A RESPONSIBLE AND SUSTAINABLE COMPANY

RESPONSIBLE COMMITMENT PLAN 2017-2019

NH Hotel Group carries out its hotel activity by creating shared value at the economic, social and environmental level wherever it is present. In 2017, with the aim of leading responsible commitment in the industry, it has drawn up the Corporate Responsibility Strategic Plan 2017-2019, establishing the main objectives and  initiatives for the different responsible commitments defined by the Company.

The innovative “Room 4” concept encompasses these goals related to the business of NH Hotel Group and its key stakeholders. This transversal three-year plan has been approved by the Company’s principal governing bodies and all the areas of the Company are committed to it.

On one hand and as starting point for the creation of the Plan, the materiality analysis has been used to determine the key aspects for NH Hotel Group according to its strategy and stakeholders and, on the other hand, the Corporate Responsibility Policy. The United Nations Sustainable Development Goals (SDG) have also been used.

The Plan, a key part of the Company’s global strategy, includes its main commitments regarding responsibility, as well as the development of the lines of action in priority areas for the Company: commercial, employee engagement, investment, brand purpose, corporate governance and supplier evaluation. It also provides for
annual reporting of the Plan’s progress, both consolidated and by Business Unit, to the Board and the Management Committee.

PURPOSE, PILLARS AND COMMITMENTS OF THE PLAN

NH Hotel Group has defined a clear purpose for its Responsible Commtiment Plan which is that: Wherever we are, we strive to have the most positive economic, social and environmental impact. The Responsible Commitment Plan comprises three pillars of action: People, Planet and Responsible Business.

• Employees: promote a responsible culture that integrates Corporate Social Responsibility and the purpose in its daily actions.
• Customers: offer an excellent service and an innovative offer and involve them in NH Hotel Group’s responsible projects.
• Community: promote social projects in the communities where the Company is present and promote positive local impact through the creation of responsible alliances with foundations and NGOs, the collaboration of employees as volunteers in responsible projects and the support to culture through patronage initiatives, among others.

In its commitment to the Planet, NH Hotel Group works to minimize its impact on climate change, increase efficiency of resources and develop more sustainable products. All this by reducing the Company’s carbon footprint with responsible consumption of natural resources.

NH Hotel Group manages its operations and hotel service based on a responsible value chain, dialogue with its stakeholders, promoting responsible alliances and a strong ethical commitment.

ORGANIZATON AND MANAGEMENT

To achieve the goals set out in the Responsible Business Plan, in 2017, a management system has been established at a Corporate level and in coordination with the Business Units, that will make the implementation and monitoring of the responsible commitments defined possible.

This approach also contains a communication plan for the visibility of the actions carried out; an organization structure that drives the actions with main players throughout the Company; and a leadership team to monitor compliance of the key indicators.

PEOPLE: EMPLOYEES

NH Hotel Group takes care of its employees and seeks their commitment to and engagement with the Company’s Corporate Responsibility so that it is an integral part of their daily activities. It does this through fluid communication and by recognizing their responsible commitment.

Corporate culture is a key factor in NH Hotel Group’s global strategy. For this reason, dialogue with employees is based on fluid communications. The Company encourages employees to invest in their professional development in a diverse environment and with equal opportunities.

Under the premise “our shared beliefs and therefore, our behaviours, define who we are”, NH Hotel Group has laid down the foundations of its internal culture with the aim of helping to achieve the goals of the three-year Strategic Plan by promoting a change towards a leadership model.

This culture establishes the foundations and the support to adapt to current market needs, which require a focus on customers and a strong technological and service transformation.

THE HUMAN RESOURCES STRATEGY

This year, within the framework of the Company’s Strategic Plan 2017-2019, the Human Resources strategy has continued based on 3 main pillars:

GLOBAL LEADERSHIP AND TALENT MANAGEMENT

Preserving the Company’s future by involving the best employees and by identifying and developing the most talented people in NH Hotel Group using competitive tools and mechanisms to guarantee talent retention and commitment.

TOP PERFORMANCE AND BEST PLACE TO WORK

Becoming a company that is recognized as the Best Place to Work, based on the high level of commitment of its employees, its active contribution to achieve this, rigour to differentiate and recognize high performance and increasing its recognition as an attractive employer.

TRANSFORMATION AND REINVENTION

Seeking, evaluating and taking opportunities to be more efficient (outsourcing, digitalization, …), evolving our working environment and acquiring advanced predictive analytical skills. All the above should be based on and firmly guarantee Operational Excellence in Human Resources and Internal Communication, with clear policies and processes, fulfilling promises in a proactive manner, continuing to support, develop and implement NH Hotel Group’s operational model while controlling staff costs and related budget items.

EMPLOYEES BY BUSINESS UNIT

BUSINESS UNITS	2017	2016	Diff. (%)
HQ and CRO	466	478	-2,6%
BU Central Europe	6.751	6.667	1,3%
BU South Europe	8.095	7.999	1,2%
BU America	7.477	5.761	29,8%
TOTAL	22.789	20.905	9,0%

• Figures obtained of FTEs (Full Time Equivalents) for all kind of contracts (open-ended, temporary, extra, temping agency…) considering owned, managed and franchise hotels.
• The average number of employees in 2017 is 22,789
• The Northern and Southern Europe Business Units slightly increased the average number of employees in line with the increase in occupancy.
• Corporate offices decreased the number of employees as part of the efficiency improvement plan of the New Operating Model.
• The increase in America is due to the change in the calculation method in resorts in the Dominican Republic and the opening of new hotels.

