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BUILDING PURE BREED BRANDS FOR WORLD-WIDE, WORLD-CLASS HOSPITALITY

V I E W C C O ' S V I D E O M E S S A G E E R I C D E N E E FE X E C U T I V E V I C E P R E S I D E N T & C H I E F C O M M E R C I A L O F F I C E R

A COMMERCIAL STRATEGY PUTTING CUSTOMERS CENTER-STAGE

1. GUEST EXPERIENCE & ENGAGEMENT

2. BRAND WEB DIRECT

3. INDIRECT ONLINE CONTRIBUTION

4. CARLSON REZIDOR INFLUENCED BUSINESS

5. BUSINESS ANALYTICS

CAPTURE ONLINE BUSINESS

LEVERAGE LOYALTY & ENGAGEMENT

DRIVE MEETINGS & EVENTS

THESE FIVE ESSENTIAL COMPONENTS TURNED IN SYNC THROUGHOUT 2016 TO DELIVER ON THREE KEY REVENUE GENRATION PRIORITIES:

A KEY DRIVER FOR OUR REVENUE GENERATION STRATEGY, WE CREATED A SIMPLE, BUT HIGHLY EFFECTIVE, FIVE-SPOKE REVGEN WHEEL. IT FEATURES:

FOCUSED ON CUSTOMERSChanging customer trends, loyalty patterns and the growing power of influencers and social media, means it is now vital for us to be truly agile, innovative and customer focused. Our Revenue Generation efforts must powerfully focus on the guest: we must consistently deliver a uniquely positive experience that indelibly connects the customer with our hotels, our brands and our team. Every smile, every handshake, every guest interaction offers a chance to establish this crucial connection. A chance to make the ordinary extraordinary. To delight. To make every moment meaningful – and truly memorable.

We live and work in the middle of a global digital revolution. It is all around us, influencing everything we do on a daily basis. It has transformed our industry. And it has become a key driver for Rezidor’s Revenue Generation strategy, as we work to consistently delight our guests in a rapidly changing world. Success in the current shifting hospitality landscape requires a truly winning commercial strategy: one driven by passion, perseverance and performance.

Happily, these are traits that our Revenue Generation (RevGen) team of experts - in sales, revenue optimization and distribution, marketing, loyalty, and corporate communications, public relations, brand and reputation management – possess in abundance. So now, more than ever before, we must utilize these qualities to fuel a wide range of essential initiatives, designed to improve brand awareness, customer loyalty and solid financial performance.

Our goal: to drive profitable total revenue growth, targeting a system contribution of 70 percent by 2020.

Rezidor’s dynamic RevGen Wheel is a unique tool, designed to ensure that our RevGen engine embraces the shifting dynamics of our modern marketplace. It helps us race toward our goal as we focus on our key priorities, creating a vital, personal connection with our customers, partners, owners and team members – both offline and online.

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THE REVGEN

THE REVGEN WHEEL 5 KEY COMPONENTS

GUEST EXPERIENCE & ENGAGEMENT

Consistent, caring, customer-focused. At Rezidor, it’s all about the guest and the experience, every step of the way. To ensure the optimum guest experience, we focus on the consistent and caring delivery of our brand promises at every moment of every day. And to cultivate even stronger relationships, we leverage customer experience management initiatives. On the commercial front, we create exciting, insight-driven, targeted communications and curated content to maximize customer engagement through all media and online channels. We also deliver a powerful, integrated communication and public relations strategy to serve a corporate purpose with a consistent brand message and to drive stakeholder engagement and industry leadership. Wherever our customers “live” in this digital world, we aim to reach out and embrace them.

BRAND WEB DIRECT

Our innovative, multi-channel campaigns drive high levels of seamless engagement through ongoing rich and relevant communications across all channels. We optimize direct online revenue through increasing traffic and conversion on our brand.com sites. In 2016, we made significant investments in web-based platforms, mobile sites and applications to drive our direct online business - a business imperative in the current competitive hotel environment.

INDIRECT ONLINE CONTRIBUTION

Online Travel Agencies (OTAs) remain a strong revenue source. We partner with OTAs and other third parties to increase reach and system contribution to total profitable revenue. And we focus on control, incremental business, connectivity and cost of acquisition.

CARLSON REZIDOR INFLUENCED BUSINESS

We have realigned our sales resources to drive total profitable revenue, while delivering a clear and consistent message across our brands. This 2016 initiative has had very positive results. These included putting a strong focus on Meetings and Events – ensuring it remains a major business focal point, providing a steady revenue stream.

We implemented a leisure strategy focused on the continued shift from offline to online and from static to dynamic rates, aligning to the Indirect Online Contribution objectives.

And our loyalty program remained a priority in 2016. We delivered Club Carlson benefits and recognition - consistently and appropriately - to drive program growth and awareness. We also developed a specific loyalty program for business partners and small/medium-sized enterprises.

