworldsothatChinesetravellerscanenjoytheHUALUXEHotels&Resortsexperienceabroad.

‘ HUALUXE Hotels & Resorts is a brand created by our team in China specifically for Chinese guests, who want a brand that has international stature but yet responds to their customs, traditions and tastes.’


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AboveleftHUALUXEHotels&Resortsteahouse,artistimpression

AboverightHUALUXEHotels&Resortsguestroom,artistimpression


EVEN™ HotelsIHG designed the EVEN™ Hotels brand to uniquely provide solutions for all aspects of both business and leisure travellers’ holistic wellness needs. Our guests want to maintain their balance and well-being on the road and we’re here to help them.

LaunchedinFebruary2012,EVENHotelsspecificallyrespondstoextensivecustomerresearchthattellsusguestsarefrustratedwithstayinginhotelsthatdonotmeettheirwellnesslifestyleneeds.WithEVENHotelswe’renotcreatinganewhotelsegment,butratherstakingourclaimonthewellnessspacewithinthemainstreamlifestylecategory.Anyhotelbrandcanaddayoghurtparfaittotheirmenu,butthat’sfarfromdeliveringaholisticwellnessexperienceandserviceculturethatputsguestsateaseandallowsthemtorest,eat,exerciseandworkontheirownterms–whichisexactlywhatEVENHotelswilldo.

Thecontinuedinterestinwellnessacrossindustriesfurthervalidatesanddemonstratestheneedforthebrand,andreinforcesourconfidenceinlaunchingEVENHotels.Initially,EVENHotelswillopenhotelsintheUS,butwewillcontinuetodevelopthebrandfurtherovertimeinordertogrowwhereverourcustomerisandtoreachaglobalmarket.

ThebrandsigneditsfirstpropertyinOctober2012.LocatedintheheartofmidtownManhattan,itwillbeaflagshippropertyforEVENHotels.Weexpecttosign100EVENHotelsintheUSinthenextfiveyearsinkeymarketsincludingNewYork,WashingtonD.C.andSanFrancisco.


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evenhotels.com

‘ EVEN Hotels specifically responds to extensive customer research that tells us guests are frustrated from staying in hotels that do not meet their wellness lifestyle needs.’

AboveleftAnEVENHotelsproperty,artistimpression

AboverightEVENHotelsexterior,artistimpression

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HUALUXE Hotels & Resorts and EVEN Hotels 29

People

The strength of our Brands relies on us having talented and passionate People. So for us to deliver on our brand promises we need to hire and inspire talented people to service our guests and bring our brands to life.

AttheheartofouremployerbrandareourWinningWays

Being BrandHearted

OurVisiontobecomeoneofthegreatcompaniesintheworldrequiresustomakeourBrandsbigger,betterandstrongerthaneverbefore.ThismeansgrowingourbusinessbymakingourBrandsthefirstchoiceforourguestsandowners.OurPeopleplayakeyrolebydeliveringourbrandpromisesdayin,dayout.ToachieveourVisionweneedtoattracttheverybestpeople,harnesstheirpassionandequipthemwiththerightskillstogiveourguestsatrulygreatexperience.

Ourleadersarecentraltooursuccess,theyneedtoinspiretheirteamstoputourBrandsatthecentreofeveryconversation,everyideaandeverydecisiontheymake.In2012,weintroducedtheLeadershipFramework,whichisournewglobalapproachtoleadershipatIHG.ThismakesiteasyforourPeopletounderstandwhatgreatleadershiplookslikeandwhatskills

andexperiencestheyneedtomovetothenextlevelintheircareers.Additionally,wecontinuetosupportourleaderseverydaythroughouraward-winningLeadersLounge,acontemporarywayofsharinglearningwithourleadersonline.

An employer of choice

Becominganemployerofchoiceisdependentonushavingastrongemployerbrand.Thisiswhyweinvesttimeinsupportingourownerstomeetthechallengeoffinding,developingandretainingtheverybestpeople.

WeofferPeopleToolstoourhotels.Theseareasuiteofpracticaltoolstohelphotelshire,train,involveandrecognisetheiremployees.Sofar96percentofourGeneralManagersusingthemwouldrecommendthemtoothers.Webelievethisisapointofdifferentiationcomparedtoourcompetitors.

AswellascontinuingtodriveawarenessaroundourPeopleTools,wehavealsoworkedtomakeiteasierforhotelstoaccessthem.In2012,welaunchedHotelSolutionswhichprovideshotelswithasinglegatewaytoaccessthefullsuiteofPeopleTools.HotelSolutionsalsoencouragescollaboration.ThroughourSystemweareabletoharnessthecollectiveknowledgeacrossallofourhotelsaroundtheworld,anotherexampleofusleveragingourSystemsizeforthebenefitofourhotels.Sinceitslaunch,71percentofhotelshavebeenusingitregularly,withGeneralManagerssavinganestimatedthreetofourhourseachmonthonadministrativetasks.HotelsusingHotelSolutionshavealsoseenimprovementsinguestsatisfactionscores.

Weareveryproudoftheexternalrecognitionwereceiveacrosstheglobeasanemployerofchoice.Forexample,in

LeftTiffanyChen,JenniferHowardandAbdullaAlRumithi

BelowMorethan4,000hotelsacrosstheglobeparticipatedinCelebrateServiceweek


2012,wefeaturedinTheSundayTimes25BestBigCompaniestoWorkFor;receivedrecognitionforouremployerbrandatthePersonnelTodayAwards2012;wererecognisedasoneofIndia’sBestCompaniestoWorkFor;wontwoawardsrecognisingourgraduatedevelopmentprogrammes;andwererecognisedasbeingoneofthe100BestHumanResourceManagementCompaniesinChina.

Employee engagement

WhenwelistentoourPeopleandrespondtotheirneedswedrivebetterbusinessresults.Thiswasproveninarecentstudywecommissionedthatexaminedthelinkbetweenemployeeengagementandhotelperformance.Thestudyfoundthedifferenceingrossoperatingprofitmarginbetweenhotelswithhighlyengagedpeoplecomparedtothosewithlowerengagementtobeasmuchassevenpercentagepoints.Italsoshowedthatwhenwecomparedhotelswhereengagementhadincreased,againstthosewhereithadnot,wefoundthatforeveryfivepercentagepointincreaseinengagement,therewas,onaverage,70centsofincreasedRevPAR.Thatmeansfora200-bedhotel,theRevPARincreasecouldgenerateanadditional$50,000ofrevenueperannum.

96percentofemployees(thosedirectlyemployedbyIHGandthoseworkinginourmanagedhotels)tookpartinour2012employeeengagementsurvey.Theresultswereimpressivewith94percentofrespondentssayingtheyareproudtoworkforIHG–whichis20percenthigherthanindustrybenchmarks.Ourengagementscorescontinuetoimproveyear-on-yearandwehaveseenan18percentagepointincreaseacrosstheGroupinthelastfiveyears.

Employee recognition

Recognisingachievementisanimportantdriverofemployeeengagementforusandthat’swhyeveryyear,throughCelebrateServiceweek,werecogniseourcolleaguesforthegreatworktheydotogiveourguestsanenjoyablestay.Theweek,whichwasinstigatedbyandruninpartnershipwiththeIHGOwnersAssociation,thisyearsawmorethan4,000hotelsparticipating.

In2012welaunchedBravo!,anonlinepeer-to-peerrecognitiontoolthatgivesourcolleaguesthemeanstopubliclyrecogniseeachother’sworkandefforts.WeprideourselvesonourabilitytorecognisegreatBrandHeartedbehaviourinternally.Todatemorethan25,000Bravos!havebeensent,provingourPeoplereallyvaluetheopportunitytobeabletogiveandreceiverecognitionfromtheirpeers.

Looking ahead

Tomeetourgrowthtargetsandexpandinemergingmarkets,inthenextfewyears,weneedtofindanadditional90,000BrandHeartedcolleagues–peoplewhocanliveandbreatheourBrands,withtherightpersonalitytodelightourguests.

Perhapsoneofthebiggestrecruitmentchallengeswefaceishowweleveragethestrengthofourglobalemployerbrandwhilebeingsensitivetothelocalmarketsinwhichourhotelsoperate.InGreaterChina,wehavecreatedanewrecruitmentsiteinMandarinandhavelaunchedcareerpagesonsocialnetworkingplatformssuchasWeiboandRenren(thenumberonesocialmediaplatformamongstcollegestudentsinGreaterChina).

Asfurtherexplainedonpage35,aspartofourResponsibleBusinesspractices,wecontinuetohaveapositiveimpactonthecommunitiesweservethroughourIHGAcademyprogramme.Thisprovideslocalpeoplewiththeopportunitytobuildanddeveloptheirskillsandimprovetheiremploymentprospects.Withover150IHGAcademyprogrammesin37countriesaroundtheworld,itwillhelpuscreateapipelineofpotentialrecruitsandfuturetalent.

OneofthemostimportantrolesfordrivingthesuccessofourbusinessisourhotelGeneralManagers.ThisiswhywearelaunchingournewGeneralManagerTrainingprogramme–designedtoshiftourmindsetawayfromsimplycreatinggreathotelmanagerstodevelopinggreatBrandmanagers.TohavepreferredBrands,weneedthebestGeneralManagersintheindustry.Therefore,wehaveinvestedheavilyinourapproachtohiring,traininganddevelopingthem.ThishasbeenthefocusofoursharedagendawiththeIHGOwnersAssociationandweareproudtohaveworkedwiththemtodevelopthisprogramme,whichwillberolled-outinitiallytonewHolidayInnandHolidayInnExpressGeneralManagersfromthefirstquarterof2013.

WearealsofurtherstrengtheningIHG’sperformancecultureinourcorporateofficesbybetterlinkingIHG’sperformancetargetsandreward.Startingwithourseniorleaders,wehaveamendedtheperformancemeasuresunderourannualincentiveplantoalignitmorecloselytoourstrategicprioritiesofBrands,PeopleandDelivery.

AtIHG,itisourPeoplethatdelightourguestsandinturnkeepourbrandpromisesandhelptobuildpreferenceforourBrands.In2013,wewillcontinuetobuildcapabilitytohiretheverybestpeopleandequipthemtogivetheirbesteveryday.ThisisanexcitingtimetobeatIHGaswecommittobecomeoneofthegreatcompaniesintheworld.

“Our People are the difference. They bring our Brands to life. That’s why we place so much focus and effort on ensuring they feel truly respected and valued. We know that when our People feel loved they love our guests and our owners see the impact on business results.”

Tracy Robbins Executive Vice President, Human Resources and Group Operations Support

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People 31

Driving profitable revenue

WhenahoteljoinsIHG,itconnectstoapowerfulsystemofrevenueplatforms,programmesandtoolsdesignedtoachieveasingleoutcome:drivingprofitablerevenue.

Profitablerevenuecreatesastrongermarginandgreaterreturnsforourowners.

IHG’spowerfulrevenuesystemsgenerate69percentofroomsrevenuesdirecttoourhotelsglobally.AndallofthissitsonastrongtechnologyfoundationthathelpsIHGsucceedincreatingpreferredBrands,drivingrevenueandenhancingownerreturns.Oursystemincludesourglobalbusiness-to-businesssalesprogrammes,onlinemarketingstrategies,reservationschannels,directtoconsumermarketingcampaigns,revenuemanagementtoolsandstrongloyaltyprogramme.Wedeploythesesystemsandplatformstobettermanageeverystepoftheguestexperience.

Attracting travellers to our brands

Akeypartofourdemandstrategyincludesoursalesteams,whoarecultivatingthoseimportantbusinesstobusinessrelationshipsthatdriveawareness,trialandusageofourbrandsamongsomeofthehighestvolumeguests.Ourgoal?WewantthesecompaniestochooseourBrandseverytimetheytravel.Andwe’reseeingsuccess.In2012,oursalesteamsmanagedmorethan2,000accountsglobally,drivingalmost$5billionintotalhotelrevenue,up12percentcomparedto2011.

Theonlineexperiencehasbeenexpandingexponentially,andIHGisattheforefront.Withastrongfocusonsearchengines,wemanagemorethaneightmillionkeywordsinmultiplelanguagestodirecttravellerstoourbrandswhentheyresearchanupcomingtrip.Ouronlinemarketingprogrammesgeneratedmorethan$1.4billionintotalhotelrevenuein2012.

Addtothistheresultsfromourpowerfulsearchengineoptimisationstrategy,whichdrovemorethan26percentofthetotaltraffictoourwebsitesin2012,andyoucanseethatweareamajorplayeronline.

Ourmobilestrategyhasalsobeenverysuccessful.Injustthreeyears,ourrevenuesfrommobiledeviceshavegrownfrom$2.4millionin2009tomorethan$330millionin2012,helpingtoleadthewayinwhichguestsbook.

Wehavetheresourcesandsystemstodowhatnoonehotelcoulddoonitsown.Withasophisticateddatabaseandanalyticalmarketingapproach,weoffertargetedcampaignsbasedonguestpreferences,marketingtotherightguestattherighttime,withtherightmessagetodrivethemtobookanIHGhotel.

Turning online shoppers into buyers

Onceweattractguestswithoursalesandmarketingefforts,wecompelthemtobook.Today’sonlineshoppingexperienceoffersmanywaystobookandconsumersarecomparingandshoppinglikeneverbefore,sowehaveclearstrategiestoconvertmoreshoppersintobuyersthroughourdirectchannels.

Delivery

IHG has a powerful system of tools and programmes, including our brand websites, mobile applications, call centres around the world, award-winning loyalty programme and revenue management and sales processes. All of these are designed to drive growth and profitable revenue into our hotels.

“Technology is playing an even greater role in differentiating our business and our Brands, providing best-in-class products and services to our guests, no matter how and where they shop. As consumers become more connected and socially engaged in the digital world, IHG has recognised technology as a key enabler in delivering on our brand promise.”

Eric Pearson Executive Vice President and Chief Information Officer


Weoffercontent-richbrandwebsitesthatexperiencedmorethan227millionvisitsin2012andgeneratednearly$3.4billionintotalhotelrevenue.

Weworktogetherwithourhotelstoensurethatwehavethebestoffersandcontentonourwebsitestogivetherightinformationneededtoourgueststocompletetheirbooking.WehaveunderscoredthevalueofourbrandwebsiteswiththelaunchofourGuestRatingsandReviewstoolonourwebsites,anintegrationoftravellerreviews,whichgiveguestsadditionalinformationtomakethehotelchoicethatisrightforthem.

Andtoensurethatwearetakingeveryopportunitytoconvertconsumersonline,in2012IHGbecameafoundingpartnerinroomkey.com,aninnovativenewhotelsearchenginethatofferstravellerscomprehensiveinformationandasimplifiedsearchexperiencecreatedbysixoftheworld’sleadinghoteliers.Thisisanadditionalshopwindowforourhotels,makingiteasierforcustomerstobook.

Whenourcustomersprefertospeakwithsomeone,our10callcentresaroundtheworldarestaffedwithtrainedreservationsagentsreadytorespondtocalls,emailsandchats.In2012,ourglobalcallcentresansweredmorethan23millioninboundcontactsanddrovemorethan$1.9billionintotalhotelrevenuetoourhotels.

