24 July 2017

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The Hotel Evolution Emerging lifestyle products and brands Alan Watts, Chief Operating Officer, AMEA

New Zealand in an up-cycle

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International tourism contributes

$11.8 billion

Holiday arrivals up

14.1% Indian arrivals up

12.3%

USA arrivals up

29.6%

Australian arrivals up

7.6%

China, Japan and Germany

arrivals up

New supply is coming…

68.0%

70.0%

72.0%

74.0%

76.0%

78.0%

80.0%

82.0%

$80

$100

$120

$140

$160

$180

$200

2013 2014 2015 2016 May-17

Occupancy rate ADR RevPar

Source: TIA

25,000

26,000

27,000

28,000

29,000

30,000

31,000

32,000

33,000

2012 2013 2014 2015 2016

NZ Room Supply

Source: Stats.co.nz

Broad appeal brands will always have a home © 2017. All rights reserved. Proprietary and confidential But we need diversity to avoid contraction

Kimpton Hotel Palomar Phoenix

Lifestyle out pacing

2.9% 3.2%

4.0%

Upper Upscale Total Market Lifestyle

U.S. Rooms Demand CAGR, 2010-15

Launch Year

Hotel Count

1998 49

2007 16

2010 4

2010 4

2001 3

The rise of luxury lifestyle

“Experiential luxury accounts for almost 55% of total luxury spend worldwide, and has grown

50% faster than sales of luxury products.”

– Boston Consulting Group

“Consumers want to be one IN a million, not one OF a million.” – The NPD Group

“Forty-four percent of Chinese consumers said that they prefer experiential luxury such as spas and resorts rather than material items.”

– Mintel Research Group

A growing global trend

Boutique, lifestyle & niche

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The new traveller is defining the product

INDEPENDENT BOUTIQUES

CLUB CONCEPT

PRIVATE RESIDENCES

Neighborhood story

Wellness niche Luxury lifestyle

IHG’s evolving experiences

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© 2017. All rights reserved. Proprietary and confidential

The challenge of boutique

“America’s Best Employer,” 2016

“Best Companies to Work For,” 2009, 2011-16

Bring the experience to life

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Beware of Whales..

What we need to do, together

1.  Invest in diversified hotel stock 2.  Capture the evolving traveler market 3.  Attract the right talent 4.  Deliver an experience

Thank you