BUSINESS ANALYTICS

Analytics are an integral component of our strategy. We continue the migration from data analytics to business analytics. This will enable us to better analyze performance; identify potential opportunities and/or challenge, and evaluate the related activities and solutions - ensuring the right decisions are made to drive total profitable revenue.

WHEEL

System Contribution is the profitable total revenue generated via the central reservation system (direct and indirect online, global distribution systems (GDS) and contact centers) plus hotel direct reservations linked to a global or national account (including corporate, leisure, groups and crew) or the Club Carlson Loyalty Program.

Meetings, Incentives, Conferences and Events (MICE) are a crucial part of Rezidor’s business. And, despite fierce competition, we continued to see great growth opportunities in this important market segment during 2016.

We introduced a range of initiatives to enhance our M&E website - and to develop our engagement with direct/indirect M&E booking channels/other revenue generation resources, all designed to drive business and engagement with Club Carlson members.

Rezidor offers M&E planners many unique advantages, including a world-class portfolio of great hotels and locations. Our industry-leading,free, high-speed Internet access for all, since 2005, made us a innovative leader and a preferred business partner. And our innovative service concepts – Experience Meetings and Smart Meetings & Events, plus Brain Food and Smart Food – all delivered with our unique service attitude, make us an undisputed MICE leader.

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CAPTURE ONLINE BUSINESS

LEVERAGE LOYALTY & ENGAGEMENT

Engaging, relevant, highly impactful communications are key to our success as we strive to capture more of the ever-growing online business market. All of our 2016 Revenue Generating activities were based on unlocking potential key feeder markets and leveraging cross-selling opportunities across 80+ countries.

We made significant investments in our technology to offer the “one & only” digital platform - bringing our customers and hotels together. Focused on being mobile first, our digital strategy aims to increase the volume of visitors and bookers to our brand sites, while inspiring more guests to book additional adventures with our restaurants, bars, spas, meetings and events.

REVGEN PRIORITIES

The key to driving online business is simple. Everything we do, and the way we do it, reflects our passionate belief that the Customer Experience sits at the very heart of our RevGen wheel and our business priorities. Customers are “mobile;” brands are not…yet!

We must be where our customers are. So Rezidor’s 2016 Customer Relationship Management (CRM) plan focused on personalized marketing, personalized content, personalized offers, personalized communication and personalized rewards. We engage with our customers every step of the way: from pre-booking to staying to post-stay and return-stay.

"Travel and tourism ranks amongst the most exciting and dynamic economic sectors in the world. Over the next 10 years, WTTC predicts the global Travel and Tourism GDP will grow by an average of 3.8% a year, directly and indirectly. Its GDP contribution to the world's economy will rise to 10.5%. And by 2025, it will account for 10.7% of the world's employment. This is great news for an international player like Carlson Rezidor! With our global portfolio, world-class hotel brands and the best Yes I Can! team delivering memorable moments to our guests worldwide, we are very confident that our commercial strategy will capture all future possibilities for driving revenue and building loyalty."

Eric De NeefExecutive Vice President & Chief Commercial Officer

Loyalty counts above everything! This is our passionate belief. Loyalty is the key catalyst for purpose, people and profits. But industry experts warn that without a great experience, loyalty programs are becoming less valuable to the modern customer. Loyalty is an emotion, not a transaction. Positive customer engagement has never been more important than it is today, or had a bigger impact on our bottom line. And the increasing expectation of customers is not a passing fad; everything needs to be better and faster with Generation Now.

People remain at the very center of all our business success in our increasingly digital world. So, the ways in which we engage with, serve and empower them are key to our future RevGen growth.

Rezidor is steadily aligning our strategy across all markets to communicate our brand value propositions and corporate news – consistently across all channels and to a dedicated pool of influencers and social hand-raisers. We know that by inspiring global influencers, supporters and customers to share our stories, we can strengthen our reputation and drive profits, making a positive impact on the communities in which we operate - and on the industry itself.

Loyalty is embedded into our unique Yes I Can! service culture. Loyalty is personal. So, we must ensure that we connect with all our stakeholders in the most meaningful, credible and personal manner.

Our globally recognized Club Carlson loyalty program has nearly doubled in size over the last

three years, with more than 15 million members - 3.1 million in EMEA alone. Of those, 38 percent are active and account for 23 percent of the total room revenue. Club Carlson provides a crucial base through which we can communicate with customers and continue building loyalty for our brands and hotels.

To achieve our goals, it is essential that we really LISTEN to our customers, gathering relevant feedback and data. This actionable information is a vital tool that helps us define the future of our customer engagement strategy and activities.

But customers are more than just digital feedback. They’re real people. And we believe that by capturing, studying and better understanding the emotions that drive their responses and booking choices, we can offer an outstanding hospitality experience that will win their loyalty for life.