The right room at the right price

Withover157millionguestnightsinIHGhotelseachyear,itisessentialforustopriceourhotelseffectivelytomaximiseowners’returns.

That’swhywehavedevelopedour‘PriceOptimization’tool,whichsupportshotelstomakethebestpricingdecisionsbasedonavarietyofsophisticatedalgorithmsthatconsiderhistoricaldemandpatterns,competitivepricingandforwardeconomicindicators.

Additionally,in2012wecreatedandpilotedpricingandrevenuemanagementtoolstosupporthotelsacrossotherpiecesoftheirbusinessincludingmeetingsandfoodandbeverage.

Keep guests coming back

AtIHG,loyaltyisledbyouraward-winningPriorityClub®Rewardsprogramme,whichcultivatesourguestsintoloyal,repeatcustomersandadvocatesofourbrands.Ourloyalcustomersareourmostprofitablecustomers–theystaymorefrequentlywithIHGhotels,booktheirstaysvialower-costreservationchannelsandengageinpositivesocialconversationaboutourbrandsandhotels.

PriorityClubRewardsisanaward-winningprogrammeofferingourmembersavastarrayofpointredemptionopportunities.Thiscustomervaluepropositionhastranslatedintostrongcustomerattraction

andengagement.MembershipinourPriorityClubRewardsprogrammegrewtomorethan71million–up13percentover2011.AndPriorityClubRewardscontinuestobeheraldedas‘best’byindustryadvocatesbeingnamedGlobalTravelermagazine’sBestHotelRewardsProgramin2012fortheeighthconsecutiveyearandwinningPremierTravelermagazine’sinauguralawardforBestHotelLoyaltyProgram.

Technology with a purpose

IHGhasbeenaleaderinpioneeringtechnologythatenablesourbusinesstointeractmoreeffectively,moreoftenandinmorewayswithourcustomers.Wefocusoninnovationthatallowsustoleveragetechnologytodeliverasuperiorguestexperiencewhileenhancingownerreturns.

“Our mission is to drive incremental, profitable revenues to our hotels so that our Brands outperform the industry and our owners achieve higher returns.”

Steven Sickel Interim Global Head of Sales and Distribution

Topiqueculinaryinterests,wecreatedaniPadappshowcasingacollectionofrecommendedrecipesfromtopInterContinentalHotels&Resortschefs

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Delivery 33


With over 4,600 hotels in nearly 100 countries and territories around the world, our commitment to being a Responsible Business is central to our Vision of being one of the great companies in the world. Our People understand how important it is to champion and protect the trusted reputation of IHG and its brands and this is embedded in our culture.

Tourismplaysalargeroleintheworldeconomyandisanimportantsourceofwealthformanycountries,butwemustacknowledgethatourindustry,likemanyothers,facesincreasingpressuretobalanceitseconomicperformancewithitssocialandenvironmentalimpacts.Thatiswhy,forus,ResponsibleBusinessunderpinseachofourthreestrategicprioritiesofpreferredBrands,talentedPeopleandbest-in-classDelivery,whichworktogethertodetermine‘Howwewin’tocreateGreatHotelsGuestsLove.

WebelievethatbeingaResponsibleBusinessisnecessarytoenableustostayaheadofthecompetitionandgrow,creatingvalueforallofourshareholdersandstakeholdersinthelong-term.Amongstotherthings,itoffersusahugeopportunitytoinnovate,createemployment,empowerpeopletoperformattheirbestandfeelgoodaboutwhattheydoanddrivevalueforourbusiness.

Governance and leadership

OurChairmanandtheBoardprovidestrongleadershipandpromoteaResponsibleBusinessculture,bymaintaininghighstandardsincorporategovernance,corporateresponsibility(CR)andinternalcontrolandriskmanagement.SupportingthemisarangeofBoardCommitteesandateamoflawyers,compliancespecialists,charteredsecretaries,internalauditorsandriskmanagers.Theteam,deliberatelynamedBusinessReputationandResponsibility,continuallyworktomonitorchangestolegal,regulatorycomplianceandCRconceptsandimplementtheBoard’sinternalcontrolsandpoliciestoensurethatwe,asabusiness,remainexcellentatbeingresponsible.

Brands

OurBrandsofferapromiseandintegraltothisistrust.Trustedbrandsdeliverasuperiorandconsistentbrandexperience

andtoachievethis,werequireaclearbrandframework.Brandstandardsarethefoundationsofaclearbrandframeworkforallourhotelsandourcomplianceteamsensurethatourhotelsdeliverinaccordancewithourbrandstandards.Ourbrandsafetystandardsarealsodesignedtoassisthotelsinprovidingasafeandsecureenvironmentforourguestsandemployees.Dealingwithrisksrangingfromfireandfoodhygienetoterrorism,ourbrandsafetystandardshavebeenrecognisedasbest-in-class.Ourteamofriskmanagersisdedicatedtoprovidingtrainingandmonitoringtheimplementationofoursafetystandardsforsafeandsecurehotels.

People

AtthecoreofbeingaResponsibleBusinessisensuringthattheactionsofallofouremployeesworkingatourcorporateofficesandhotelsmaintainourtrustedreputation.Operatinganethicalbusinessisvitaltomaintainingandprotectingthistrustedreputationandthereforewecontinuallykeepunderreviewourinternalpolicies,includingourCodeofEthicsandBusinessConduct,Competition,DataPrivacyandAnti-Briberypolicies.TheseareregularlycommunicatedviaeLearningandface-to-facetrainingmodulespromotingaccountabilityandtransparency.

Delivery

HavinginplaceaneffectivesystemofinternalcontrolsandriskmanagementisessentialtobeingaResponsibleBusiness.InmakingkeybusinessdecisionstheBoard,ExecutiveCommitteeandAuditCommitteeworktogethertoidentify,assess,prioritiseandmitigaterisks,includingstrategicandoperationalrisks.SuchCommitteesrelyheavilyonourdynamicriskassessmentandassurancemappingprocessandhighlyconsistentinternalauditmethodologytoprovideanappropriatelevelofassuranceforall

stakeholders.Safetyandsecurityisanabsoluterequirementforanygueststayingatourhotels.Ouraward-winningriskmanagement,safetyandsecuritytrainingcourses,toolkitsandmaterials,suchasourCrisisandIncidentHandlingprogrammes,enableustoworktogethertocreatesafeandsecureenvironmentsatallofourhotelsandcorporateoffices.Thesetools,processesandproceduresensureabusinessbasedonasolidfoundationwithacommitmenttodoingtherightthingforthebenefitofallourstakeholders.

Corporate Responsibility (CR)

AbigpartofResponsibleBusinessishowIHGandourhotelsactinourlocalcommunitiesandhowwemanageourenvironmentalimpact,whatwecallCR.WetreatitasastrategicbusinessissueandthereforebelieveCRonlymakessenseifitalignstoourVision.Wealsobelievethatincorporatingsocietalandenvironmentalfactorsintoourbusinessstrategyandoperationswillplayavitalroleinthelong-term,bothforourbusinessandthetravelandtourismsector.Forthatreasonweaimtoharnesstherolehotelsplayinsocietytocreatesharedvalueforourbusiness,ourguestsandthecommunitieswhereweoperate.

WebelievewecanmaketourismresponsiblebyconcentratingourCRactivitiesintwoareas,theenvironmentandthelocalcommunity,wherewecanmakethemostdifference.WeaimtomakeadifferencethroughourthreecoreCRprogrammes:GreenEngage,IHGAcademyandtheIHGShelterinaStormProgramme.Theseprogrammeshavebeendesignedsothattheycanbeimplementedinanyofourhotelsandcorporateofficesinanyregion.


GreenEngageTheenvironmentalimpactofourhotelsismanagedthrougheverystageofthehotel’slifecyclebyGreenEngage,ouronlinesustainabilitymanagementplatform.GreenEngageprovideshoteloperatorswithadviceoneverythingfrompickingthemostappropriatesiteandselectingthemostenergyefficientlightingforthehotelthroughtochoosingresponsiblecleaningmaterialsandprovidingemployeetrainingonenvironmentalsustainability.UseofGreenEngagecansaveupto25percentofenergyusageandistrulybeneficialforourhotels,guestsandtheenvironment.GreenEngagehelpsustrack,manageandreducetheuseofenergy,carbonandwaterandthemanagementofwasteinourproperties.GreenEngagehelpsusfulfilourcommitmenttodobusinessresponsiblyand,inturn,thisstopshotelslosingmoneyonenergycosts.Energyisthesecondbiggestcosttohotels–theaverageIHGhotelspendsover$500,000onenergyusageeachyear.ConductingbusinessresponsiblyalsoboostssalesasGreenEngagehelpsourhotelsattractguestsandcorporateaccountswhoincreasinglywantagreenerhotelstay.Ultimately,weaimtocreatenewandbetterwaystodesign,buildandrunourhotels.Over2,260hotelsnowuseGreenEngageandouraimistohaveourentireestatetracking,managingandreportingitsenvironmentalimpactovertime.

IHGAcademyTheIHGAcademyisacollaborationbetweenindividualIHGhotelsorcorporateofficesandlocaleducationprovidersand/orcommunityorganisationsprovidinglocalpeoplewiththeopportunitytodevelopskillsandimprovetheiremploymentprospects.WithinaconsistentglobalframeworkeachIHGAcademyisuniqueandtailoredtomeettheneedsoflocalcommunitiesandhotelsaroundtheworld.AllIHGAcademyprogrammeshavethreethingsincommon:• theyoperatetogetherwithlocal

communityorganisationsand/oreducationproviders;

• theyincludeaworkexperienceplacement,givingparticipantsskillsandrealexperienceofworkinginahotel;and

• theyincludeperformancefeedbackandarecruitmentdiscussion,givingparticipantsanopportunitytogainrealexperienceofthejobinterviewprocess,therebyimprovingtheirchancesoffindingajobinthehotelsectorandinmanycases,securingajobinanIHGhotel.

ParticipantswhogothroughtheIHGAcademycomefromallwalksoflifeandrangefromuniversitygraduatesthroughtodisadvantagedyoungpeople,reflectingtherangeofcareers,aswellasopportunityforprogression,availableatIHG.Currentlywehavemorethan150IHGAcademyprogrammesin37countriesaroundtheworld,withthe150thopeningrecentlycelebratedinBeijing,ChinainJanuary2013.OurIHGAcademyinNewham,EastLondon,establishedin2012,supportsthelegacyoftheLondon2012OlympicandParalympicGames.OurabilitytobuildskillsandraiseaspirationsacrosshundredsofcommunitiesthroughthisprogrammewillcontinuetodriveourcommitmenttotheIHGAcademyandhelpustransformhospitalityformoresustainablecommunitiesandbetterlives.

www.ihgacademy.com

IHGShelterinaStormProgrammeThroughtheIHGShelterinaStormProgrammeourhotelsreceiveguidanceonwhenandhowbesttorespondwhennaturalorman-madedisastersoccur.OurglobalpartnershipwithCAREallowsustodrawonexpertiseinhumanitarianassistanceandhelpsusfindappropriatepartnersintheareawhendisasterstrikes,directinghelptowhereitisneeded.Whenadisasteroccurs,fundsfromtheIHGShelterFundcanbeallocatedtoenableourhotelstorespondquicklyandeffectivelytosupportourguests,employeesandthelocalcommunitywithfinancialsupport,vitalsuppliesandaccommodation.TheIHGShelterFund,apooloffundscollatedfromfundraisingfromhotelsandcorporateofficesthroughouttheyear,isakeyelementoftheIHGShelterinaStormProgramme,enablingustorespondquicklywhendisasterstrikes,insteadofwaitingtoraisefundsaftertheevent.In2012,$545,000wasraisedfortheIHGShelterinaStormProgramme.During2012,thefundwasputintoactiontosupport10disastersacrosssixcountries,includinginresponsetoseverefloodingandacycloneinFiji,SuperstormSandyontheUSEastCoast,floodinginManilaandtheUK,wildfiresinColoradoandHurricaneIsaacontheUSGulfCoast.OneachoccasionweassessedthedamagetotheIHGhotelsandtheimpactontheiremployeesandcommunities,andallocatedfundsfromtheIHGShelterFundtohelpthoseaffected.

www.ihgshelterinastorm.com

“Being a Responsible Business will enable us to stay ahead of the competition and grow, creating value for all of our shareholders and stakeholders in the long-term. That’s why Responsible Business underpins Brands, People and Delivery.”

George Turner Executive Vice President, General Counsel and Company Secretary

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Responsible Business 35

Responsible Business continued

Stakeholder engagementOurstakeholdersplayakeyroleinhelpingusidentifyandtackleourpriorities,andourstrategyistocreatesharedvalueforourbusinessandstakeholdergroups.Weengagewithallourstakeholders,includingshareholders,throughavarietyofchannels,includingforums,meetings,individualinterviews,surveys,reportsandconferences.FordetailedinformationonourapproachtoCRandourkeyprogrammes,ouronlineCorporateResponsiblyReportcanbeviewedat:

www.ihgplc.com/responsibility

Ournewestchannel,the‘IHGPlanetCR’Facebookpage,hasquicklygrowntoacommunityofover20,000fansandprovidesachannelforustoraiseawarenessofourCRprogrammesdailyandactivelyengageinatwo-waydialoguewithourstakeholders.

www.facebook.com/IHGCorporateResponsibility

External recognitionIn2012,wewere:• awardedtheBestRiskTraining

ProgrammebytheStrategicRiskManagementAwards2012forourriskmanagementprogramme;

• awardedtheBronzeawardatthe2012TrainingJournalAwardsfortheBestUseofTechnologyinLearning;

• namedasoneofthetop10InnovativeLegalDepartmentsbyInsideCounselmagazineintheUS;

• awardedSilverAwardintheBestLawDepartmentcategoryattheInternationalGeneralCounselsAwards;

• awardedtheGlobalBusinessTravelAssociationGoldMedalAwardforSustainability;

• awardedtheHotelOwners’andFranchisees’TransatlanticandEuropeanLeagueOwnerFriendlyInnovationAwardforGreenEngage,recognitionthattheprogrammeisofvaluetoourhotelowners;and

• shortlistedfortheWorldEnvironmentCentreAwardforSustainability,makingittothefinalroundwithGreenEngagecommended.

LeftInterContinentalResortAqabatakespartinResponsibleBusinessweek2012

BelowIHGAcademylaunchinNewham,EastLondon.AttendedbytheUKDeputyPrimeMinister,NickClegg,andRichardSolomons,ChiefExecutive

AboveCelebratingthe150thIHGAcademyopening,Beijing,China


View from Hotel Indigo shanghai on the Bund, china

Where we compete

We operate 4,602 hotels and 675,982 rooms in nearly 100 countries and territories around the world. Our business reflects the profile of our major markets and is structured into four operating regions: The Americas; Europe; Asia, Middle East and Africa; and Greater China.

