Operational Philosophy Our dedicated corporate operations team will support each discipline within the organization. Our extensive service experience makes this leadership team a differentiator for Virgin Hotels. This experience informs our heightened service standards and operating procedures by discipline and a mystery shopper program that ensures the standards are maintained. We will also incorporate a consistent internal audit system and scoring methodology for process improvement possibilities. From guest preferences to request tracking systems, we will utilize available technologies to perpetually communicate feedback from operations and guests. Our intranet will house all of this operations data, posting scores and guest service stories.

Other differentiators include our in-house food and beverage operation and our established relationships with top operators. From our in-house design and architecture departments to our own internal technical services department, Virgin Hotels is positioned to enter the hospitality industry with the operational fundamentals in place to build a strong new brand of hotels.

Operations Formula

Operating Discipline + Distribution

• Higher REVPAR • Higher Margins • Higher Guest Loyalty

Cycle of Operations

The Process

• People-First Mentality

• Balanced Scorecard Approach • Focus on Process Improvement • Keep-It-Simple “OPS” • Use Technology to Free up Talent • CRM Linked to Guest Preferences System • One-Stop Shop Customer Service • Mystery Shopper System • Intranet Houses Business Intelligence Data

The Operating Platform

Virgin Hotels Brand Pillars

Culture

• Virgin Hotels Purpose • Core Beliefs • Training Methodology

Service Experience

• Service Experience Differentiators • Technology Experience and Interface

Operating Standards

• Service standards • SOPs • Training • Quality Improvement • Financial Reporting

Design and Brand Standards

• Design Parameters • Facilities Programming Standards • MEP Standards • OSE Standards • Technology Standards • Sustainability Strategy

Technology

• Vision • Selection Criteria • Operating Systems • Guest Technology • Cloud Systems • Strategic Partnerships

Operating Leverage Results:

• Lower Brand Fees than Industry Averages • Higher Department Profit Margins • Higher GOP Margins • Higher Associate Satisfaction Scores • Lower Turnover • Higher Guest Satisfaction Ratings

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Marketing Virgin Hotels' marketing efforts are strongly rooted in digital, CRM and public relations. Leveraging Virgin’s global brand awareness to create collaborative marketing strategies with its other companies will allow Virgin Hotels to quickly garner brand awareness in the hotel industry in a fraction of the time it would take another new hotel brand.

Digital Marketing

Digital marketing is at the core of our marketing strategy as it achieves the most optimal revenue results while providing the highest ROI. We place a large amount of resources against creating the best in class websites, SEO/SEM efforts, email and mobile marketing, social media, and visually engaging content.

Understanding Our Customer

Understanding our customer all the way through is vital to our marketing campaigns as we strive to provide meaningful, and contextual offers as well as personalizing their stay by knowing their preferences.

Customer Relations Management

Our CRM will be centered on bringing in new ambassadors for the Virgin Hotels brand as well as introducing it to the 65 million Virgin consumers worldwide.

Virgin Airlines Customer Base

Virgin Hotels will immediately align itself with the over 8 million Virgin Atlantic, America and Australia frequent flyers converting them into frequent hotel guests through preferred offers and status.

Earned Media

We value the importance of earned media and what that means to the hotels bottom line so our public relations efforts are focused on providing exciting and relevant content that will be picked up by our targeted digital and traditional media outlets.

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Direct Sales The property sales force, working in tandem with the sales force for Virgin America and Virgin Atlantic, make a winning combination in achieving our topline goals. Ours sales teams consist of the most tenacious, and value driven professionals that provide revenue building in the following key segments:

• Group—meetings, incentive trips, conferences and exhibition (MICE), from corporations, associations and social organizations

• Entertainment—television, movie, and music • Travel—travel management companies (TMC), consortia, tour and wholesale • Corporate Transient—business travel (managed and unmanaged)

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Distribution & Revenue Management Virgin Hotels provides a powerful and cost-effective distribution system along with best-in-class technology resulting in exceptional top and bottom line results. Our distribution system is fully integrated with our revenue management, customer relationship and property management systems, as well as the Global Distribution Systems (GDS) used by travel agents and online travel agencies (OTAs). This allows for real-time revenue management strategies to take place and provide market-share premiums in any city a Virgin Hotel calls home.

Central Reservation System

Sabre Hospitality Solutions' industry-leading SynXis CRS powers our distribution. Its next-generation application framework combines state-of-the-art technology with advanced user features to deliver the most flexible and easy-to-use reservation and distribution solution.

Revenue Management System

IDeaS Revenue Management System provides us with the most reliable, up-to-date information at our fingertips. Simple keystrokes, coupled with Virgin Hotels revenue management guiding practices, allow us to book the right guest at the right time at the right rate. This is what leads to steadily increasing revenue.

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Human Resources

Infrastructure

• Global HR support from Virgin Group.

• Virgin “Open Door and Fair Treatment Policies” promoting fairness, stability, and low turnover.

• Succession planning program with other Virgin companies. • Ongoing organizational climate surveys. • Virgin packaging of workman’s compensation, national health, safety, and

comprehensive loss/risk management services and materials.

Proactive Hiring & Training:

• Simple job descriptions to minimize ambiguity. • Tough screening processes coupled with exceptional orientations. • Training intertwined with everyday work activities and meetings to reduce costs. • Supplementary online training. Virgin University. • Daily pre-shift meetings focusing on “Service Standards of the Day.” • Internal social media programs aimed at spreading the culture.

Safety:

• Compliance with applicable regulatory mandates. • Progressive safety programs. • Reduced costs through reduced claims.

Recognition & Improvement:

• Performance-based compensation with incentives to exceed targets. • Over-the-top recognition and celebrations. • Twice-a-year Associate Opinion Survey independently managed with results

posed online. • Internal company newsletter focused on associates. • Interactive and social intranet housing all forms, documents, standards, awards,

and recognition such as posted service stories.

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Finance • A focus on internal financial controls. • Detailed accounting standard operating procedures. • State-of-the-art, web-based accounting system allowing immediate access to

hotel financial information plus consolidated and ad hoc reporting capabilities. • All modules are written specifically for Virgin Hotels. • Consistent internal audits and follow up plans and actions with a low threshold

for non compliant items. • Balance sheet and cash management focus. • Short and long term forecasting looking for potential revenue enhancement and

cost reduction opportunities. Forecasting accuracy standards. • Weekly property updates with a focus on “metrics that matter.”

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