TRAINING AND TALENT: NH TALENT

NH Talent is the NH Hotel Group’s platform for the integrated management of the professional development of each of the Company’s employees with the aim of fostering a talent management culture. Through this platform, all employees control their face-to-face or online training, see their annual performance assessments, manage their objectives and create action plans.

PERFORMANCE MANAGEMENT SYSTEM - TIME FOR YOU (TFY)

NH Hotel Group’s performance management system, Time For You (TFY), is aimed at permanent employees who have been with the Company for at least 3 months. The launch of the performance management campaign is carried out through the NH Talent platform at the end of the year and the results are analysed around February of the following year.

In 2017, the level of participation in the TFY process was 96%, slightly higher than in the previous year.

The increase in the number of assessments carried out in America is worth noting. For the first time, the regions of Colombia and Ecuador participated in the process through NH Talent, reaching a participation of 99%. The Central Europe region, which now belongs to the Northern Europe Business Unit, took part in the process for a second time in 2017 with an increase of 5% in its participation level. The other Business Units show the same participation levels as in 2016.

Furthermore, in 2017 a new pilot performance management model (New Time For You, NTFY) has been developed and implemented in the Corporate Offices and in several hotels of each Business Unit. This new TFY has been designed to facilitate the employee’s feedback conversation and their development.

Furthermore, to improve the quality of the action plans, a library of development actions has been included in the tool and the steps needed to complete the process have been simplified for greater ease of use.

Following this pilot, feedback will be gathered from the employees and managers who have participated and the necessary elements will be adjusted to extend NTFY to the entire company during 2018.

360° ASSESSMENT PROCESS

The 360° assessment process is part of the “Global Leadership and Talent Management” strategic pillar and all hotel managers and assistant managers at global level take part in it. At the end of 2017, the 2 nd edition of the process was launched with the purpose of measuring evolution in the development of these key business positions. One of the improvements of this edition is that participants will receive a workbook showing their individual results compared to those obtained two years ago, which will increase their self-knowledge and allow them to work, together with their supervisor on a new individual development plan.

This year more than 300 hotel managers and assistant managers have participated and a very high level of participation has been reached. Hence more than 90% of the personnel evaluated have managed to complete the feedback from all points of view (self-assessment, manager, peers and teams).

ENGAGEMENT AND INTERNAL COMMUNICATION

In 2017 NH Hotel Group has continued to work on its “Engagement Plan”, set up in 2015 with the aim of strengthening employee commitment with the Company’s strategy.

Since the results of the Engagement Survey were published in 2016, the teams responsible for encouraging engagement at each workplace have carried out action plans for the purpose of improving the work climate.

The main actions implemented at hotel level were:

• Communication. Communication has been encouraged through different formats such as newsletters, magazines and notice boards that give employees access to relevant information of the Company.
• Internal Relations. The frequency and scope of formal meetings to improve interdepartmental relations has been reviewed. Initiatives have also been proposed with the aim of bringing management closer to the employees and to foster relations between them.
• Employee development. To encourage employee development in their own jobs, internal and interdepartmental training has been encouraged. In this way, NH Hotel Group seeks to promote the operational overview of the entire team while at the same time acquiring new knowledge and skills.
• Corporate Social Responsibility. During 2017, a number of different social volunteering initiatives and environmental actions related to savings in resources and recycling took place.

 In the Corporate offices, the Engagement Team presented at the end of the year a new wave of measures validated by the Management Committee, notable among which is a professional immersion plan for the different corporate business areas. Employees will apply to vacancies in the departments they are interested in for the purpose of carrying out different duties on a part-time basis and for a limited time.

With this measure, NH Hotel Group wants to offer its employees the possibility of exploring new job opportunities, develop new skills and knowledge of other departments, facilitate exchange between areas, strengthen the “lead your own development” culture and identify talent within the Company.

These and other initiatives will continue their implementation and will be evaluated in the Engagement Survey 2018, which will serve to evaluate the engagement levels of the Company’s employees.

LAUNCH OF A NEW RESPONSIVE VERSION OF NH CAREERS

In 2017, NH Hotel Group has relaunched E-preselec, the tool for the publication of internal and external vacancies and for managing the job applications received through the Company’s employment portal, NH Careers. This update has made it possible to modernise the platform and facilitate access to job offers.

Furthermore, the platform now allows candidates to send their CV from any device, as it is a responsive tool which adapts to different mobile devices. An internal communication campaign was launched to publicise this change and also the new image of the Company’s internal job portal, NH Careers.

MEMORABLE DATES

All Business Units have continued to hold events and present awards to employees of hotels and central offices on their most important anniversaries, retirement and other special dates. In 2017, Benelux joined the programme, showing that Memorable Dates is becoming consolidated as part of the Company’s culture in all the countries where it is present.

INTERNAL COMMUNICATION PLAN

For NH Hotel Group, Internal Communication is a key factor in creating and maintaining the commitment among the Company’s employees. For this reason, in 2017 it has continued developing the Internal Communication Plan 2015-2017, where the role of new technologies has been key to accomplish the ambitious goal of reaching all of the Company’s employees.

MyNH app
This is an exclusive app for the Company’s employees, launched in June 2017 which lets employees view the latest news, campaigns, projects and internal vacancies, among others. It also provides access to the intranet and to an internal chat for the hotels. For its launch, an information campaign was carried out with posters and promotional videos in 6 languages; These material also contained a QR code through which to download the App in iOS and Android. So far, close to 3,000 employee downloads have been registered.

Tell The World
The Internal Communication Plan has continued to focus on the digital strategy applied to all its environments and channels. An example is the evolution of the internal communication channel ‘Tell the World’ which, in 2017, has upgraded to 3.0 environments.