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Responsible Business and Where we compete 37

Performance highlights

Revenueperavailableroom(RevPAR)up6.1%

Revenueup0.8%to$837m†

Operatingprofit*up7.8%to$486m†

†Includesonesignificantliquidateddamagesreceiptin2012of$3m.

*Beforeexceptionalitems.

Number of rooms by business model

Franchised407,849

Managed39,583

Owned&leased2,185

Room and hotel numbers

Totalroomsopen449,617

Roomsinpipeline72,573

Totalhotelsopen3,555

Hotelsinpipeline670

A vital regionThisyearwehaveopened148hotelsinTheAmericasregionandincreasedourRevPARby6.1percentwiththeUSoutperformingtheindustry.TheUSaloneaccountsformorethanaquarterofglobalhotelspendingandoverthenextdecade,willcontinuetobeasignificantgrowthmarketforIHG.

EVENTM HotelsInFebruary,welaunchedournewEVENHotelsbrandandinOctober,wesignedthefirsthotelunderthebrand–anewbuildinNewYorkCity.Itisthefirsthotelbrandinthelifestylespacethatismainstreamandaimedathelpinghealthy-mindedguestsstaybalancedwhiletravelling.Asthewellnesssectorcontinuestogrow,sotoodoestheneedforthebrand.

Extended stayExtendedstayhotelsareabigsegmentinNorthAmerica–whereweopened22newhotels.HospitalityPropertiesTrust,anowner,committed$165milliontorenovate80StaybridgeSuitesandCandlewoodSuiteshotelswithdesignandfunctionalityimprovements.

Focussed expansionIHGisthelargesthotelcompanyinMexico,with121hotelsand38inthepipeline.ThisyearweopenedthePresidenteInterContinentalSantaFeMexicoandtheHotelIndigobrand’sonlypropertyinMexico–HotelIndigoVeracruz

BocadelRio.WeremainapreferredemployerinCanadawhereourrobustpipelineof33hotelswillcreateevenmoreneedfortoptalent.Withthegrowthofthemiddleclassthroughouttheregion,wehavealsoseenactivedevelopmentinLatinAmericaandtheCaribbeanacrosstheHolidayInnfamilyofbrandswithopeningsorsigningsinBrazil,ColombiaandGrandCayman.

Army hotelsOurArmyhotelsportfoliocontinuestotakeshapeaspartoftheUSgovernment'sPrivatizationofArmyLodgingsinitiative.FormerArmy-runpropertiesintheUSandPuertoRicowererenovatedduringtheyear.Thenumberofhotelswillcontinuetogrowin2013,reachingabout80hotelsand12,000roomsonArmyinstallations.

IHG Shelter in a Storm ProgrammeWhenHurricaneSandydevastatedtheEastCoastinOctober,wepartneredwiththeIHGOwnersAssociationtoraisemoneythroughemployees,ownersandPriorityClubRewardsmembersanddonationswenttotheIHGShelterFund(partoftheIHGShelterinaStormProgramme).Over$100,000wasallocatedfromtheIHGShelterFundtoprovidetemporaryshelterandemergencysuppliestoaffectedemployeesandthecommunity.

“In 2013, IHG launched the EVEN Hotels brand in the US, within a month of launching HUALUXE – an entirely different hotel brand in an entirely different market. This tells you something about our ambition as a company and the ability of our People to deliver.”

Kirk Kinsell President, The Americas

The Americas

The Americas accounts for more than a third of global hotel spending and represents two-thirds of IHG’s hotel rooms. Over the next decade, The Americas will continue to be a significant growth market for the hotel industry and we are a key player.

HotelIndigoVeracruzBocaDelRio,Mexico




Revenueup7.7%to$436m

Operatingprofit*up10.6%to$115m



Franchised79,899

Managed21,211

Owned&leased917




Totalhotelsopen628

Hotelsinpipeline91

2012hasbeenanexcellentyearforEuropeinspiteofthetoughmacroeconomicclimate.Weopened39hotelsandsignedanother48.

Priority markets

TheUKcontinuestobeourbiggestmarketwhereweexceededthenumberofsigningsfromlastyearandalsoopenedourfirstnewInterContinentalHotelinLondonforover36years–InterContinentalLondon-Westminster.

InGermany,whereourstrategyfordevelopmenthasfocussedonpartneringwithownerswhocanunlockmultipledeals,wesignedsevenindividualhoteldealsandonenewmultipledevelopmentagreement.

Inadditiontothelarger,scalemarkets,weareactivelygrowinginRussiaandtheCommonwealthofIndependentStates(CIS).Ourextensivelocalresearchhashighlightedasignificantopportunityinthemidscalesegmentandamongstbusinesstravellers.ThisisaneedthatHolidayInnandHolidayInnExpressareperfectlysetuptomeet.

Ourlong-termgoalistogrowourestateinRussiaandtheCIStoover100hotels.Someofthehighlightsin2012werethelaunchofaRussianlanguagewebsiteandtheopeningofanIHGAcademyinMoscowtosupportthetraininganddevelopmentoflocaltalent.

Hotel Indigo

Wecontinuetodriveexcellentprogresswithourbrandedboutiqueoffer,HotelIndigo.TheneighbourhoodstoryconceptattheheartofthebrandfitswellintoEuropeancities,whichcanalsoprovideamplepropertiesforconversion.SinceintroducingthebrandtoEuropein2008,we’veopened10hotels,eightintheUKandtwoinGermany,andtherearenow13inthepipeline.TheseincludetherecentsigningofHotelIndigoBarcelona-PlazaCatalunyaandourfirstHotelIndigopropertyinIsrael,whichwillopeninTelAvivin2013.

Olympic sponsorship

HolidayInnwastheofficialhotelprovidertotheLondon2012OlympicandParalympicGames,andhelpedhostathletesattheOlympicVillage,somethingfromwhichallofIHGdrewenormouspride.

PartofthelegacyoftheGamesarethetwonewIHGhotelsneartotheOlympicsite–HolidayInnLondon-StratfordCityandStaybridgeSuitesLondon-StratfordCity,London’sfirstStaybridgeSuitesproperty.Thesecreated120permanentjobs,andarealsosupportinganewIHGAcademyinthelocalboroughofNewhamthatwilltrainaround50participantsayear.

“IHG is winning in Europe. My definition of winning is to be the preferred choice for guests, the preferred choice for investors, and the preferred choice for our employees.”

Angela Brav Chief Executive, Europe

Europe

Our strategy in Europe is to achieve high-quality growth by focussing on key cities across Europe, and building national scale in priority markets. In these markets, we want to be in a leadership position.

OlympicandParalympicmarathonstarsPaulaRadcliffeandShellyWoodshostatrainingsessionforHolidayInnguestsaspartoftheLondon2012sponsorshipprogramme

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The Americas and Europe 39







Franchised10,860

Managed51,290

Owned&leased587




Totalhotelsopen232

Hotelsinpipeline132

WeendedtheyearstronglywithRevPARgrowthof4.9percentandanactivepipelineof132hotelswith36newsigningsin2012.WealsoexceededourtargetfortheIHGAcademyprogramme,with59IHGAcademyprogrammesacrosstheregionreadytoprovideskillsdevelopmentandimproveemploymentprospects.

Seizing opportunities AMEAisIHG’smostgeographicallydiverseregion.Weoperate232hotelsinover37countries,coveringamixofmatureandemergingmarkets,resortsandurbanlocations.Theregionisalsohometosomeofthemostimportanttourismmarketsofthefuture.Indiaisonesuchmarket,with850milliondomestictripsmadeannually,andrapidlyincreasinginboundandoutboundnumbers.In2012,weopenedthefirstHolidayInnExpressinIndia,tomeettheuntappeddemandforatrustedglobalbrandthatcaterstothemid-marketsegment.WealsolaunchedHolidayInnExpressinSoutheastAsiatopositiveownerandindustryfeedback.Wenowhave35HolidayInnExpresshotelsunderdevelopment,whichrepresentsaquarteroftheregion’scurrentpipeline.

Winning in resorts Thisyearweopenedseveralbrand-definingresorts,includingInterContinentalDanangSunPeninsulaResortinVietnam,InterContinentalSamuiBaanTalingNgamResortinThailandandtheCrownePlazaJordanDeadSeaResort&SpainJordan.

Someofthesenewresortshavealreadyreceivedgreatindustryandguestrecognition–astrongindicationofthe‘haloeffect’aresortcanbringtoabrand.Giventhereisnoclearleaderinthissought-afterbutfragmentedsegment,wehaveanincredibleopportunity,particularlyforInterContinentalHotels&ResortsandHolidayInn.In2012,weestablishedadedicatedteaminBangkoktodevelopIHG’sresortsstrategy.Ourgoalistobecometheregion’spreferredresortsoperator.GlobalmanagementoftheInterContinentalHotels&ResortsbrandhasalsomovedtoBangkok.WithmorethanathirdoftheInterContinentalHotels&ResortspipelineinAMEA,itgivesourownersconfidencetoseethebrandleadershipbasedintheregion.

Winning in food and beverageAround$1.5billion,35percent,ofAMEA’sgrossrevenuein2012wasfromourfoodandbeverageoperations,representingthelargestamountofanyregionwithinIHG.Withmorethan700restaurantsandbarsinAMEA,foodandbeverageisasizeablebusinessthatcandefineanddrivepreferenceforourBrandsevenfurther.FoodandbeverageisanotherstrandofIHG’sglobalstrategybeingdevelopedinAMEAalongwithglobalresorts.ThiswillestablishtheneedsforeachIHGbrandgloballyanddevelopspecificcareerpathsforourPeople.

“AMEA has some of the world’s most compelling travel destinations, robust business hubs and an incredible energy that comes from our geographical and cultural diversity. We have a great opportunity for AMEA to lead IHG in resorts and food and beverage excellence.”

Jan Smits Chief Executive Officer, Asia, Middle East and Africa

Asia, Middle East and Africa (AMEA)

We are growing our Brands and our People in an exciting region. Strong economies, growing incomes and the rapid rise of the middle class are some of the long-term factors underpinning the success of AMEA.

InterContinentalSamuiBaanTalingNgamResort,Thailand








Franchised2,184

Managed58,914

Owned&leased503




Totalhotelsopen187

Hotelsinpipeline160

Strong RevPAR growth

Overallin2012RevPARincreasedby5.4percentincludingrategrowthof3.1percent.Whilesomeexplainableslowdownwasseenthisyear,we’restilloutperformingthemarketintheregionwithmorethan180hotelsacross60cities.

Launch of HuALuxE™ Hotels & Resorts

InMarch2012,welaunchedHUALUXEHotels&Resorts–thefirstinternationalupscalehotelbranddesignedspecificallyforChineseguests.

NootherinternationalhotelgrouphasanofferlikeHUALUXEHotels&Resorts,andevensuccessfullocalbrandsarenotabletoprovidethescaleorsupportofIHG.Wesigned15contractsforthebrandin2012.

Thisuniquebrandcouldbeinmorethan100Chinesecitiesoverthenext15-20years.

Continued growth

CrownePlazaisoneofthefastestgrowingIHGbrandsinGreaterChina.Itisalsotheregion’slargestupscaleinternationalhotelbrand.WeopenedeightnewCrownePlazahotelsthisyear,andnowhave60,with52hotelsinthepipeline,whichismorethanhalfofthebrand'sentireglobalpipeline.

WealsoopenedoursecondandthirdHotelIndigoproperties–inthecoastalcityofXiamenandinTianjin,thecommercialhubofNorthChina.

Bytheendof2012,wehadmorethan110,000roomsopenorinthepipeline–anincreaseof7.2percentoverthepreviousyear.

Investing in People

Wecurrentlyhavemorethan50,000employeesacrossourestate,almostallofthemChinese,andwillbecreatingaround30,000newjobsoverthenextfewyears.ThiswillrequiresignificantinvestmentindevelopingourPeople,asthesinglebiggestoperationalchallengeinChinaisobtainingthebesttalent.

Butwith25IHGAcademyprogrammesinGreaterChina,ourcollaborationwithlocaleducationprovidersand/orcommunityorganisationswillgiveparticipantstheopportunitytodevelopskillsandimprovetheiremploymentprospects,creatingapipelineofpotentialrecruitsandfuturetalentforIHGandtheindustry.

“It has been a great year for IHG in China. We are the largest international hotel operator in Greater China with more rooms under development than any competitor. Our RevPAR continues to outperform the market due to the strength of our systems and preference for our Brands.”

Keith Barr Chief Executive, Greater China

Greater China

Greater China has been a standalone business within IHG for the past three years. In that time we have successfully focused on strengthening our Brands, driving strong operating results and implementing a robust People strategy.

CrownePlazaHongKongKowloonEast

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Asia, Middle East and Africa and Greater China 41

Group resultsRevenueincreasedby3.8%to$1,835mandoperatingprofitbeforeexceptionalitemsincreasedby9.8%to$614mduringthe12monthsended31December2012.Feerevenue,beingGrouprevenueexcludingrevenuefromownedandleasedhotels,significantliquidateddamagesreceivedin2012and2011andpropertiesthatarestructuredforlegalreasonsasoperatingleases,butwiththesamecharacteristicsasmanagementcontracts,increasedby6.8%whentranslatedatconstantcurrencyandapplying2011exchangerates.The2012resultsreflectcontinuedRevPARgrowthineachoftheregions,withanoverallRevPARincreaseof5.2%,includinga3.2%increaseinaveragedailyrate.TheresultsalsobenefitedfromSystemsizegrowthof2.7%year-on-yearto675,982rooms.GroupRevPARgrowthremainedrobustfortheyear,reflectingfavourablesupplyanddemanddynamicsintheUSover2012,althoughtradingwasalsoaffectedbytheimpactofEurozoneuncertaintyaswellasindustry-widechallengesinGreaterChinainthelatterpartoftheyearrelatedtothepoliticalleadershipchange.Atconstantcurrency,centraloverheadsincreasedfrom$147mto$158min2012($156matactualcurrency),reflectinginvestmentininfrastructureandcapabilitiestosupportthegrowthofthebusiness.During2012,theIHGglobalSystemincreasedby122hotels(17,634rooms).Openingsof226hotels(33,922rooms)weredrivenbycontinuedexpansionintheUS,particularlywithintheHolidayInnbrandfamilywhichopenedmorethan11,000roomsduring2012,andGreaterChina.Thelevelofhotelremovalsfellfrom198hotels(33,078rooms)in2011to104hotels(16,288rooms)in2012,asanticipatedfollowingthecompletionoftheHolidayInnrelaunch.

Attheendof2012,thepipelinetotalled1,053hotels(169,030rooms).ThecontinuedglobaldemandforIHGbrandsisdemonstratedbyover50%ofpipelineroomsbeingoutsideofTheAmericasregion,including30%inGreaterChina.Excluding25hotels(4,796rooms)signedaspartoftheUSgovernment’sPrivatizationofArmyLodgingsinitiativein2011,signingsincreasedfrom331hotels(50,628rooms)to356hotels(53,812rooms).Signingsduring2012included15hotelsfortheHUALUXEHotels&Resortsbrand,aswellasthefirstsigningfortheEVENHotelsbrand.During2012,theopeningof33,922roomscontributedtoanetpipelinedeclineof11,454rooms.Activemanagementoutofthepipelineofdealsthathavebecomedormantornolongerviablereducedthepipelineby31,344rooms,representingadecreaseof11.8%over2011.

