ASSET-LIGHT GROWTH IN EMERGING MARKETS - Carlson

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ASSET-LIGHT GROWTH IN EMERGING MARKETS - Carlson

ASSET-LIGHT GROWTHINEMERGING MARKETSKURT RITTERPRESIDENT & CEOCapital Market Day3 June 2010, London


REZIDOR UPDATERADISSON ROYAL HOTEL, MOSCOW


A HISTORY OF UNPARALLELED ORGANIC GROWTH400+ Hotels and 84,000 rooms in operation and under development406AFRICAIPO— 28 —YTD JUNE 2010


THE WORLD OF REZIDOR• 400+ hotels- 300 in operation- 100+ in pipeline• 84,000+ rooms- 64,000 in operation- 20,000+ in pipeline• 62 countriesCARLSON + REZIDOR 78 COUNTRIES 1,100 HOTELS 161,000 ROOMS— 29 —YTD JUNE 2010


PORTFOLIO SNAPSHOT300 HOTELS – 64,000 ROOMSIN OPERATION100+ HOTELS – 20,000+ ROOMSIN PIPELINE— 30 —YTD JUNE 2010


KEY STRATEGIESDEVELOPMENT – KEEP THE PACEContinue Asset-light Growth With Focus On EmergingMarkets and ConversionsOne Of TheFastestGrowing, MostDynamic HotelCompanies InEMEABRANDS – QUALITY, PROFITABLE GROWTHGLOBAL ALIGNMENTGrow Pure, New Breed, Profitable HotelsREVENUE – LEAVE NO STONES UNTURNEDGrasp Every New Business OpportunityZ-FACTOR – FULL THROTTLEInnovation – Work Smarter!— 31 —


BRAND POSITIONINGCORE COMPETENCEBrandManagementLuxuryFirst classMid-marketHoliday InnNovotelScandicMorganWRitz CarltonBvlgariInterContinentalHiltonMarriottSheratonSofitelFour SeasonsOur luxury brandOur lifestyle brandOur up-marketcore brandOur mid-marketgrowth brandCultureof ServiceEconomyFormule 1IbisOur “up the sleeve”brandBudgetIncreased level of service— 32 —SOURCE: HVS INTERNATIONAL


STRATEGIC MOVES• Sale of Regent• Park Inn becomes Park Inn by Radisson• Park Inn clustering• Adding hotel portfolio in the Baltics• Cooperation with Carlson on2015 Ambition – Global alignment• South Africa Joint Venture with Mvelphandaand Afrinord• Asset-Light Pipeline – no leases in pipelineafter 2011• Concentrate on emerging marketsRADISSON BLU RESORT & SPA, DUBROVNIK SUNGARDENS— 33 —


OTHER ACHIEVEMENTS• 2009 Record breaking year of new openings• 4,000+ rooms opened YTD 2010• First Hotel Missoni opening in Edinburgh – 4 more in pipeline• Leading hotel operator in Russia and CIS• Largest Airport hotel operator in Europe• Leading hotel chain in the Nordics for Business Traveller (BDRC)• Winners of Movers & Shakers award in Africa• Strong resort portfolio• 90+ Rezidor branded bars and restaurants• Highest Employee Satisfaction scores in history of the company• World’s Most Ethical Hotel Company award by Ethisphere• Best Corporate Governance on HVS Board Masters Ranking for Europe— 34 —


REZIDOR VS. THE CRISISA well Prepared and Dynamic Response to the DownturnRezidor LFL RevPAR DevelopmentRezidor’s ResponseQ1/Q2.08 +9%Q3.08 0% H4T MEUR 20Q4.08 -5% H4T MEUR 30Q2.09 -23%H4T MEUR 5(Central Costs)— 35 —


RADISSONLargest Upscale Brand In EuropeNUMBER OF HOTELSNUMBER OF ROOMS— 36 — SOURCE: MKG/HTR EUROPEAN RANKING MARCH 2010


LARGEST UPSCALE & MID-SCALE PIPELINE INEurope5,3993,6016,0474,0752,9063,8391,9423,0141,2482,8631,1032,3519191,156— 37 —SOURCE: STR GLOBAL COMPREHENSIVE PIPELINE OUTLOOK (EUROPE)MARCH 2010


Fastest Growing Mid-scale Hotel Brand in EuropeHighest Ranked on J.D. Powers inEuropean Guest Satisfaction Index— 38 —


WHY EMERGING MARKETS?• Under supply of hotels— Russia/CIS: Lack of unbrandedhotels in large cities— Africa: Outdated hotel inventory andup & coming new destinations• Stronger GDP growth vs mature markets• Increase in travel and tourism• More air traffic• Mature Europe most important feedermarket• Right contract type• High maintenanceRADISSON BLU HOTEL, PORT ELIZABETH, S. AFRICA— 39 —


OUR BACKGROUND IN EMERGING MARKETS1980 SAS Hotel Kuwait, first hotel outside Scandinavia1994 Master agreement with Carlson, takeover of hotels in Riga, Budapest, Russia and Poland1999 Radisson Waterfront Cape Town, first hotel in Africa2001 Radisson Resort Sharm el Sheikh, Egypt, first North Africa resort2002 Radisson Slavjanskaya, Moscow2004 Development office in Russia2005 Afrinord established2006 IPO on Stockholm Stock ExchangeDevelopment office in Cape TownPark Inn Pribaltiyskaya & Pulkovskaya in St. Petersburg (2000+ rooms)2009 Strategic development agreement with RHC in Russia to develop Park InnJoint Venture in South Africa2010 Opening of Radisson Royal Moscow, landmark project— 40 —


TOP PRIORITIES FOR 2010• Profitable fee based growth• Emerging markets and strategic locations• Un-committed contracts• Conversions & takeovers• Portfolio management• Cash protection• Maintain fixed cost level• Capturing revenue• Top-line concentration• Z-factorPARK INN KRAKOW— 41 —


REZIDOR – AN EXCITING INVESTMENT CASEAttractive IndustryLeaders in key and emerging marketsGlobal brandsAsset light and flexible business modelSubstantial contracted development pipelineAttractive partner to hotel owners & developersSignificant benefits from partnership with CarlsonStrong Portfolio GrowthPipeline 20,000+rooms+Significantmargin expansion=Continued fastprofitable growth— 42 —


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