Thus, the Company’s employees now have the opportunity to share their favourite items from the internal newsletters on their personal social media. In this regard, 135 editions of the Tell the World newsletter were published in 2017 in four languages, receiving 42,402 hits.

Town Halls
These innovative conferences, which aim to share the most relevant milestones and initiatives of the Group with all employees, reaffirm the Senior Management’s commitment to the Company’s communication.

In 2017, the CEO of NH Hotel Group, Ramón Aragonés, together with the Management Committee, led a total of 4 of these conferences, which could also be followed by live streaming on the platform.

Change Management Projects Internal Communication is a tool that acts as a catalyst for change in the transformation of NH Hotel Group, as it defines a strategic action plan. In 2017, 9 editions and 10 videos were published to consolidate the ‘Transformation Commitment’, the internal communication channel designed for regularly sharing the progress, achievements and success stories featuring employees.

CORPORATE EMPLOYER BRANDING CAMPAIGN

Through its Employer Branding campaign, NH Hotel Group has moved from working on its internal engagement to also communicating its role as employer brand to different audiences and external stakeholders.

The Group’s key employer brand values are: Passion, Challenge and 100% People. The medium-term communication campaign features a group of ten employees selected from all the Business Units as examples of those values.

With this campaign, NH Hotel Group has initiated its digital marketing plan on social media such as LinkedIn and Twitter and has launched NH Hotel Group’s profile on Instagram. All this has been the result of teamwork involving Human Resources, Marketing, Social Media and Communication.

The KPIs of the campaign are measured every month to analyse the evolution and results of the different actions with the aim of implementing the necessary changes throughout 2018.

1.212.760,97€ TOTAL INVESTMENT IN TRAINING IN 2017

113.554 TRAINING HOURS COMPLETED (PRESENCIAL Y e-LEARNING)

26.484 TOTAL PARTICIPANTS IN NH UNIVERSITY

74% INCREASE IN ONLINE TRAINING ​COMPARED TO 2016

KEY TRAINING PROJECTS IN 2017

Corporate Projects

• HUNTING FOR NEW BUSINESS SKILLS

In 2017, two courses of this nature were provided for the Remote Sales and Sales teams, with the participation of a total of 63 employees from all of the Company’s Business Units. This initiative is included in the Corporate Training Plan as part of the “New Incremental Profitable Business” sales strategy and is focused on developing sales employees’ skills in attracting customers, such as influence, negotiation or closing, as well as offering tools that can help their development. In 2018, the 22 in-house trainers who gave the courses will transmit the knowledge acquired to the rest of the team and to new employees.

•  FEEL THE EXTRAORDINARY-BE PART OF IT

This new training initiative is aimed at employees of the Collection brand with the aim of introducing them to the key elements that make up the brand and the importance of conveying them to the customer. To this end, NH University has created the game “Feel The Extraordinary-Be Part of It” in which teams of employees have to overcome challenges related to the brand’s elements. In each hotel, the winning team will become the Brand Champion, receiving a prize and the chance for international recognition among the teams from all the hotels.

• UPSELLING: ENHANCE YOUR STAY

A new e-learning course has been developed and implemented in 2017 to introduce upselling and its role in NH Hotel Group, aimed at all the Company’s employees but especially the Front Office departments.

America Business Unit projects

• TOPIC EXPERTS PROGRAMME

The most noteworthy project of the America Business Unit in 2017 was Topic Experts, an initiative that was executed in most Front Office, Food & Beverage and Maintenance operational areas in which employees who are experts in these areas transmitted their knowledge to ensure uniformity in the Company’s standards.

Spain Projects

• RECEPTION DEPARTMENT GATHERING

More than 800 receptionists from the hotels in Spain, Portugal and Andorra met to exchange good practice, align their knowledge and, in short, share a motivating and instructive experience concerning their influence on the customer experience. In this way, with a website designed especially for them and a careful selection of speakers aligned with the objectives of NH Hotel Group, matters such as the way the hotel business works, the importance of communication and the commitment to the Company were discussed.

• MENTAR PROGRAMME

This mentoring programme seeks to generate a learning relationship between mentor and mentee where shared learning becomes a tool for transformation and an end in itself. For NH Group Hotel, mentoring allows the mentee to direct his or her development, guided by the experience of a mentor and with the NH Culture as the focal point. The mentees are heads of hotel departments or employees of Central Services with experience in operational teams and/or management who have undergone the selection process.

The mentors are the BU Managers who voluntarily wish to be part of the programme and meet the established requisites. With this programme, which is in its second year in 2017-2018, the Company seeks to identify talent and be able to prepare future hotel managers, in both technical and skill aspects.

Italy Projects

• 2017 NEW HOD

This Career Development Programme allows Operations employees with high potential to participate in a six-month training in technical and soft skills with the aim of preparing new talents to be successors as future heads of Department.

• STORYTELLING

In 2017 a storytelling course was imparted in Italy for the entire sales team of the country for the purpose of obtaining knowledge and confidence in storytelling skills applied to sales in order to improve communication of NH Hotel Group’s value proposition.

• 5 STARS. A STEP FURTHER IN TRAINING

Aimed at the General Managers and the teams who work at hotels that are immersed in a transition process from four to five stars. In 2017 NH Group Hotel offered this training to the staff of the NH Collection President and the NH Collection Firenze Porta Rossa. This way, the employees were able to put the new behaviours and attitudes into practice and become familiar with the standards required by the change of category of their establishment.

• THE BELL CHALLENGE

Through a gamification experience, this initiative allowed the Front Office and Guest Relations teams to improve their commitment to the Company. To this end, a specific web portal has been designed through which employees can play - individually or by challenging other co-workers - a 2-minute trivia game on procedures and standards, transformation plan, operational promises and NH Rewards.