Americas resultsRevenueandoperatingprofitbeforeexceptionalitemsincreasedby$7m(0.8%)to$837mandby$35m(7.8%)to$486mrespectively.RevPARincreasedby6.1%,with4.1%growthinaveragedailyrate.USRevPARwasup6.3%in2012despiteuncertaintyregardingthepresidentialelectionandthe‘fiscalcliff’inthelatterpartoftheyear.Franchisedrevenueincreasedby$39m(7.8%)to$541m.Royaltiesgrowthof8.7%wasdrivenbyRevPARgrowthof6.0%,including6.1%forHolidayInnExpress,togetherwithSystemsizegrowthof2.3%.Operatingprofitincreasedby$35m(8.1%)to$466m.Managedrevenuedecreasedby$27m(21.8%)to$97mandoperatingprofitdecreasedby$4m(7.7%)to$48m.Revenueandoperatingprofitincluded$34m(2011$59m)and$nil(2011$1m)respectivelyfrommanagedleases.Excludingpropertiesoperatedunderthis

arrangement,aswellasthebenefitofa$3mliquidateddamagesreceiptin2012anda$10mliquidateddamagesreceiptin2011,revenueandoperatingprofitgrewby$5m(9.1%)and$4m(9.8%)respectively.GrowthwasdrivenbyaRevPARincreaseof7.3%,including9.6%forHolidayInn.Ownedandleasedrevenuedeclinedby$5m(2.5%)to$199mandoperatingprofitgrewby$7m(41.2%)to$24m.Excludingtheimpactofdisposals,revenueincreasedby$4m(2.1%)andoperatingprofitincreasedby$8m(50.0%).TheincreaseinrevenuewasdrivenbyRevPARgrowthof6.3%,offsetbytheimpactofthepartialclosureofanownedhotelintheCaribbean.Theoperatingprofitincreaseof$7mincludeda$1myear-on-yearbenefitfromlowerdepreciationrecordedfortheInterContinentalNewYorkBarclaysincethehotelwascategorisedasheldforsaleinthefirstquarterof2011,afterwhichnodepreciationwascharged,anda$3myear-on-yearbenefitrelatingtoone-offreorganisationcostsatonehotelin2011.

Europe resultsRevenueandoperatingprofitbeforeexceptionalitemsincreasedby$31m(7.7%)to$436mandby$11m(10.6%)to$115mrespectively.RevPARincreasedby1.7%,with1.2%growthinaveragedailyratedespitechallengingeconomicconditionsacrossEurope.Franchisedrevenueincreasedby$5m(5.8%)to$91m,whilstoperatingprofitwasflatat$65m.Atconstantcurrency,revenueincreasedby$8m(9.3%)andoperatingprofitincreasedby$3m(4.6%).Growthwasmainlydrivenbyanincreaseinroyaltiesof2.7%(7.5%atconstantcurrency)reflectingRevPARgrowthof1.8%,togetherwithSystemsizegrowthof4.0%.Managedrevenueincreasedby$29mto$147m(24.6%)andoperatingprofitincreasedby$6m(23.1%)to$32m.

Summary Financial Statement

2012 was another year of significant progress with our preferred Brands driving RevPAR growth of 5.2% which, together with a 2.7% increase in hotel room count, fuelled by our continued expansion in developing markets, drove fees up an impressive 6.8%. As a result, we delivered 10% growth in operating profit before exceptional items and achieved a two percentage point increase in operating margin over last year.


Revenueandoperatingprofitincluded$80m(2011$46m)and$2m(2011$nil)respectivelyfrommanagedleases.Excludingpropertiesoperatedunderthisarrangementandonaconstantcurrencybasis,revenuedecreasedby$1m(1.4%)reflectinga4.3%decreaseinSystemsizepartiallyoffsetbyRevPARgrowthof1.0%.Onthesamebasis,operatingprofitgrewby$5m(19.2%).Intheownedandleasedestate,revenuedecreasedby$3m(1.5%)to$198mandoperatingprofitincreasedby$1m(2.0%)to$50m.Atconstantcurrencyandexcludingtheimpactofdisposals,revenueincreasedby$10m(5.1%)andoperatingprofitincreasedby$4m(8.3%).TheInterContinentalLondonParkLaneandtheInterContinentalParisLeGranddeliveredyear-on-yearRevPARgrowthof8.0%and2.5%respectively.

AMEA resultsRevenueandoperatingprofitbeforeexceptionalitemsincreasedby$2m(0.9%)to$218mandby$4m(4.8%)to$88mrespectively.RevPARincreased4.9%,with1.2%growthinaveragedailyrate,withrobusttradinginSoutheastAsiaandJapan,partlyoffsetbycontinuinguncertaintyimpactingsomemarketsintheMiddleEast.Onbothaconstantandactualcurrencybasis,franchisedrevenuedecreasedby$1m(5.3%)to$18mandoperatingprofitwasflatat$12m.Managedrevenueandoperatingprofitincreasedby$1m(0.7%)to$152mandby$3m(3.4%)to$90mrespectively.Atconstantcurrency,excludingthebenefitofa$6mliquidateddamagesreceiptin2011andafteradjustingforthedisposalofahotelassetandpartnershipinterestinAustralia,whichcontributed$3mtooperatingprofitin2011,revenueandoperatingprofitincreasedby$7m(4.8%)and$11m(14.1%)respectively.RevPARgrowthwas4.6%andalthoughyear-endSystemsizewas7.1%higherthanattheendof2011,duetothephasingofopeningstowardstheendoftheyear,roomsavailableduringtheyeargrewbyonly2.2%.Operatingprofitin2012benefitedfroma$1mincreaseinprofitfromanassociateand$2mloweryear-on-yearbaddebtexpense.Intheownedandleasedestate,revenueandoperatingprofitincreasedby$2m(4.3%)to$48mandby$1m(20.0%)to$6mrespectively.

Greater China resultsRevenueandoperatingprofitbeforeexceptionalitemsincreasedby$25m(12.2%)to$230mandby$14m(20.9%)to$81mrespectively.RevPARincreased5.4%with3.1%growthinaveragedailyrate.

Franchisedrevenueincreasedby$1m(50.0%)to$3mandoperatingprofitby$1m(33.3%)to$4m,boostedbytheopeningofthe1,224-roomHolidayInnMacaoCotaiCentral.Managedrevenueincreasedby$12m(15.6%)to$89mandoperatingprofitincreasedby$8m(18.6%)to$51m.RevPARgrowthof5.6%reflectedcontinuedeconomicgrowthintheregion,althoughthewholeindustrywasaffectedinthelatterpartoftheyearbytheonceinadecadepoliticalleadershipchangeandtheDiaoyu/Senkakuislandsterritorialdispute.TherewasalsocontinuedsignificantSystemsizegrowthforthemanagedestateintheregion(9.7%roomsgrowthin2012following14.2%roomsgrowthin2011).Ownedandleasedrevenueincreasedby$12m(9.5%)to$138mandoperatingprofitincreasedby$8m(21.6%)to$45m,withRevPARgrowthof6.7%attheInterContinentalHongKong.

Central resultsNetcentralcostsincreasedby$9m(6.1%)from$147min2011to$156min2012.Atconstantcurrency,netcentralcostsincreasedby$11m(7.5%).Themovementwasdrivenbyinvestmentininfrastructureandcapabilitiestosupportthegrowthofthebusiness.Centralrevenuemainlycomprisedtechnologyfeeincome.

Other financial itemsExceptionaloperatingitemstotalledanetlossof$4m.Exceptionalgainsincludeda$23mimpairmentreversalandthereleaseofa$9mliabilitynolongerrequired.Exceptionalchargesincluded$16mreorganisationcosts,$2mlossondisposalofaninterestinahoteland$18mwrite-offofsoftware.Netfinancialexpensesdecreasedby$8mto$54mprimarilyduetoloweraveragedebtlevels.Theeffectiverateoftaxonoperatingprofit,excludingtheimpactofexceptionalitems,was27%(201124%).Basicearningsperordinarysharein2012was189.5¢,comparedwith159.2¢in2011.Adjustedearningsperordinarysharewas141.5¢,against130.4¢in2011.TheBoardhasproposedafinaldividendperordinaryshareof43.0¢(27.7p).Withtheinterimdividendperordinaryshareof21.0¢(13.5p),thefull-yeardividendperordinarysharefor2012willtotal64.0¢(41.2p),anincreaseof16%over2011.On22October2012,aspecialdividendperordinaryshareof$1.72(108.4p)waspaidtoshareholders.

This Summary Financial Statement was approved by the Board on 18 February 2013 and signed on its behalf by Tom Singer. It does not contain sufficient information to provide as complete an understanding of the Group’s results and state of affairs as that provided in the Annual Report and Financial Statements 2012. That report may be obtained, free of charge, by writing to IHG or the Company’s Registrar, Equiniti (contact details are provided on page 59).

The auditors have issued an unqualified report on the Financial Statements containing no statement under section 498(2) or 498(3) of the Companies Act 2006. Information concerning Directors’ emoluments is shown on pages 50 to 57.

“We continued to win share by adding rooms to meet growing demand and driving up RevPAR. We have delivered good fee growth of 6.8% for the Group, driven by 2.7% net rooms growth and RevPAR outperformance in our two largest markets, the US and China.”

Tom Singer Chief Financial Officer

Capital structure and liquidity managementDuringtheyear,$472mofcashwasgeneratedfromoperatingactivities,ofwhich$133mwasinvestedincapitalexpenditure.Aftershareholderreturnsof$786m,includinga$505mspecialdividendand$107mofsharebuybacks,netdebtat31December2012was$1,074m,anincreaseovertheyearof$536m.

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Summary Financial Statement 43

Summary Financial Statement continued

SummarisedGroupincomestatement

2012 2011

Before Before exceptional Exceptional exceptional Exceptional items items Total items items TotalFortheyearended31December2012 $m $m $m $m $m $m

RevenueAmericas 837 – 837 830 – 830Europe 436 – 436 405 – 405AMEA 218 – 218 216 – 216GreaterChina 230 – 230 205 – 205Central 114 – 114 112 – 112Totalrevenue 1,835 – 1,835 1,768 – 1,768

OperatingprofitAmericas 486 23 509 451 13 464Europe 115 (4) 111 104 (39) 65AMEA 88 (5) 83 84 26 110GreaterChina 81 – 81 67 – 67Central (156) (18) (174) (147) 35 (112)Operatingprofit 614 (4) 610 559 35 594Netfinancecosts (54) – (54) (62) – (62)Profitbeforetax 560 (4) 556 497 35 532Tax (153) 142 (11) (120) 48 (72)Profitfortheyearfromcontinuingoperations 407 138 545 377 83 460

Earningsperordinaryshare(cents)Basic–continuingandtotaloperations 189.5 159.2Adjusted–continuingandtotaloperations 141.5 130.4 Dividendpershare(cents)Final–paidinrespectofprioryear 39.0 35.2Interim–paid 21.0 16.0Special–paid 172.0 –Final–proposed 43.0 39.0

WehaveexaminedtheSummaryFinancialStatementfortheyearended31December2012whichcomprisesthesummarisedGroupincomestatement,summarisedGroupstatementofcashflowsandsummarisedGroupstatementoffinancialposition.ThisstatementismadesolelytotheCompany’smembers,asabody,inaccordancewithsection428(4)oftheCompaniesAct2006.OurauditworkhasbeenundertakensothatwemightstatetotheCompany’smembersthosematterswearerequiredtostatetotheminanauditor’sstatementandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCompanyandtheCompany’smembersasabody,forourauditwork,forthisstatement,orfortheopinionswehaveformed.

RespectiveresponsibilitiesofDirectorsandtheauditorTheDirectorsareresponsibleforpreparingtheAnnualReviewandSummaryFinancialStatementinaccordancewithapplicableUnitedKingdomlaw.OurresponsibilityistoreporttoyououropinionontheconsistencyoftheSummaryFinancialStatementwithintheAnnualReviewandSummaryFinancialStatementwiththefullannualFinancialStatements,theDirectors’RemunerationReportandtheDirectors’Report,anditscompliancewiththerelevantrequirementsofsection428oftheCompaniesAct2006andtheregulationsmadethereunder.WealsoreadtheotherinformationcontainedintheAnnualReviewandSummaryFinancialStatementandconsidertheimplicationsforourreportifwebecomeawareofanyapparentmisstatementsormaterialinconsistencieswith

theSummaryFinancialStatement.TheotherinformationcomprisesonlytheHeadlines,Chairman’sStatement,ChiefExecutive’sReview,BusinessReviews,SummaryDirectors’Report,CorporateGovernanceStatement,SummaryAuditCommitteeReportandSummaryDirectors’RemunerationReport.WeconductedourworkinaccordancewithBulletin2008/3issuedbytheAuditingPracticesBoard.OurreportontheCompany’sfullannualFinancialStatementsdescribesthebasisofouropiniononthoseFinancialStatements,theDirectors’RemunerationReportandtheDirectors’Report.

OpinionInouropiniontheSummaryFinancialStatementisconsistentwiththefullannualFinancialStatements,theDirectors’ReportandtheDirectors’RemunerationReportofInterContinentalHotelsGroupPLCfortheyearended31December2012andcomplieswiththeapplicablerequirementsofsection428oftheCompaniesAct2006,andtheregulationsmadethereunder.

Ernst&YoungLLPStatutoryAuditor,London18February2013.

Directors’statementTheauditorhasissuedunqualifiedreportsonthefullannualFinancialStatements,theauditablepartoftheDirectors’RemunerationReportandontheconsistencyoftheDirectors’ReportwiththoseannualFinancialStatements.TheirreportonthefullannualFinancialStatementsandtheauditablepartoftheDirectors’RemunerationReportcontainednostatementundersections498(2)or498(3)oftheCompaniesAct2006.