Central Europe Projects

• NHU4 – DAY TO STAY
This event was designed for the countries “Azubis” and “Dualis”, trainees who have worked for three years at NH Hotel Group hotels while simultaneously doing other studies. The purpose was to show NH Hotel Group’s intention to keep good trainees, offering them prospects for the future by organizing quick appointments with General Managers and other departments, as well as by giving them suggestions on applications and asking for their feedback on what can be improved in NH. As a result of this event, 50% of participants stayed with NH Hotel Group.

• AZUBI WELCOME DAY
In its second edition, the welcome event for all Azubis and Dualis in which NH Hotel Group is presented and a series of interviews with different heads of departments and General Managers are offered, included new features such as the recording of a song in German with the Azubis, a workshop on hotel tasks and a competition involving the recently learned skills.

Benelux Projects

• 24 HOUR HACKATHON
As part of NH Hotel Group’s development programmes, 29 JUMP and PDI participants attended an intense training course at the Design Thinking Center in Amsterdam. During this 24-hour hackathon, the Design Thinking Method was used to formulate a design challenge to which a solution had to be presented 24 hours later. Participants were divided into 5 groups that had to think about the current problems they face within the Company and find the solution. At the end of the day, each group generated 100 ideas and the best idea from each group was presented to a panel of experts.

EMPLOYEE TURNOVER AND ABSENTEEISM

TURNOVER 2017

	NON VOLUNTARY			VOLUNTARY			TOTAL
BUSINESS UNIT	FEMALE	MALE	TOTAL	FEMALE	MALE	TOTAL
HQ and CRO	7,39%	6,45%	13,84%	7,53%	5,38%	12,90%	26,75%
BU North Europe	3,49%	3,73%	7,22%	6,51%	5,19%	11,70%	18,92%
BU South Europe	9,43%	7,90%	17,33%	1,75%	2,18%	3,93%	21,26%
BU America	11,84%	13,82%	25,66%	3,33%	3,33%	6,66%	32,32%
TOTAL	7,29%	6,94%	14,22%	4,05%	3,64%	7,69%	21,91%

Rotación Anual considerados hoteles en propiedad, gestión y franquicia.
No incluye la rotación asociada a Hoteles Royal, Rep. Dominicana y Venezuela.

TURNOVER OF EMPLOYEES UNDER INDEFINITE CONTRACTS

Regarding the turnover indicator, it should be noted that due to the characteristics of the hotel business, NH Hotel Group considers it relevant to know and manage the turnover of employees under indefinite contracts. The table below shows the results obtained in 2017 with respect to such employees:

	NON VOLUNTARY			VOLUNTARY			TOTAL
BUSINESS UNIT	FEMALE	MALE	TOTAL	FEMALE	MALE	TOTAL
HQ and CRO	2,33%	3,31%	5,64%	5,45%	3,11%	8,56%	14,20%
BU North Europe	1,20%	1,73%	2,93%	4,80%	4,01%	8,82%	11,75%
BU South Europe	1,88%	1,29%	3,17%	1,19%	1,61%	2,79%	5,96%
BU America	5,70%	6,47%	12,18%	3,70%	3,85%	7,55%	19,73%
TOTAL	2,19%	2,28%	4,48%	3,08%	2,90%	5,98%	10,46%

Rotación Anual para empleados fijos considerados hoteles en propiedad, gestión y franquicia.
No incluye la rotación asociada a Hoteles Royal, Rep. Dominicana y Venezuela. 

ABSENTEEISM RATES

ABSENTEEISM RATES	2017 (%)	2016 (%)
Accident	0,13	0,17
Illness	2,27	2,54
Maternity	0,63	0,43
Total absenteeism	3,03	3,14

*Figures refer to permanent and temporary employees

WORKERS’ RIGHTS AND BASICAGREEMENTS

THE WORK OF THE EUROPEAN WORKS COUNCIL IN 2017

NH Hotel Group seeks to maintain responsible and positive employment relations based on the principles of dialogue, consultation and employee participation. That is why, in October 2015, the European Works Council (EWC) of NH Hotel Group was created as an initiative of the Company’s international European employers association (EFFAT), at the request of the affiliates of Italy, Belgium and Spain.

The EWC covers all the Company’s work places within the European Economic Area and is compliant with the provisions of Directive 2009/38/EC, as well as its transposition into the Spanish legislation. Its main goal is to establish a communication and social dialogue level that fosters mutual understanding on transnational issues affecting employees in a climate of mutual trust.

Two meetings of the EWC were held in 2017, one full meeting at which all members were present and another meeting of the committee of a restricted nature. At these meetings, the posts on the Committee were updated, the Company’s economic results were presented and brief reference to the impact of the terrorist attack in Barcelona was made at the meeting in September. The new structure of Business Units in Europe was also explained and it was agreed to create working groups to deal with specific matters.

TRADE UNION REPRESENTATION

NH Hotel Group employees covered by collective agreements are detailed below:

LABOR RELATIONS

BUSINESS UNIT	NO. OF COLLECTIVE AGREEMENTS 2017	PERCENTAGE OF EMPLOYEES COVERED
Southern Europe Business Unit (Spain, Italy, Portugal, France & USA)	51	100%
Northern Europe Business Unit (Benelux, Central Europe, UK and Africa)	21	97%
America Business Unit	20	47%

PEOPLE: CUSTOMERS

NH Hotel Group provides an excellent service and an innovative offer, and invites its customers to participate and get involved in ethical, social and environmental commitments.