Independent Auditor’s Statement to the members of InterContinental Hotels Group PLC


SummarisedGroupstatementofcashflows

2012 2011Fortheyearended31December2012 $m $m

Cashflowfromoperations 639 623Netinterestpaid (48) (55)Taxpaidonoperatingactivities (119) (89)Netcashfromoperatingactivities 472 479Capitalexpenditure (133) (194)Proceedsfromdisposalofoperationsandotherfinancialassets 8 157Taxpaidondisposals (3) (1)Purchaseofownshares (107) –Dividendspaidtoshareholders (679) (148)Issueoflong-termbonds 632 –Decreaseinotherborrowings (99) (119)Otherfinancingmovements (76) (67)Netmovementincashandcashequivalentsintheyear 15 107Cashandcashequivalentsatbeginningoftheyear 182 78Exchangerateeffects (2) (3)Cashandcashequivalentsatendoftheyear 195 182

SummarisedGroupstatementoffinancialposition

2012 201131December2012 $m $m

ASSETS Property,plantandequipment 1,056 1,362Goodwillandintangibleassets 447 400Investmentinassociatesandjointventures 84 87Retirementbenefitassets 99 21Otherfinancialassets 155 156Non-currenttaxassets 228 147Totalnon-currentassets 2,069 2,173Inventories 4 4Tradeandotherreceivables 422 369Currenttaxreceivable 31 20Derivativefinancialinstruments 2 3Otherfinancialassets 6 –Cashandcashequivalents 195 182Totalcurrentassets 660 578Non-currentassetsclassifiedasheldforsale 534 217Totalassets 3,263 2,968

LIABILITIES Loansandotherborrowings (16) (21)Tradeandotherpayables (709) (707)Provisions (1) (12)Currenttaxpayable (54) (120)Totalcurrentliabilities (780) (860)Loansandotherborrowings (1,242) (670)Derivativefinancialinstruments (19) (39)Retirementbenefitobligations (187) (188)Tradeandotherpayables (563) (497)Provisions (1) (2)Deferredtaxliabilities (93) (97)Totalnon-currentliabilities (2,105) (1,493)Liabilitiesclassifiedasheldforsale (61) (60)Totalliabilities (2,946) (2,413)Netassets 317 555

IHGshareholders’equity 308 547Non-controllinginterest 9 8Totalequity 317 555

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Summary Financial Statement 45

Board of DirectorsPatrickCescauNon-ExecutiveChairmanChairmanoftheNominationCommitteeAppointedNon-ExecutiveChairmaninJanuary2013.AlsoNon-ExecutiveDirectorofInternationalConsolidatedAirlinesGroup,S.A.andtheSeniorIndependentDirectorandNon-ExecutiveDirectorofTescoPLC.TrusteeoftheLeverhulmeTrustandChairmanoftheStJudeIndiaChildren’sCharity.FormerlyaSeniorIndependentDirectorandNon-ExecutiveDirectorofPearsonPLCandaDirectoratINSEAD.

RichardSolomonsChiefExecutiveAppointedChiefExecutiveinJuly2011.JoinedtheGroupin1992andheldanumberofseniorfinancialandoperationalroleswithhispreviousroleasChiefFinancialOfficerandHeadofCommercialDevelopmentandformerlyasChiefOperatingOfficerofTheAmericasHotelsdivision.ServesontheExecutiveCommitteeoftheWorldTravel&TourismCouncil.

TomSingerChiefFinancialOfficerAppointedChiefFinancialOfficerinSeptember2011.JoinedtheGroupfromBupa,wherehewasGroupFinanceDirectorandamainboardmember.PreviouslyGroupFinanceDirectorandChiefOperatingOfficeratWilliamHillPLCandFinanceDirectoratMossBrosGroupPLC.

KirkKinsellPresident,TheAmericasAppointedaDirectorinAugust2010.JoinedtheGroupin2002.AppointedanExecutiveCommitteememberin2007andwasPresident,Europe,MiddleEastandAfricauntilJune2011.ResponsibleforthebusinessdevelopmentandperformanceofallthehotelbrandsandpropertiesinTheAmericasregion.

TracyRobbinsExecutiveVicePresident,HumanResourcesandGroupOperationsSupportAppointedaDirectorinAugust2011.JoinedtheGroupinDecember2005fromCompassGroupPLC.Responsibleforglobaltalentmanagement,leadershipdevelopment,employeerewardstrategyandimplementation,organisationalcapabilityandoperationssupport.

DavidKapplerSeniorIndependentNon-ExecutiveDirectorChairmanoftheAuditCommittee AppointedaDirectorandSeniorIndependentDirectorinJune2004.HeisalsoaNon-ExecutiveDirectorofShireplc.FormerlyChiefFinancialOfficerofCadburySchweppesplcandNon-ExecutiveChairmanofPremierFoodsplc.AmemberoftheEuropeAdvisoryCouncilofTrilanticCapitalPartnersandChairmanofADS2BrandsLimited.

JenniferLaingIndependentNon-ExecutiveDirectorChairmanoftheCorporateResponsibilityCommittee AppointedaDirectorinAugust2005.Hasover30years’experienceinmarketingandadvertisingandwas,until2007,AssociateDean,ExternalRelationsatLondonBusinessSchool.AlsoservesasaNon-ExecutiveDirectorofHudsonGlobal,Inc.,andPremierFoodsplc.

JonathanLinenIndependentNon-ExecutiveDirector AppointedaDirectorinDecember2005.WasformerlyViceChairmanoftheAmericanExpressCompany.ServesasaNon-ExecutiveDirectorofYum!Brands,Inc.andofModernBank,N.A.,andonanumberofUScouncilsandadvisoryboards.

LukeMayhewIndependentNon-ExecutiveDirectorChairmanoftheRemunerationCommittee AppointedaDirectorinJuly2011.ANon-ExecutiveDirectorofBramblesLimited.PreviouslyservedontheBoardofJohnLewisPartnershipandasManagingDirectoroftheDepartmentStoreDivision.WasaNon-ExecutiveDirectorofWHSmithPLCandChairmanofPetsatHomeGroupLimited.

DaleMorrisonIndependentNon-ExecutiveDirector AppointedaDirectorinJune2011.AfoundingpartnerofTriPointeCapitalPartners.WaspreviouslyPresidentandChiefExecutiveOfficerofMcCainFoodsLimited.CurrentlyaNon-ExecutiveDirectorofInternationalFlavors&FragrancesInc.,andChairmanofFindusGroupLimited.

YingYehIndependentNon-ExecutiveDirector AppointedaDirectorinDecember2007.WaspreviouslyVicePresidentandChairman,GreaterChinaRegion,NalcoCompanyandChairmanandPresident,NorthAsiaRegion,President,BusinessDevelopment,AsiaPacificRegionandVicePresident,EastmanKodakCompany.AlsoaNon-ExecutiveDirectorofABVolvo,ABBLtdandSamsoniteInternationalS.A.

AuditCommitteememberCorporateResponsibilityCommitteememberNominationCommitteememberRemunerationCommitteemember

The Board of Directors and Executive Committee

Lefttoright:LarryLight,DaleMorrison,JenniferLaing,RichardSolomons,YingYeh,PatrickCescau,JonathanLinen,LukeMayhew,EricPearson,


KeithBarrChiefExecutive,GreaterChinaJoinedtheGroupin2000.BecameChiefExecutive,GreaterChinainApril2011.ResponsibleforthebusinessdevelopmentandperformanceofallthehotelbrandsandpropertiesintheGreaterChinaregion.

AngelaBravChiefExecutive,EuropeJoinedtheGroupin1988.AppointedChiefExecutive,EuropeinAugust2011.ResponsibleforthebusinessdevelopmentandperformanceofallthehotelbrandsandpropertiesinEurope.

LarryLightChiefBrandsOfficerJoinedtheGroupin2012.FormerlyChiefMarketingOfficerforMcDonald’s.ResponsibleforbuildingontheGroup’sstrategyofdevelopingandnurturingapowerfulportfolioofpreferredBrands.

EricPearsonExecutiveVicePresidentandChiefInformationOfficerJoinedtheGroupin1997.AppointedExecutiveVicePresidentandChiefInformationOfficerin2012.Responsibleforglobaltechnology,includingITsystemsandinformationmanagement,throughouttheGroup.

JanSmitsChiefExecutive,Asia,MiddleEastandAfricaJoinedtheGroupin2002.BecameChiefExecutive,Asia,MiddleEastandAfricainAugust2011.ResponsibleforthebusinessdevelopmentandperformanceofallthehotelbrandsandpropertiesinAsia,MiddleEastandAfrica.

GeorgeTurnerExecutiveVicePresident,GeneralCounselandCompanySecretaryJoinedtheGroupin2008fromImperialChemicalIndustriesPLC.AppointedExecutiveVicePresident,GeneralCounselandCompanySecretaryinJanuary2009.Responsibleforcorporategovernance,riskmanagement,insurance,regulatory,internalaudit,legal,corporateresponsibilityandpublicaffairs.

StevenSickelInterimGlobalHeadofSalesandDistribution*JoinedtheGroupin2000.SinceAugust2011,Stevenhasinterimresponsibilityforrevenuemanagement,revenuesystemsandworldwidesales,inadditiontohisexistingresponsibilitiesasSeniorVicePresident,DistributionRelationshipMarketing.Previously,hewasManagingDirector,LoyaltyMarketingatContinentalAirlinesfor8years.

Executive CommitteeInadditiontotheExecutiveDirectorsontheBoard,theExecutiveCommitteecomprises:

The Board of Directors and Executive Committee

GeorgeTurner,KeithBarr,TracyRobbins,StevenSickel,KirkKinsell,AngelaBrav,JanSmits,TomSingerandDavidKappler.

InApril2013KennethMacPhersonwilljointheGroupasChiefExecutive,GreaterChinahavingpreviouslybeenGeneralManagerandBoardDirectorofSichuanShuijingfangCompanyLtd,aDiageojointventureinChina.Witheffectfrom1June2013KeithBarrwillbeappointedtothenewlycreatedpositionofChiefCommercialOfficer,responsibleforbrands,sales,marketinganddistribution,andwillremainamemberoftheExecutiveCommittee.DuringthetransitionLarryLightwillcontinueinhisroleasChiefBrandsOfficerandasamemberoftheExecutiveCommittee.FollowingthetransitionLarrywillstayonasaseniorIHGadvisor.

*StevenSickel,whohasbeenaninterimmemberoftheExecutiveCommittee,willreturntohisfull-timeroleleadingDistributionRelationshipMarketinginJune2013.

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The Board of Directors and Executive Committee 47

PrincipalactivitiesInterContinentalHotelsGroupPLC(theCompany)istheholdingcompanyoftheInterContinentalHotelsGroup(theGroup).TheGroupfranchises,manages,ownsandleasesover4,600hotels,withnearly676,000guestroomsinnearly100countriesandterritoriesaroundtheworld.AreviewoftheperformanceoftheGroupiscontainedintheChairman’sStatementandtheChiefExecutive’sReviewonpages4to7,theBusinessReviewspresentedonpages8to41andintheSummaryFinancialStatementsonpages42to45.

AnnualGeneralMeeting(AGM)TheNoticeconveningtheAGMtobeheldat11.00amonFriday,24May2013iscontainedinacircularsenttoshareholdersatthesametimeasthisAnnualReview.

ResultsanddividendsTheoperatingprofitbeforeexceptionalitemswas$614m.Aninterimdividendof13.5pencepershare(21.0centsperADR)waspaidon28September2012.Aspecialdividendof108.4pencepershare($1.72perADR)waspaidon22October2012.TheDirectorsarerecommendingafinaldividendof27.7pencepershare(43.0centsperADR)tobepaidon31May2013toshareholdersontheRegisterofMembersatthecloseofbusinesson22March2013.

SharecapitalTheCompany’sissuedsharecapitalat31December2012consistedof268,325,071ordinarysharesof14194 ⁄329penceeach.Therearenospecialcontrolrightsorrestrictionsonsharetransferattachingtotheseordinaryshares.Duringtheyear,noawardsorgrantsoversharesweremadethatwouldbedilutiveoftheCompany’sordinarysharecapital.

ShareissuesandbuybacksOn7August2012,theCompanyannounceda$1bnreturnoffundstoshareholdersviaaspecialdividendof$0.5bnandshareconsolidationona14for15basisandasharebuybackprogrammeof$0.5bn.ThesharebuybackauthorityremainsinforceuntiltheAGMin2013,andaresolutiontorenewtheauthoritywillbeputtoshareholdersatthatAGM.

SubstantialshareholdingsAsat31December2012and18February2013,theCompanyhadbeennotifiedofthefollowingsignificantholdingsinitsordinaryshares:

AsatShareholder 18February2013

CedarRockCapitalLimited 5.07%BlackRock,Inc. 5.02%Legal&GeneralGroupplc 3.96%

BoardofDirectorsBiographicaldetailsofcurrentBoardmembersareshownonpages46and47.ExecutiveDirectorshaveservicecontractsandNon-ExecutiveDirectorshavelettersofappointment.

TheBoardmayexerciseallthepowersoftheCompany.TheGroupmaintainsinsurancecoverforandhasprovidedindemnitiestoallofitsDirectorsandofficers,aspermittedbytheCompaniesAct2006.

DetailsofthebeneficialinterestsinsharesoftheCompany,heldbyDirectorswhowereontheBoardattheyearendareshownbelow:

Asat Asat 31December2012 31December2011 ordinaryshares1 ordinaryshares1

ExecutiveDirectors KirkKinsell 155,6282 109,547TracyRobbins 85,703 43,108TomSinger 20,846 –RichardSolomons 322,379 252,166Non-ExecutiveDirectors PatrickCescau3 – –DavidKappler 1,308 1,400JenniferLaing 3,148 3,373JonathanLinen 6,8534 7,343LukeMayhew 1,866 2,000DaleMorrison 4,2334 –DavidWebster3 33,438 35,828YingYeh – –

1 TheseshareholdingsincludeallbeneficialinterestsandthoseheldbyDirectors’spousesandotherconnectedpersons.NoneoftheDirectorshaveabeneficialinterestinthesharesofanysubsidiary.TheseshareholdingsdonotincludeExecutiveDirectors’entitlementstoshareawardsundertheCompany’sshareplans,whicharesetoutseparatelyintheSummaryDirectors’RemunerationReportonpages50to57.

2 155,034ordinarysharesand594AmericanDepositaryReceipts.

3 PatrickCescauwasappointedasaNon-ExecutiveChairmanon1January2013followingtheretirementofDavidWebsteron31December2012.

4 HeldintheformofAmericanDepositaryReceipts.

EmployeesIHGdirectlyemployedanaverageof7,981peopleworldwideduring2012,whosecostsarebornebytheGroup.WhenthewholeIHGestateistakenintoaccount(includingstaffworkinginthefranchisedandmanagedhotels)morethan350,000peopleworkedgloballyacrossallIHG’sbrandsat31December2012.

TheGroupiscommittedtoprovidingemployeeswithequalityofopportunity,withoutdiscrimination.Greatemphasisisplacedonemployeecommunications,particularlyonmattersrelatingtotheGroup’sbusinessanditsperformance.

CharitableandpoliticaldonationsIn2012,theGroupdonated$1,015,000insupportofcommunityinitiativesandcharitablecauses.ThisfigureincludescontributionsfromIHGemployeesandguests.Nopaymentsweremadeforpoliticalpurposes.

AuditorsTheDirectorsconfirmthattheyhavetakenstepstomakethemselvesawareofrelevantauditinformation.NoneoftheDirectorsareawareofanyrelevantauditinformationwhichhasnotbeendisclosedtotheauditors.

ThereappointmentofErnst&YoungLLPasauditorsoftheCompanywillbeputtoshareholdersattheAGM.

GoingconcernAttheendof2012,theGroupwastradingwithinitsbankingcovenantsanddebtfacilities.IHG’sfeebasedmodelandwidegeographicspreadmeansthatitiswellplacedtomanagethroughuncertaintimes.

TheFinancialStatementsfortheyearended31December2012havethereforebeenpreparedonthegoingconcernbasis.


Summary Directors’ Report

TheBoardiscommittedtocompliancewithalltheprinciplesandprovisionssetoutintheUKCorporateGovernanceCode(Code)andconsidersthattheCompanyhascompliedwithitsrequirementsthroughouttheyearended31December2012.

TheBoardofDirectorsTheBoardisresponsibletotheshareholdersforthestrategicdirection,development,performanceandcontroloftheGroup.ItalsoensuresthatthenecessaryfinancialandhumanresourcesareinplacefortheGrouptomeetitsobjectives.During2012eightBoardmeetingswereheld.

DavidWebsterwasNon-ExecutiveChairmanthroughouttheyear.InMay2012DavidWebsternotifiedtheBoardofhisintentiontoretireandstepdownasNon-ExecutiveChairmanwitheffectfrom31December2012.InJune2012GrahamAllanretiredfromtheBoard,AuditCommittee,NominationCommitteeandCorporateResponsibilityCommitteeandinNovember2012DaleMorrisonwasappointedtotheCorporateResponsibilityCommittee.TheprogressiverefreshingoftheBoardensuresthatwehaveappropriatecontinuationandamulti-skilledanddiverseBoard.

TheBoardiscomprisedoffourExecutiveDirectorsandateamofsevenexperiencedindependentNon-ExecutiveDirectorsrepresentastrongsourceofadviceandjudgement.TogethertheBoardhasabroadrangeofskills,knowledgeandexperienceandrepresentawidegeographicalspread.

ThescheduleofmatterswhicharereservedfortheBoardareavailableontheCompany’swebsiteatwww.ihgplc.com/investorsundercorporategovernance.

CommitteesTheBoardCommitteesinclude:AuditCommittee;CorporateResponsibilityCommittee;NominationCommittee;andRemunerationCommittee.TheAudit,NominationandRemunerationCommitteesconsistwhollyofNon-ExecutiveDirectors.TheChairmanoftheBoardisamemberoftheNominationCommitteeonly.ThetermsofreferenceoftheseCommitteeswerereviewedduring2012toensurethattheycontinuetoreflectbestpracticeandareavailableontheCompany’swebsiteatwww.ihgplc.com/investorsundercorporategovernance/committeesorfromtheCompanySecretary’sofficeonrequest.

InductionprogrammesarepreparedfornewDirectorsandongoingtraininganddevelopmentneedsforallDirectorsarekeptunderreview.

The2012BoardperformanceevaluationoftheBoardanditsCommitteeswasconductedbyanindependentexternalfacilitator,LintstockLimited.ItinvolvedthecompletionofcomprehensivequestionnairesinwhichDirectorsandtheCompanySecretarywereaskedtoevaluatetheBoard,eachofitsCommitteesandtheirrespectiveChairmenandtheChairmanoftheBoard.

ThefeedbackconfirmedthattheBoardandeachofitsCommitteescontinuetooperateeffectivelyandthateachDirectorcontinuestomakeaneffectivecontributionandretainsastrongcommitmenttotherole.

TheDirectorshaveagreedtoretireateachAnnualGeneralMeeting(AGM)andofferthemselvesforre-electionannuallyinlinewiththeCoderecommendations.

SeniorIndependentDirectorDavidKapplerwasSeniorIndependentDirectorthroughouttheyear.Hisroleincludesbeingavailabletoliaisewithshareholderswhohaveconcernsthattheyfeelhavenotbeenaddressedthroughthenormalchannels,beingasoundingboardfortheChairmanandleadingtheperformanceevaluationoftheChairman.

CompanySecretaryAllDirectorshaveaccesstotheadviceandservicesoftheCompanySecretary.HisresponsibilitiesincludeadvisingtheBoardoncorporategovernance,andforensuringgoodinformationflowstotheBoardanditsCommitteesandbetweentheExecutiveCommitteeandtheNon-ExecutiveDirectors.HealsofacilitatestheinductionofnewDirectorsandtheregularupdatingandrefreshingofallDirectors’skillsandknowledge.

InternalcontrolandriskmanagementTheBoardhasultimateresponsibilityfortheGroup’ssystemofinternalcontrolandriskmanagementandforreviewingitseffectiveness.Inordertodischargethatresponsibility,theBoardhasestablishedtheproceduresnecessarytoapplytheCode,includingclearoperatingprocedures,linesofresponsibilityanddelegatedauthorities.

Fortheyearended31December2012,theBoardhasconductedareviewoftheeffectivenessofthesystemofinternalcontrolandriskmanagement.Thesystemisdesignedtomanagetheriskoffailuretoachievebusinessobjectives,anditcanonlyprovidereasonableandnotabsoluteassurance.WhilstareasforcontinuousimprovementhavebeenidentifiedandactionsinitiatedasaresultoftheGroup’sprocesses,nosignificantshortcomingshavebeenidentifiedfromthe2012riskassessments.

ShareholderrelationsTheGroupreportsformallytoshareholderstwiceayearandreleasesquarterlyresults.Inaddition,regularmeetingsareheldwithmajorinstitutionalshareholderstodiscuss,usingpubliclyavailableinformation,progressofthebusiness,itsperformance,plansandobjectives.TheChairman,theSeniorIndependentDirectorandotherNon-ExecutiveDirectorsareavailabletomeetwithmajorshareholderstounderstandtheirissuesandconcernsandtodiscussgovernanceandstrategy.

TheAGMprovidesausefulforumforone-to-onecommunicationwithprivateshareholders,manyofwhomarealsoguestsinourhotels.InformationofinteresttoinvestorsisalsomaintainedontheCompany’swebsiteatwww.ihgplc.com/investors

SummaryAuditCommitteeReportTheAuditCommittee,whichischairedbyafinancialexpert,supportstheBoardinmeetingitsresponsibilitiesinrelationtotheintegrityoftheGroup’sfinancialstatementsandassociatedannouncements,theadequacyofinternalcontrolandriskmanagementsystemsandtheappointmentandworkoftheinternalandexternalauditors.TheexternalauditorsandtheHeadofGlobalInternalAuditbothhavetheopportunitytomeetprivatelywiththeCommittee.

Duringtheyear,theCommittee’sdeliberationsincludedawiderangeofmattersaddressingallitsmainareasofresponsibility.TheCommittee’smainfocuswastoreviewthequarterly,interimandfull-yearfinancialresultsandtoreviewtheeffectivenessofinternalcontrol,financialreportingandriskmanagementprocesses,throughreportsandpresentationsreceivedfromGlobalInternalAudit(GIA),theexternalauditorsandmanagement.ConsiderationwasalsogiventoGIA’sannualinternalauditplan,disclosurecontrols,developmentsincorporategovernanceandaccountingstandardsintheUKandUSandsignificantincidentsoffraudandwhistleblowing.

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Summary Directors’ Report and Corporate governance 49

Corporate governance

IntroductionThis year, 2013, is a year of transition for directors’ remuneration reports. We have prepared this report before new final Government regulations on executive remuneration disclosure are issued. However, we have reflected as much as is practical of the direction and spirit of the draft regulations in both the content and structure of the full 2012 Directors’ Remuneration Report from which this summary report is extracted.

We have historically tried to make the report transparent and easy to read and in recent years already included, for example, the single figure for Executive Directors’ remuneration and a remuneration policy summary table.

Executive Director remuneration at IHG has evolved during 2012:

• the measures under the Annual Bonus Plan (ABP) have been changed for Executive Directors in 2013. To distinguish it from the previous measures, we refer to it as the Annual Performance Plan (APP). Although not a radical change, the APP does align annual incentives more closely to the key elements of our strategic priorities of Brands, People and Delivery; and

• the 2010/12 Long Term Incentive Plan (LTIP), which will vest in 2013, is the last LTIP using the previous measures. The 2011/13 LTIP, which vests in 2014, is the first LTIP including the new corporate performance measures of net rooms growth and RevPAR.

Remuneration for Executive Directors in 2012 reflects another year of strong corporate results, as shown in the table below:

2012 2011 2010

EBIT +9.8% +25.9% +22.3%Adjusted EPS* +21.7% +2.5% +9.6%TSR* +28.2% +29.8% +8.0%

* Annualised three-year changes.

Remuneration has reflected these results with an ABP award just above target for 2012 and a maximum vesting of the 2010/12 LTIP cycle.

We continually keep all aspects of remuneration under review and listen to the views of shareholders, the Government and other

stakeholders. We believe our current approach to remuneration is responsible and appropriate as it:

• is structured to drive execution of our business strategy;

• aligns reward with the creation of shareholder value;

• allows the Company to recruit and retain talent in a competitive global sector;

• incorporates measures and safeguards to ensure that high rewards only follow strong, balanced results; and

• incentivises the delivery of long-term, sustainable business growth and shareholder value, rather than the pursuit of unsustainable short-term results.

The targets for 2013 are stretching and will require a strong corporate performance to achieve similar levels of remuneration.

Luke MayhewChairman of the Remuneration Committee 18 February 2013

Summary Directors’ Remuneration Report glossary of terms

ABP Annual Bonus Plan

APP Annual Performance Plan

DB Defined Benefit

DC Defined Contribution

DJGH index Dow Jones Global Hotels index

EBIT Earnings before interest and tax

EPS Earnings per share

ICETUS InterContinental Executive Top-Up Scheme

IC Plan InterContinental Hotels UK Pension Plan

LTIP Long Term Incentive Plan

OPR Overall performance rating

RevPAR Revenue per available room

TSR Total Shareholder Return

Summary of IHG’s Executive Director remuneration policy for 2013

Fixed remuneration Variable remuneration

SalaryPensionBenefits

Annual incentive – APP50% cash and 50% shares deferred for three yearsLinked to individual and company achievement using performance measures relating to:– Brands;– People; and– Delivery.

Long-term incentive – LTIPShare awards vest after three years if performance conditions are met:– 25% relative net rooms growth;– 25% relative RevPAR growth; and– 50% relative TSR v the DJGH index.

Minimum shareholding requirement

Corporate performance indicators 2012 2011 2010Operating profit before exceptional items +9.8%

$614m†

+25.9%$559mt

+22.3% $444m

Full-year dividend (excluding any special dividends and capital returns) 64 cents (41.2p) per share

55 cents (34.5p) per share

48 cents (30.0p) per share

Three-year total TSR (annualised) +28.2% +29.8% +8.0%

Three-year adjusted EPS (annualised) +21.7% +2.5% +9.6%

Budgeted salary increase (US and UK corporate employees) 3.0% 3.0% 2.9%†�Includes one significant liquidated damages receipt in 2012 of $3m in The Americas.t�Includes two significant liquidated damages receipts in 2011; $10m in The Americas and $6m in Asia, Middle East and Africa.

50� IHG Annual Review and Summary Financial Statement 2012

Summary Directors’ Remuneration Report

ApproachformembersoftheExecutiveCommitteeMembersoftheExecutiveCommitteearerewardedonthesamebasisastheExecutiveDirectors,participatinginthesameincentiveplansandwithasimilarsplitbetweenfixedandvariableremuneration,andbetweencashandshares.

Keychangesin2012Changestotheannualincentiveforseniorexecutives,includingtheExecutiveDirectors,wereapprovedbytheCommitteefor2013,withtheobjectiveofmorecloselyaligningrewardtothedeliveryofourstrategicobjectivesofBrands,PeopleandDelivery.

FactorstakenintoaccountindeterminingpayInmakingdecisionsinrelationto2012pay,theCommitteetookintoaccount:

•theachievementofcorporateperformancetargetsundertheABPandLTIP(seethetablesonpages55and56);

•anappropriatemixoffixedandvariablepay,withanemphasisondrivingperformancethroughapproximatelytwo-thirdsoftotalpaybeingvariable;

•payandconditionselsewhereintheGroup,includingtheaveragebudgetedsalaryincreasefortheemployeepopulation(seethetableonthepreviouspage);and

•thecorporateperformanceindicatorsshowninthetableonthepreviouspage.

A–KeyremunerationprinciplesIHG’sexecutiveremunerationprinciplesaredesignedtodrivethedeliveryofstrategicobjectivesby:

•attractingandretaininghigh-qualityexecutivesinanenvironmentwherecompensationisbasedonglobalmarketpractice;

•aligningrewardsforexecutiveswiththeachievementofbusinessperformancetargets,strategicobjectivesandreturnstoshareholders;

•supportingequitabletreatmentbetweenmembersofthesameexecutiveteam;and

•facilitatingglobalassignmentsandrelocations.

IHG’sremunerationstructureforseniorexecutivesplacesastrongemphasisonperformance-relatedreward.TheCommitteebelievesthatitisimportanttorewardmanagement,includingtheExecutiveDirectors,fortargetsachieved,providedthosetargetsarestretching.

B–LinkwithstrategyOurstrategy(summarisedbelow)isthedriverofourrewardstructure.ThecurrentperformancemeasuresusedinIHG’sincentiveplansarealignedwithourstrategicpriorities,whichwillenableustoachieveourVisionofbecomingoneofthegreatcompaniesintheworldbycreatingGreatHotelsGuestsLove.

Where we compete How we win

Relevant consumer segments

most attractive markets

appropriate business model


Long Term Incentive PlanMeasuresbalancethequalityofhotels

withthespeedatwhichwegrow:

Relative net rooms growthsupports our business model, segment

and market strategies to grow system size over three years

Relative RevPAR growthReflects the sustainable power of our Brands, scale and experience and engaged workforce

Focusses growth on quality rooms in key markets

Relative TSRprovides alignment with shareholder returns

Annual Performance PlanMeasuresprovidefocusonkeydriversofsustainablegrowth:

HeartbeatIncreases guest satisfaction as an

indicator of the strength of our Brands

Engagement Increases the engagement of our

people who bring our Brands to life

EBITprovides annual focus on earnings growth

driven by core operating inputs, namely rooms growth, RevpaR, fee revenue

and margins

Brands

People

Delivery

portfolio of preferred Brandstalented people

Best-in-class deliveryResponsible Business

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Summary Directors’ Remuneration Report 51

C–RemunerationpolicysummaryThefollowingtableshowsasummaryoftheindividualelementsofremunerationprovidedtotheExecutiveDirectorsfor2013.TheAPPreplacestheABPforseniorexecutivesfrom2013.

Rewardelement Purposeandlinktostrategy Operation Opportunity Performancemetrics Changesinyear

Salary(cash)

Recognisesthemarketvalueoftheroleandtheindividual’sskill,performanceandexperience.

Reviewedannuallyandfixedfor12monthsfrom1April.

Committeeconsiders:•businessandindividualperformance;•currentremunerationagainstinternalandexternal

benchmarks;and•averagesalaryincreasesforthewiderIHGworkforce.

Whenexternalbenchmarkingisused,thecomparatorgroupsarechosenhavingregardto:•size–marketcapitalisation,turnover,profitsandthe

numberofemployees;•diversityandcomplexityofthebusiness;•geographicalspreadofthebusiness;and•relevancetothehotelindustry.