EXPERIENCIA NH

In the 2017-2019 Strategy, NH Hotel Group has identified the need to define a clear segmentation of its brand, believing in its intrinsic value. It therefore seeks to pursue maximum efficiency in media investments and an improvement in the customer experience with the development of the Guest Intelligence virtuous circle, detecting the “moment of truth” and providing support to a redesign and implementation experience and Acceptance Monitoring.

In recent years, as a result of the Company’s new business strategy, the quality bases that characterize NH Hotel Group were laid down. In 2014 the operational promises of NH Collection, NH Hotels, nhow and NH Meetings were consolidated while in 2015 the Company continued to successfully implement the product and service standards established for each one of the brands, following their respective roadmaps and the guarantee that they would contribute a sound added value and a new experience.

In 2016 and 2017, the improvements in innovation and in the NH experience have been consolidated, with the aim of extending the products and services offered for each of the brands.

BRILLIANT BASICS

In 2017, 1.77 million euros were allocated to this project to continue improving the Company’s quality and comfort standards. Since 2014, a total of 261 hotels have participated in the initiative, reaching totals in 2017 of 37,000 beds replaced, 32,500 television sets, 35,000 rain-effect showers, 24,000 duvets, 105,000 pillows and 16,500 professional hairdryers.

In addition, 1.47 million euros were allocated to Brilliant Basics for Meetings and Events (M&E), a project that seeks to ensure the best experience for customers who use the meeting rooms in hotels.

GASTRONOMIC INNOVATION

NH Hotel Group is committed to offering high quality gastronomy and the latest trends within the sector to its customers. In this regard, the Company is continuously innovating and developing exclusive gastronomic standards and processes.

Furthermore, processes are continuously being implemented that combine local and global values that will serve to enrich the services offered to customers.

Some of these processes that have been consolidated at company level during the past year are:

• M&E Tempting breaks, which includes the Healthy Corner and the Sweets Corner
• Minibar, with new products to elevate quality
• Breakfast Juice Corner, with healthy shakes and freshly made juices upon request
• Memorable Element, which offers a new and surprising juice every day
• Regional Corner, which offers local products

During 2017, NH Hotel Group has once again renewed the Company’s best-known restaurant service: its breakfast, promoting its values in familiarity and the use of local products.

As a result, the Company’s breakfasts include a wide variety of products and a wide assortment that combines local and global values, offering more than 110 different products on a daily basis. Not forgetting the importance of healthy and sustainable food, the Company includes gluten free, organic, low-sugar, low saturated and no trans-fat products.

The Company also favours high-quality products (oils, salts, cured meats…), artisanal products (gourmet pastries, organic yoghurts, …) and personalized customer care and service. An example is the relaunch in 2017 of the Kids Corner, where with the help of the fictional characters Nico and Hanna, NH Hotel Group wants to promote the importance of a balanced diet featuring healthy and nutritious foods among its youngest guests.

Haute cuisine is also part of NH Hotel Group, which has a total of 10 Michelin stars among its gastronomic options with the following culinary ambassadors:

• Dabiz Muñoz, 3 Michelin stars with DiverXO at NH Collection Eurobuilding
• Paco Roncero, 2 Michelin stars with La Terraza del Casino
• Oscar Velasco, 2 Michelin stars with Santceloni at Hesperia Madrid
• Miguel Barrera, 1 Michelin star with Re Levante at NH Mindoro
• Chris Naylor, 1 Michelin star with Vermeer at NH Collection Barbizon Palace
• Jacob Jan Boerma, 1 Michelin star with White Room at NH Collection Grand Hotel Krasnapolsky, achieved in 2017.

It should also be noted that the Company has developed in 2017 its own proposals and projects for the Group’s restaurants and bars in order to improve the Company’s value and service proposition, such as Tablafina (Gastrobar), Kukuarri (Restaurant) or Suite & Tea (Gourmet Cafeteria).

PERFECT FIT

In 2017, this project has reached a total of 143 gyms which now have state-of-the-art machinery and facilities adapted to the new Perfect Fit standard. With a view to the future, new openings with an area set aside for a gym will in all cases have the equipment and services defined as standard for the Company, in addition to
the refurbishments that will be undertaken.

ONLINE CHECK-IN, CHOOSE YOUR ROOM AND ONLINE CHECKOUT

Throughout 2018, the implementation of the online check-in, choose your room and online check-out projects will be completed. Since 2016, check-in and check-out processes have been reviewed to obtain maximum efficiencies and adapt them to the new digital reality.

Thanks to the online check-in service, from September 2018, customers will be able to complete the procedure digitally 48 hours before arrival and benefit from the “choose your room” function which will allow guests to select their room preferences and choose the room they want to stay in directly on the hotel’s floor plan.

The incorporation of online check-out, after a successful pilot that has been undertaken in 2017, is also being planned for 2018.

This service which will give guests the opportunity to check out without having to queue at reception, by completing the entire process online the night before they leave and receiving their bills quickly and conveniently by e-mail. With this, NH Hotel Group seeks to position itself as a leader in the industry and become one of the first hotel chains to simultaneously offer the three services mentioned above.

ENHANCED WI-FI

True to its high quality standards, in 2017 the Company has improved its Wi-Fi connectivity services by extending lines, allowing it to offer double bandwidth at NH Hotels brand establishments and four times faster connection speed at NH Collection hotels. The bandwidth for premium connection in both brands has also been multiplied by four.

VIP DETAILS

During 2017, the implementation of standards aimed at very special guests has continued. New VIP details have been designed and produced for the different NH Hotel Group brands.