Determinedannuallyonthefactorssetouttotheleft

None Directors’salariesincreasedbetween2.5%-3%in2012

APP

(50%cashand50%shares)

Drivesandrewardsannualperformanceagainstbothfinancialandnon-financialmetrics.

AlignsindividualsandteamswithkeystrategicprioritiesofBrands,PeopleandDelivery.

Alignsshort-termannualperformancewithstrategytogeneratelong-termreturnstoshareholders.

Takesintoaccountpersonalperformanceofindividuals.

Reviewedannuallywithtargetssetinlinewithstrategicobjectives.

Regionalaswellasglobaltargetsareusedwhenappropriate.

PaymentisdeterminedbytheCommittee,whichhascertainspecifieddiscretionsoverawardlevels,aftertheendoftheyear.

Target=115%ofsalary

Maximum=200%ofsalary

20%Brands:year-on-yearimprovementinguestsatisfaction

10%People:year-on-yearimprovementinemployeeengagement

70%Delivery:EBITvtarget

Alltargetsmeasuredoveroneyear

APPforseniorexecutivesfrom2013

LTIP

(shares)

Drivesandrewardsdeliveryofsustainedlong-termperformanceonmeasuresthatarealignedwiththeinterestsofshareholders.

AnnualawardsoverIHGshares,whichvestafterthreeyears,subjecttotheachievementofcorporateperformancetargets.

Reviewedannuallywithtargetssetinlinewithstrategicobjectives.VestingisconfirmedbytheCommitteeaftertheendofthevestingperiod,withdiscretiontoreducevestinglevelifthequalityoftheunderlyingperformanceoftheCompanyisnotsatisfactory.

Maximumfor2013/15LTIPcycle=205%ofsalary

Willnotexceedthreetimesannualsalaryotherthaninexceptionalcircumstances

25%relativenetroomsgrowthand25%relativeRevPARgrowth(bothmeasuredvcomparatorgroup):•20%thresholdvestingifequaltoaveragegrowthof

comparatorgroup;•maximumvestingifrankedas1stinthecomparator

group;and•straight-linevestinginbetween.

50%relativeTSR(vDJGHindex):•20%thresholdvestingifequaltoindex;•maximumvestingif8%ormoreperyearaheadofindex;and•straight-linevestinginbetween.

Alltargetsmeasuredoverathree-yearperformanceperiod

Nonein2012

Pension Helpsrecruitandretain.

Rewardslong-termindividualperformance.

Thefollowingplansareoperated:•forUKexecutives,theexecutivesectionofthe

InterContinentalHotelsUKPensionPlan(ICPlan),whichhasadefinedbenefitsection(UKDBPlan)andadefinedcontributionsection(UKDCPlan);

•forUKexecutives,theInterContinentalExecutiveTop-UpScheme(ICETUS);

•forUSexecutives,aDC401(k)Plan(US401(k)Plan)andaDCDeferredCompensationPlan(USDeferredCompensationPlan);and

•fornon-UKandnon-USexecutives,theInterContinentalHotelsGroupInternationalSavingsandRetirementPlan,andotherlocalplans.

AcashallowanceinlieuofpensionbenefitsisofferedforUKexecutives.

UKDBPlan:1/30thaccrualrate

UKDCPlan:7.5%employeecontributionwith30%matchingCompanycontribution

US401(k)Plan:2%-75%employeecontributionwith4%matchingCompanycontribution

USDeferredCompensationPlan:upto75%employeecontributionwith2%matchingCompanycontributionand4%-20%additionalCompanycontributionifcertainconditionsaremet

None Nonein2012

UKDBPlanwillclosetofutureaccrualforexistingmemberswitheffectfrom1July2013


Summary Directors’ Remuneration Report continued

Rewardelement Purposeandlinktostrategy Operation Opportunity Performancemetrics Changesinyear

Salary(cash)

Recognisesthemarketvalueoftheroleandtheindividual’sskill,performanceandexperience.

Reviewedannuallyandfixedfor12monthsfrom1April.

Committeeconsiders:•businessandindividualperformance;•currentremunerationagainstinternalandexternal

benchmarks;and•averagesalaryincreasesforthewiderIHGworkforce.

Whenexternalbenchmarkingisused,thecomparatorgroupsarechosenhavingregardto:•size–marketcapitalisation,turnover,profitsandthe

numberofemployees;•diversityandcomplexityofthebusiness;•geographicalspreadofthebusiness;and•relevancetothehotelindustry.

Determinedannuallyonthefactorssetouttotheleft

None Directors’salariesincreasedbetween2.5%-3%in2012

APP

(50%cashand50%shares)

Drivesandrewardsannualperformanceagainstbothfinancialandnon-financialmetrics.

AlignsindividualsandteamswithkeystrategicprioritiesofBrands,PeopleandDelivery.

Alignsshort-termannualperformancewithstrategytogeneratelong-termreturnstoshareholders.

Takesintoaccountpersonalperformanceofindividuals.

Reviewedannuallywithtargetssetinlinewithstrategicobjectives.

Regionalaswellasglobaltargetsareusedwhenappropriate.

PaymentisdeterminedbytheCommittee,whichhascertainspecifieddiscretionsoverawardlevels,aftertheendoftheyear.

Target=115%ofsalary

Maximum=200%ofsalary

20%Brands:year-on-yearimprovementinguestsatisfaction

10%People:year-on-yearimprovementinemployeeengagement

70%Delivery:EBITvtarget

Alltargetsmeasuredoveroneyear

APPforseniorexecutivesfrom2013

LTIP

(shares)

Drivesandrewardsdeliveryofsustainedlong-termperformanceonmeasuresthatarealignedwiththeinterestsofshareholders.

AnnualawardsoverIHGshares,whichvestafterthreeyears,subjecttotheachievementofcorporateperformancetargets.

Reviewedannuallywithtargetssetinlinewithstrategicobjectives.VestingisconfirmedbytheCommitteeaftertheendofthevestingperiod,withdiscretiontoreducevestinglevelifthequalityoftheunderlyingperformanceoftheCompanyisnotsatisfactory.

Maximumfor2013/15LTIPcycle=205%ofsalary

Willnotexceedthreetimesannualsalaryotherthaninexceptionalcircumstances

25%relativenetroomsgrowthand25%relativeRevPARgrowth(bothmeasuredvcomparatorgroup):•20%thresholdvestingifequaltoaveragegrowthof

comparatorgroup;•maximumvestingifrankedas1stinthecomparator

group;and•straight-linevestinginbetween.

50%relativeTSR(vDJGHindex):•20%thresholdvestingifequaltoindex;•maximumvestingif8%ormoreperyearaheadofindex;and•straight-linevestinginbetween.

Alltargetsmeasuredoverathree-yearperformanceperiod

Nonein2012

Pension Helpsrecruitandretain.

Rewardslong-termindividualperformance.

Thefollowingplansareoperated:•forUKexecutives,theexecutivesectionofthe

InterContinentalHotelsUKPensionPlan(ICPlan),whichhasadefinedbenefitsection(UKDBPlan)andadefinedcontributionsection(UKDCPlan);

•forUKexecutives,theInterContinentalExecutiveTop-UpScheme(ICETUS);

•forUSexecutives,aDC401(k)Plan(US401(k)Plan)andaDCDeferredCompensationPlan(USDeferredCompensationPlan);and

•fornon-UKandnon-USexecutives,theInterContinentalHotelsGroupInternationalSavingsandRetirementPlan,andotherlocalplans.

AcashallowanceinlieuofpensionbenefitsisofferedforUKexecutives.

UKDBPlan:1/30thaccrualrate

UKDCPlan:7.5%employeecontributionwith30%matchingCompanycontribution

US401(k)Plan:2%-75%employeecontributionwith4%matchingCompanycontribution

USDeferredCompensationPlan:upto75%employeecontributionwith2%matchingCompanycontributionand4%-20%additionalCompanycontributionifcertainconditionsaremet

None Nonein2012

UKDBPlanwillclosetofutureaccrualforexistingmemberswitheffectfrom1July2013

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Detailsofelementsshown:

2012actualsalarypaid–salaryfortheyear;forKirkKinsellthisshowsactualsalarypaidconvertedintosterling;

2012ABPcash–cashportionofABPawardfor2012performance;

2012ABPdeferredshares–valueofdeferredshareportionofABPawardfor2012performance(basedonsharepriceof1,707.0pasat31December2012);

2010/12LTIP–valueofLTIPawardduetoveston20February2013asaresultof2010to2012performance(basedonsharepriceof1,707.0pasat31December2012);

2012benefits–alltaxablebenefitsarisingfromtheindividual’semploymentin2012;thisincludestheprovisionofafully-expensedcompanycar,privatehealthcare,financialcounsellingandotherbenefits.ForKirkKinsell,thisincludesthecostofexpatriatebenefitsrelatedtohisinternationalassignmentpriortotakinguphisBoardappointmentasPresident,TheAmericas,on13June2011;

2012pensionbenefit–forRichardSolomons,theincreaseinpensionvalueduring2012;forotherExecutiveDirectors,thevalueofCompanycontributionstopensionplansoranycashallowancespaidinlieuofpensioncontributions.ThepensionbenefitaccruingtoRichardSolomonsin2012aroseprincipallyfromhissalaryreviewwhenappointedChiefExecutiveinJuly2011.

2009ABPdeferredshares–therewasnovestingofABPdeferredsharesrelatingto2009asnoannualincentivewaspaidinrespectoffinancialyear2009.

AllfiguresarecalculatedinaccordancewithourunderstandingoftherequirementsofthedraftBISregulationsondisclosureofexecutivepay.

D–Singlefigureremunerationin2012–actualandmaximum

SingleTotalFigureTable(£000) 2012 2012 2012ABP 2012actual 2012 pension ABP deferred 2010/12 Director salarypaid benefits benefit cash shares LTIP Total

RichardSolomons 716 48 1,140 494 494 1,738 4,630KirkKinsell* 474 663 110 306 306 1,287 3,146TracyRobbins 409 23 123 300 300 954 2,109TomSinger 540 19 162 346 346 1,194 2,607

*KirkKinsellispaidinUSdollarsandthesterlingvaluesinthechartabovehavebeencalculatedusinganexchangerateof$1=£0.63.

2010/12LTIP2012ABPdeferredshares2012ABPcash2012pensionbenefit2012benefits2012actualsalarypaid

Value (£000)

max

max

max

max

actual

actual

actualactual

0

1,000

2,000

3,000

4,000

5,000

6,000

Tracy RobbinsKirk Kinsell Tom SingerRichard Solomons



E–Salaryandbenefits•Basesalaryistheonlyelementofremunerationwhichis

pensionable.

•Inadditiontosalary,benefitsareprovidedtoExecutiveDirectors,whoareallbasedintheUKorUS,inaccordancewithlocalmarketpractice.

•TheoverallbudgetforsalaryincreasesforIHGcorporateemployeesintheUKandUS,andtheoverallincreaseintheDirectors’salariesfor2013isshownbelow:

UKcorporateemployees

UScorporateemployees

ExecutiveDirectors

3.0% 3.0% 2.5%

ExecutiveDirectorannualsalariesfor2012and2013

2013 2013 2012 2012Director £ $ £ $

RichardSolomons 739,000 721,000KirkKinsell* 774,000 755,400TracyRobbins 424,300 412,000TomSinger 550,800 540,000

* KirkKinsellispaidinUSdollarsandhisannualbasesalaryfor2012and2013isshowninUSdollarsabove.Theequivalentsterlingvaluescalculatedusinganexchangerateof$1=£0.63are:2012–£476,562;and2013–£488,296.

F–AnnualBonusPlan(ABP)StructureFrom2013,seniorexecutiveswillparticipateintheAPP,detailsofwhichareonpages52and53.In2012,ExecutiveDirectorsparticipatedinthe2012ABP,thestructureofwhichisasfollows:

ABP2012

30%individual

50%cash

Performancemeasures

Paymentstructure

70%EBIT

50%shares(deferredforthreeyears)

Themeasuresfor2012were:

•GlobalEBITachievementagainsttargetfor2012:

–thresholdpayout:90%oftargetperformance;

–maximumpayout:110%oftargetperformance;and

–straight-linevestinginbetween.

•OPR–basedonachievementofspecificindividualobjectiveslinkeddirectlytostrategicpriorities,andanassessmentagainstleadershipcompetenciesandbehaviours.TheobjectivesandOPRsarereviewedandagreedbytheCommittee.

2012targetandmaximumpayments

Keyperformance

Awardas%ofsalary

Measure indicator Target Maximum

Financial EBIT(70%) 80.5 161Individual OPR(30%) 34.5 69Totalfor2012 115 200*

*CombinedEBITandOPRpayoutsubjecttoamaximumof200%ofbasesalary.

Outcomefor20122012EBITachievedwas101.7%oftargetfortheyear.Basedonthisperformance,thefollowingtableshowsthelevelof2012awards.50%waspaidincashand50%indeferredsharesthatwillvestafterthreeyears.

EBIT% OPR% TotalawardasDirector award award %ofsalary

RichardSolomons 93.8 43.1 136.9KirkKinsell 93.8 34.5 128.3TracyRobbins 93.8 51.8 145.6TomSinger 93.8 34.5 128.3

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G–LongTermIncentivePlan(LTIP)Structureandoutcomefor2012Theawardforthe2010/12cyclehadcorporateperformancemeasuresbasedonrelativeTSRandEPS.Thestructureisasfollows:

LTIP2010/12

50%EPS

Performancemeasures

Paymentstructure

50%TSR

100%shares

Themeasuresandoutcomesareasfollows:

Performancemeasure

Thresholdperformance

Maximumperformance

Threshold/maximum

vesting

Weighting Maximumaward–%ofsalary

Outcome

2010/12cycle

TSR GrowthequaltotheDJGHindex

Growthexceedstheindexby8%peryearormore

20%/100% 50% 102.5% Growthexceededindexby15%peryear

EPS Growthof5%peryear

Growthof15%peryearormore

20%/100% 50% 102.5% Growthof21.7%peryear

Totalvestingoutcome

100%ofmaximumaward

CurrentpositiononotheroutstandingawardsFrom2011,theperformancemeasuresfortheLTIPwerechanged.Detailsoftheperformancemeasuresandpotentialvestingoutcomesforoutstandingawardsasat31December2012areasfollows:

Performancemeasure

Thresholdperformance

Maximumperformance

Threshold/maximumvesting

Weighting Maximumaward–%ofsalary

Potentialvestingoutcomes

2011/13cycle

Netroomsgrowth

Averageofthecomparatorgroup

1stinthecomparatorgroup

20%/100% 25% 51.25% Improvedperformanceneededtoachievethresholdvesting

RevPARgrowth



20%/100% 25% 51.25% Betweenthresholdandmaximumvestingifcurrentperformancemaintained



20%/100% 50% 102.5% Maximumvestingifcurrentperformancemaintained

2012/14cycle

Netroomsgrowth




RevPARgrowth






20%/100% 50% 102.5% Maximumvestingifcurrentperformancemaintained



H–ExecutiveshareholdingrequirementTheCommitteebelievesthatshareownershipbyExecutiveDirectorsandseniorexecutivesstrengthensthelinkbetweentheindividuals’personalinterestsandthoseoftheshareholders.