STATE-OF-THE-ART TECHNOLOGY AT NH MEETINGS

The creation of memorable and inspiring events is part of the NH Experience, offering innovative technologies such as the Instant Booking Tool, a pioneering platform in online booking and payment of meeting venues or rooms for groups, with real-time availability consultation, selection of equipment, F&B and other services; the SMART Room System™ for Microsoft® Lync® Online state-of-the-art video conferencing technology; or the use of holographic technology for holding all kind of events.

Singular venues. Unique and inspiring places

As part of NH Meetings proposal, the Company has developed original and uniquely special areas for guests to celebrate all kinds of occasions. These singular venues can adapt to the needs of each company, allowing planners to develop their ideas for business meetings, conferences and other types of events to be played out in the most appropriate environment.

These venues are outlined by four specific concepts:

• Design: Stunning architecture and gorgeous interiors designed to bring people together and share unique local experiences, enjoy the functional convenience of singular meeting spaces and relax with personalized professional service.
• Location: Elegant locations and breath-taking views that create striking first impressions, whether close to famous landmarks or off-the-beaten track, the perfect stage is set with attendees in eager anticipation.
• Technology: Gravity defying transparent curved displays, ground-breaking 3D holographic projections and productive SMART Room System™ communications that captivate audiences, empowering spaces and making dream events a reality.
• Uniqueness: All of our singular venues are extraordinary places where singular experiences are an everyday occurrence thanks to eye-catching locations, magnificent views, historical backdrops, surprising exteriors, fully adaptable interiors and professional expert staff.

These are some of our Singular Venues:

• NH Collection Firenze Porta Rossa: Italy’s oldest surviving hotel, located in the heart of stunning Florence, fuses old-world charm with modern-day furnishings, complete with frescoes ancient and a panoramic suite within a 13th-century tower.
• NH Collection Amsterdam Grand Hotel Krasnapolsky: Downtown Amsterdam, overlooking the impressive Dam square, is where you’ll find our Wintergarden: a listed location natural light, afforded by its magnificent glass ceiling, black and white marble floor and full palm tree, floods in through 19th century architecture. Fittingly described as “unique in nature: modern with a classic twist”.
• NH Collection Barcelona Tower: Offering three incredible spaces from the center of beautiful Barcelona, The Millenium Auditorium, the Great Cosmos Room and The Dome offer a variety of uniqueness under one roof, jam packed with the latest in communication and visual technology. Highly effectiveness with added ‘wow’!

FAMILIES, WELCOME

The “Families, Welcome” project has been launched in 2017, which consists on the implementation of an operational promise especially designed to improve the experience of the smallest guests and make NH Hotel Group the most welcoming chain for families.

The implementation of this project includes numerous initiatives such as the design of a space within breakfast rooms, the Kids Corner, which offers a unique selection of products for children’s breakfast, together with fun tableware and activity books featuring the Group’s youngest ambassadors: Nico & Hanna.

Some of our “Families, Welcome” hotels are also pioneers in family rooms. These are more spacious than standard rooms, offer Nico & Hanna bath amenities for children and have a special room service.

All “Families, Welcome” hotels also have television channels for the whole family available to guests and offer early Check-in and late Check-out services free of charge.

Outside of the hotel, no matter the destination, city, coast or beach, the new family assistant knows all the best leisure activities for the whole family and the best restaurants to go to with children.

QUALITY MANAGEMENT SYSTEM

Our culture to improve the customer experience
With the implementation of different projects in 2017 and thanks to the Company’s Integral Quality Management system, perceived quality ratings among NH Hotel Group customers have maintained the trend shown in 2016. These results come from a customer-focused culture of change which adapts rapidly to the variable
needs of the market.

In addition, to foster the Company’s culture among employees, a specific section entitled “Quality Corner” has been incorporated into the newsletters to share best practices and experiences of employees in their dealings with customers.

Evolution of quality measurement tools in 2017
An essential part of the customer experience continuous improvement process is monitoring perceived quality and the action plans that have been put in place. A significant example of a measurement tool is the “Quality Focus Online” that makes it possible to monitor customer reviews through internal and online channels.

Notable among the main improvements of the tool in 2017 is the inclusion of comments on the Company on Google which can also be responded to by the hotels through the tool, the introduction of a QPI evaluation graph (ratio compared to competitors) and the extension of accesses to Quality Focus.

Impact on visibility and perception of Quality
The overall perception of the Company’s quality has remained stable compared to last year, with a score of 8.4 underpinned mainly by the growth in online channels. These results have driven the Company’s visibility, with particular impact on TripAdvisor where many more NH Hotel Group hotels have managed to position themselves among the best in their cities.

Thus, a total of 157 of the Company’s hotels were on the first page of the prestigious website at the end of the year, seven more than in 2016. These figures mean that 55% of the portfolio in cities with more than 20 hotels have a first-page position.

In turn, NH Collection continues to consolidate its success in terms of customer rating, quality perception and visibility. The hotels of this brand have managed to obtain an average rating of 8.9 between the Company’s internal surveys and online ratings, while 45% are positioned in the Top 10 on TripAdvisor, and 63% have first-page placings which once again makes them the Company’s best reference in 2017.

Other quality management instruments

With the purpose of maintaining the Company’s high standards in relation to quality and customer satisfaction, quality managers in each Business Unit of NH Hotel Group visit almost all the hotels, mainly those where areas for improvement have been previously identified, in order to activate the necessary corrective actions.
Furthermore, in 2017 a new internal classification has been defined to facilitate comparison between similar hotels in terms of quality to identify best practices among them and apply them within the Company.

The focus for the Customer Service Department continues to be personalization and closeness to customers. Complaints received and handled in 2017 were 28% lower than in 2016. This fall is due to the fact that refurbishments have been carried out in hotels during the year which have considerably improved amenities and services. Growth in the NH Collection brand and its implementation during 2017 have also contributed positively to this decrease.

The contact of Hotel Managers, Front Office Managers and Guest Relations with customers has increased by 10% compared to 2016, thanks to the replies of the latter to NH Hotel Group’s internal surveys done through the Quality Focus Online tool, which makes active interaction possible between hotels and their guests.

KEY QUALITY INDICATORS

Key Quality Indicatos	2016	2017	Dif.(%)
NH Survey rating(scale 1 to 10)
General	8,6	8,5	-0,1
Service	8,9	8,9	0,0
No. of NH Survey ratings	181.069	179.438	-1.631
Online rating (scale from 1 to 10)
General	8,3	8,4	0,1
Service	8,5	8,5	0,0
No. of Online NH Survey ratings	355.864	448.775	92.911
Customer Service KPIs
Communications with customers handled by hotel managers	31.114	34.100	2.986
Communications with customers handled by fCustomer Service	21.796	19.025	-2.771

RESPONSABLE GUESTS

NH Hotel Group meets its commitment to sustainability by engaging its customers and aving them take part in its CSR initiatives. To that end, some of the main initiatives are the creation of opportunities for contributing socially or the encouragement of an environmentally responsible behaviour.

An example of these inclusive actions is the UNICEF NH Rewards donations programme, which raised €2,163 in 2017. The Company also provides its guests with charging stations for electric cars and an eco-friendly service to ensure that meetings and events held in the hotels have a minimal environmental impact or even carbon-neutral.

CUSTOMER LOYALTY AND CUSTOMER SERVICE

New NH REWARDS programme

In 2017 NH Hotel Group has worked on the renewal of its loyalty programme with the aim of turning it into one of the most generous in the industry, increasing the benefits for its most loyal customers so that they perceive the added value of the new programme.

Currently, more than 8.4 million customers earn points and redeem them to get, for example free nights, room upgrades and a higher service level in the hotel depending on their membership category. NH Rewards members contribute 40% to NH Hotel Group’s revenue and their frequency of use is 33% higher than that of other customers.

In fact, in 2017 eight out of ten bookings through NH Hotel Group’s website were made by loyalty programme members.

This programme also makes it possible to establish direct contact with customers. In this regard, almost 150 million e-mails have been sent to subscribers of the Company’s global data base with an average of 27% openings and generating 7.2% of our web traffic.

To publicize NH Rewards, campaigns have been carried out to encourage customers to book through the direct channel, i.e. NH Hotel Group’s commercial website, as well as new preference-based communications, such as gastronomic newsletters, that give visibility to the restaurant portfolio. This is added to a plan that
rewards customers of the NH Rewards programme especially with exclusive points promotions and preferential access to campaigns with discounts.

Improvement in direct sales channels

The volume of business generated through NH Hotel Group’s website in 2017 has set a new record with an interannual growth rate of 11%, backed by the extraordinary results of Benelux (+18%) and America (+26%).

This growth has meant that the revenue billed through the website totalled 187 million euros, 18 million more than in 2016.

A historic record has also been achieved in relation to the web channel’s contribution to the NH Hotel Group’s revenue. Revenue per room in 2017 totalled 12.8%, which is 0.3 points higher than the rate recorded in 2016.

PEOPLE: COMMUNITY

The commitment to the communities where NH Hotel Group operates is another of the pillars of the new Corporate Responsibility Plan 2017-2019. The main goal is to maintain active relations with the community, contributing to local development and attending to the needs of each destination where it is present through its business in itself. Local impact is achieved thanks to the creation of responsible alliances with foundations and NGOs, the collaboration of employee volunteers in projects and the promotion of culture.

To this end, NH Hotel Group has established three lines of global action: Hotels with a Heart, Employment Programmes and NH Volunteers!

MAIN SOCIAL INDICATORS

	2016	2017
Total social projects	395	328
NH Volunteers	1.081	580
Contribution of NGO rates	65.593,46€	101.493€
Contribution of Bono Amigo + Employee rate	197.937,31 €	149.461€
Cultural promotion	32.750,00 €	13.000€
Amiguitos Royal Foundation	140.113 €	69.714 €
Investment in Social Action	245.130 €	109.522€
Total resources destined* to the Community	681.523 €	446.115€

HOTELS WITH A HEART

This initiative, which reached its 15th anniversary in 2017, aims to help the families of hospitalized children cover their accommodation needs through foundations and NGOs. The fact that this initiative has been going on continuously for many years is an example of NH Hotel Group’s long-term commitment to Society.

With more than 15,000 hotel nights donated, the initiative was a finalist in the “Best CSR Programme” at the 2017 Business Travel Awards. It has also received numerous local recognitions, such as the award for Best Solidarity Project in the El Mundo Zen Adecco awards.

The group of more than 2,000 employee volunteers who act as Ambassadors in the programme are a key to the success of “Hotels with a Heart”. Furthermore, the NGO rate with discounts of up to 30% off the best available rate is offered as an advantage to entities that have been previously assessed and approved by the  Corporate Social Responsibility department.

HOTELS WITH HEART	2016	2017
Agreements with NGOs	108	40
Room Nights donated	1,996	1,192
Hotels involved	81	53

CHRISTMAS CAMPAIGN “HOTELS WITH A HEART”

The 2017 Christmas campaign once again featured “Hotels with a Heart”, the Company’s international solidarity programme with the longest tradition

Thus, in 2017 some of the employees from all over the world who volunteer to participate in the initiative took centre stage to narrate their personal experiences, show how they live and what the experience of participating in the programme has meant to them. As a result, the video was the Company’s Christmas greeting to all its stakeholders and has become the most watched NH Hotel Group video on YouTube, with more than 100,000 views in Spanish.