ExecutiveDirectorsareexpectedtoholdallsharesearned(netofanysharesalesrequiredtomeetpersonaltaxliabilities)untiltheguidelineshareholdingrequirementisachieved.

SharesheldbyExecutiveDirectors

Sharesheldoutright Totalsharesandawards4 Guidelineshareholdingrequirement

ABP Total Guideline Sharesheld deferredshare LTIPshare sharesand shareholdingas outrightas awardsas awardsas awardsasDirector %ofsalary %ofsalary1 %ofsalary2 %ofsalary3 %ofsalary4

RichardSolomons 300 763 153 693 1,609KirkKinsell 200 557 180 776 1,513TracyRobbins 200 355 167 706 1,228TomSinger5 200 66 0 715 781

Percentagesarebasedonsharepriceof1,707.0ppershareasat31December2012.

1 SharesheldoutrightbyeachExecutiveDirectorwithnorestrictions.2 ABPdeferredshareawardssubjecttoriskofforfeitureifemploymentceases.3 LTIPshareawardssubjecttoachievementofcorporateperformancetargets.4 Includessharesheldoutright,ABPdeferredsharesandLTIPshareawards.5 TomSingerjoinedin2011anddidnotqualifyforthe2011ABPdeferredshareaward.

0 1,600200 400 600 800 1,000 1,200 1,400%

Richard Solomons

Kirk Kinsell

TomSinger

Tracy Robbins

I–PensionsIHGoperatesthefollowingpensionarrangementsinwhichtheExecutiveDirectorsparticipate:

•forUKexecutives,theexecutivesectionoftheICPlan,whichhasaDBsectionandaDCsection(theUKDBPlanandtheUKDCPlanrespectively);

•forUKexecutives,ICETUS;thisisanunfundedarrangement,butwithappropriatesecurity;

•forUSexecutives,theDCUS401(k)PlanandtheDCUSDeferredCompensationPlan;and

•forexecutivesoutsidetheUKandUS,theInterContinentalHotelsGroupInternationalSavingsandRetirementPlan,orotherlocalplans.

Asanalternativetothepensionarrangements,acashallowancemaybetakeninlieubyUKexecutives.

FollowinganextensiveUKpensionreviewandsubsequentconsultationswithaffectedemployees,itwasannouncedon29September2011thattheUKDBPlanwouldclosetofutureaccrualforexistingmemberswitheffectfrom1July2013.TheUKDBPlanisalreadyclosedtonewentrants.AcaponpensionablesalaryincreasesofRPIplus2.5%perannumbecameeffectiveon1October2011.

Aspartoftheconsultationwithemployeesandtheplantrusteesaboutthesechanges,itwasagreedthattheEnhancedEarlyRetirementFacility(EERF)wouldberetained.Thisprovidesanoptionforplanmembers,withtheCompany’sagreement,toretirewithinfiveyearsofnormalretirementageonaccruedbenefitswithoutreduction.ThelevelofplanfundingprovidesfortheEERF.TheCommitteeconsideredthatthereductioninriskandexpenseachievedbytheclosingoftheUKDBPlanjustifiedthecostofretainingtheEERFforexistingactivemembers.

TheExecutiveDirectorsparticipateasfollows:

•RichardSolomonsparticipatesintheUKDBPlanandtheICETUSonthesamebasisasotherseniorUK-basedexecutives;

•TracyRobbinsparticipatedintheexecutiveUKDCPlanonthesamebasisasotherseniorUK-basedexecutivesuntilMarch2012;fromApril2012shereceivedacashallowanceinlieuofpensionbenefits;

•TomSingerdoesnotparticipateinanypensionplanandreceivesacashallowanceinlieuofpensionbenefits;and

•KirkKinsellparticipatesintheDCUS401(k)PlanandtheDCUSDeferredCompensationPlan.

ThevalueofRichardSolomons’DBpensionarrangementasat31December2012issetouttotheright.

RichardSolomonsiseligiblefortheEERF,whichisavailabletoallmembersoftheUKDBPlan,asexplainedabove.Thisenablesmemberstoretirewithoutreductionintheirpensioniftheyarewithinfiveyearsofnormalretirementage.AlthoughtheEERFisnon-contractual,itscontinuationformedpartoftheagreementwithtrusteesonclosureoftheUKDBPlan.TheEERFtermsrequireanexecutivetoobtaintheconsentoftheCompany;theconsentisdiscretionarybutshouldnotbeunreasonablyrefused.

Accruedvalueofannualpensionifretired31December2012

Accruedvalueofannualpensionat31December2012,assumingretirementatnormalretirementage(9October2021)

£245,180,ofwhich:

•£46,770isfunded•£198,410isunfunded

£377,200,ofwhich:

•£71,950isfunded•£305,250isunfunded

Theincreaseintheaccruedvalueofthepensionin2012arisesprincipallyfromRichardSolomons’salaryreviewwhenappointedChiefExecutiveinJuly2011.

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Investor information

WebsiteandelectroniccommunicationAspartoftheCompany’scommitmenttoreducingthecostandenvironmentalimpactofproducinganddistributingprinteddocumentsinverylargequantities,IHG’sAnnualReportandAnnualReviewhavebeenmadeavailabletoshareholdersthroughtheCompany’swebsitewww.ihgplc.com/investorsunderfinanciallibrary.

ShareholdersmayappointelectronicallyaproxytovoteontheirbehalfonanypollthatistobeheldattheforthcomingAnnualGeneralMeeting.ShareholderswhoholdtheirsharesthroughCRESTmayappointproxiesthroughtheCRESTelectronicproxyappointmentservice,byusingtheproceduresdescribedintheCRESTManual.

ShareholderHotelDiscountPromotionIHGoffersdiscountedhotelstays(subjecttoavailability)forregisteredshareholdersthroughadedicated,controlledaccesswebsite.ForfurtherdetailspleasecontacttheCompanySecretariatdepartmenton01895512000oremailcompanysecretariat@ihg.com

CorporateResponsibilityReportIHGupdatesitsonlineCorporateResponsibilityReportregularly,coveringprogressonarangeofenvironmental,socialandcommunityissues.Thiscanbeviewedatwww.ihgplc.com/responsibility

IHGShelterinaStormProgrammeTheIHGShelterinaStormProgrammeenablesIHGtosupportourhotelsandsurroundingcommunities,employeesandguestswhenadisasterstrikes,byprovidingimmediateandvitalassistance.

Ifyouwouldliketomakeadonationtotheprogramme,youcandosoonlineviaasecurepaymentpagewww.ihgshelterinastorm.com

RegistrarForinformationonarangeofshareholderservicesincluding,enquiriesconcerningindividualshareholdings,notificationofashareholder’schangeofaddressandamalgamationofshareholderaccounts(inordertoavoidduplicatemailingofshareholdercommunications),shareholdersshouldcontacttheCompany’sRegistrar,Equiniti,on08713842132†* (callsfromwithintheUK)or+44(0)1214157034(callsfromoutsidetheUK).

Dividendservices

DividendReinvestmentPlan(DRIP)TheCompanyoffersaDRIPforshareholderstopurchaseadditionalIHGshareswiththeircashdividends.ForfurtherinformationabouttheDRIP,pleasecontactourRegistrarhelplineon08713842268†*.ADRIPapplicationformandinformationbookletareavailableatwww.shareview.co.uk/products/pages/applyforadrip.aspx

BankmandateWeencourageshareholderstohavetheirdividendspaiddirectlyintotheirUKbankorbuildingsocietyaccounttoensureefficientpaymentandfundsbeingclearedonthepaymentdate.

ShareholderswhowouldliketheirdividendstobepaiddirectlyintotheiraccountshouldcontactourRegistrar.

OverseaspaymentserviceItisalsopossibleforshareholderstohavetheirdividendspaiddirecttotheirbankaccountinalocalcurrency.Chargesarepayableforthisservice.Furtherinformationisavailableatwww.shareview.co.uk/shareholders/pages/overseaspayments.aspx

Outofdate/unclaimeddividendsIfyouthinkthatyouhaveoutofdatedividendchequesorunclaimeddividendpaymentspleasecontactourRegistrar.

IndividualSavingsAccount(ISA)EquinitioffersaStocksandSharesISAwhereIHGsharescanbeinvested.ForfurtherinformationpleasecontactEquinition08713842244†*.

SharedealingservicesEquinitioffersthefollowingsharedealingfacilities:

PostaldealingFormoreinformationcall08713842248†*.

TelephonedealingCall08456037037†•.

InternetdealingLogontowww.shareview.co.uk

ChangestothebasecostofIHGsharesDetailsofallthechangestothebasecostofIHGsharesheldsinceApril2003toDecember2012,forUKCapitalGainsTaxpurposes,maybefoundontheCompany’swebsitewww.ihgplc.com/investorsundershareholdercentre/taxinformation.

MissingshareholdersWorkingwithProSearch(anassetreunificationcompany),wecontinuetolookforshareholderswhohavenotkepttheircontactdetailsup-to-date.Wehavefundswaitingtobeclaimedandarecommittedtodoingwhatwecantopaythesetotheirrightfulowners.ForfurtherdetailspleasecontactProSearchon01732741411oremailinfo@prosearchassets.com

ShareholdersecurityManycompanieshavebecomeawarethattheirshareholdershavereceivedunsolicitedtelephonecallsorcorrespondenceconcerninginvestmentmatters.Thesearetypicallyfrom‘brokers’whotargetUKshareholders,offeringtosellthemwhatoftenturnouttobeworthlessorhigh-risksharesinUSorUKinvestments.Theseoperationsarecommonlyknownas‘boilerrooms’.MoredetailedinformationonthisorsimilaractivitycanbefoundontheFinancialServicesAuthoritywebsitewww.moneyadviceservice.org.uk

DetailsofanysharedealingfacilitiesthattheCompanyendorseswillbeincludedinCompanymailings.

AmericanDepositaryReceipts(ADRs)TheCompany’ssharesarelistedontheNewYorkStockExchangeintheformofAmericanDepositaryShares,evidencedbyADRsandtradedunderthesymbol‘IHG’.

EachADRrepresentsoneordinaryshare.AllenquiriesregardingADRholderaccountsandpaymentofdividendsshouldbedirectedtoJPMorganChase&Co,ourauthorisedADRdepositarybank(contactdetailsshownonpage59).

Form20-FTheCompanyissubjecttothereportingrequirementsoftheSecuritiesandExchangeCommission(SEC)intheUSandfileswiththeSECanAnnualReportonForm20-F.TheForm20-FcanbefoundontheCompany’swebsitewww.ihgplc.com/investorsundershareholdercentre/ADRholdersorbyvisitingtheSEC’swebsitewww.sec.gov/edgar.shtml

† Callscost8pperminuteplusnetworkextras.* Linesareopenfrom8.30amto5.30pmMondaytoFriday,

excludingUKpublicholidays.• Linesareopenfrom8.00amto4.30pmMondaytoFriday,

excludingUKpublicholidays.

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Investor information, Financial calendar and Contacts 59

Financial calendar

2012Interimdividendof13.5ppershare(21.0¢perADR): Paymentdate 28SeptemberSpecialdividendof108.4ppershare($1.72perexistingADR): Paymentdate 22OctoberFinancialyearend 31December

2013Preliminaryannouncementofannualresults 19FebruaryFinaldividendof27.7ppershare(43.0¢perADR): Ex-dividenddate 20March Recorddate 22MarchAnnouncementoffirstquarterinterimmanagementstatements 8MayAnnualGeneralMeeting 24MayFinaldividendof27.7ppershare(43.0¢perADR): Paymentdate 31MayAnnouncementofinterimresults 6AugustInterimdividend: Paymentdate OctoberAnnouncementofthirdquarterinterimmanagementstatements 5NovemberFinancialyearend 31December

2014Preliminaryannouncementofannualresults February

Contacts

RegisteredofficeBroadwaterParkDenhamBuckinghamshireUB95HR

Telephone +44(0)1895512000

Fax +44(0)1895512101

www.ihgplc.com

ForgeneralinformationabouttheGroup’sbusinesspleasecontacttheCorporateAffairsdepartmentattheaboveaddress.ForallotherenquiriespleasecontacttheCompanySecretariatdepartmentattheaboveaddress.

RegistrarEquinitiAspectHouseSpencerRoadLancingWestSussexBN996DA

Telephone 08713842132*†(UKcalls)

+44(0)1214157034(non-UKcalls)

www.shareview.co.uk*Forthosewithhearingdifficultiesatextphoneisavailableon08713842255†forUKcallerswithcompatibleequipment. †Callscost8pperminuteplusnetworkextras.Linesareopenfrom8.30amto5.30pmMondaytoFriday,excludingUKpublicholidays.

ADRdepositaryJPMorganChaseBankN.A.POBox64504St.PaulMN55164-0504USA

Telephone +18009901135(UScalls)(tollfree)

+16514532128(non-UScalls)

[email protected]

www.adr.com

AuditorsErnst&YoungLLP

InvestmentbankersBankofAmericaMerrillLynchGoldmanSachs

SolicitorsFreshfieldsBruckhausDeringerLLP

StockbrokersBankofAmericaMerrillLynchGoldmanSachs

PriorityClubRewardsIfyouwishtoenquireabout,orjoinPriorityClubRewards,IHG’sloyaltyprogramme,visitwww.priorityclub.comortelephone:

08712261111∞(inEurope)

+18882119874(inUSandCanada)(tollfree)

+18002729273(inMexico)(tollfree)

+18019753063(English)(inCentralandSouthAmerica)(tollchargesapply)

+18019753013(Spanish)(inCentralandSouthAmerica)(tollchargesapply)

+6328578788(frommostcountriesinAsiaPacific)(tollchargesapply)

+86(0)2034198282(MandarinandCantonese)(inChinaandHongKong)(tollchargesapply)

+97144290530(inMiddleEastandAfrica)(tollchargesapply)

∞Telephonecallstothisnumberarechargedat10pperminute.Standardnetworkratesapply.Callsfrommobileswillbehigher.

Forfurtherinvestorinformationvisitwww.ihgplc.com/investors

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TheHolidayInn®brandreceivedthehighestnumericalscoreamongmid-scalefullservicehotelsintheproprietaryJ.D.PowerandAssociates2011-2012NorthAmericaHotelGuestSatisfactionIndexStudysm.Studybasedonresponsesfrom61,716guestsmeasuringsevenmid-scalefullservicehotelsandmeasuresopinionsofguestswhostayedinahotelJune2011-May2012.ProprietarystudyresultsarebasedonexperiencesandperceptionsofconsumerssurveyedAugust2011-May2012.Yourexperiencesmayvary.Visitjdpower.com.

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InterContinental Hotels Group PLC Broadwater Park, Denham, Buckinghamshire UB9 5HR United Kingdom

Tel +44 (0) 1895 512 000 Fax +44 (0) 1895 512 101Web www.ihgplc.com Make a booking at www.ihg.com

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