GLOBAL AND LOCAL SOLIDARITY ALLIANCES

NH Hotel Group believes in building responsible and successful alliances with solidarity partners in order to develop stable projects that can be replicated in all of its Business Units.

In 2017 a relevant milestone has been the signing of a strategic agreement with Make-A-Wish International through which NH Hotel Group will donate almost 600 rooms in hotels across more than 15 European cities to children with serious illnesses and their families so that they can travel outside their city of origin to fulfil the child’s greatest wish. The collaboration between the two entities started in 2005 in Spain, The Netherlands and Italy, offering every facility so that children from all over the world can make their dreams come true.

In Spain, NH Madrid Sur is a supportive partner and the hotel of reference for Menudos Corazones, a foundation with whose alliance the “Hotels with a Heart” programme was launched in 2004. In Benelux and Germany, the Company collaborates with hospitals and foundations such as the Ronald McDonald Foundation, with which it also participates in programmes focused on the wellbeing of the families of sick children, providing them with a home when the foundation houses are full.

EMPLOYMENT PROGRAMMES

Throughout 2017 NH Hotel Group has carried out different international training, work experience and job programmes for young people at risk of social exclusion and disabled young people in all its Business Units. This way, the projects, which are part of the Social Action strategy, are also aligned to the Company’s commitment to Sustainable Development Goal 8 on “Decent Work & Economic Growth”.

Thus, in 2017 a total of 303 students had the opportunity to develop technical and personal skills with the direct help of volunteer employees of the hotels, who accompany, guide and instruct these young people. To multiply the impact of these employment programmes, the Company consolidates its international and local alliances which provide support and the necessary responses to the specific needs of each Business Unit.

GLOBAL AND LOCAL SOLIDARY PARTNERS

Youth Career Initiative (YCI) in the America Business Unit

Youth Career Initiative is a high-impact international initiative meant to fight against youth unemployment and NH Hotel Group is the only Spanish multinational company committed to this innovative project together with other leading hospitality companies, such as Intercontinental, Marriott and Starwood.

Every year, more than 400 young people at risk of social exclusion receive training in 53 hotels around the world.

In its tenth year, the seventh in which NH Hotel Group has taken part, the Company has offered 32 young people training courses over six months given by staff of the different hotel areas as well as work experience in the different departments. As of today, 15 of the participants have now embarked upon their careers as  collaborators of NH Hotel Group Mexico. In the first few months of 2018 the programme is expected to start in Bogotá.

Social and labour insertion in Spain

Youth unemployment in Spain, which is more significant in groups at risk of social exclusion, requires programmes focused on boosting the employability and social integration of young people.

To this end, 29 NH Hotel Group hotels in Spain have been involved in different programmes with the help of more than 85 employees who have volunteered a total of 13,043 hours to train 96 young people. In developing this programme, collaboration with various social and labour insertion programmes is vital, through which the entrance into the job market of 7 people has been achieved. The Hesperia Tower hotel in Barcelona also carries out different initiatives to favour the entrance into the labour market of young people at risk of exclusion, in collaboration with the Joia Foundation and the Casal dels Infants Foundation.

JINC “Track the Talent” in Benelux

Since 2009, NH Hotel Group and JINC have been collaborating to provide professional training to young people in the poorer districts of the country to help improve their employability. In 2017, a number of visits and workshops have been organized to NH Conference Centre Leeuwenhorst with the participation of a total of 68 young people with whom 10 employee volunteers have wanted to share their enthusiasm and experience in the hotel sector.

EMPLOYMENT PROGRAMMES	2016	2017
Students trained	651	120
Agreements with NGOs and institutions	62	61

NH VOLUNTEERS!

With the aim of promoting employee involvement in the NH Hotel Group’s social action, NH Volunteers! was created. The initiative, already an important aspect for the Company, is possible thanks to the commitment shown by its employees in the volunteering projects, where they offer their skills and knowledge to people who need them. In 2017, 570 NH Hotel Group employee volunteers have taken part in training and apprenticeship programmes for vulnerable groups.

Furthermore and in collaboration with the Exit Foundation, two editions of the Coach Project also took place in 2017. This is a corporate volunteering initiative to improve the employability of young people at risk of social exclusion through coaching and mentoring. In it, 10 employee volunteers have shown 10 young people how the business world operates, with the aim of helping them to discover their vocation and thus motivate them to continue their training.

NH VOLUNTEERS!	2016	2017
Volunteers	1.081	570
Initiatives	78	50

“CHRISTMAS FOR ALL” COMPETITION 2017

Once again, the Company has invited its employees, through the Tell The World internal communication channel, to participate in “Christmas for All”, another of NH Hotel Group’s corporate volunteering initiatives.

Participating employees created their own teams and chose an NGO to collaborate with and to whom donate the prize in case of winning the contest. On this occasion, 16 candidate projects were received from 6 different countries, and as was the case last year, the employees themselves chose the winning initiative through an online votes. This year’s winner was the Central Offices team of NH in Colombia who engaged in an activity to support children of the Amiguitos de Royal Foundation.

Thanks to the solidarity, commitment and teamwork of more than 1,000 employee volunteers, the results of this campaign have been extraordinary.

DONATION OF FURNITURE FROM REFURBISHED HOTELS

As part of the Repositioning Plan and the projects for the refurbishment of the Company’s hotels, a coordination protocol has been designed for donating withdrawn furniture, amenities and homeware products to foundations and NGOs, social institutions and persons without means. This way, in 2017 every Business Unit donated mattresses, duvets, blankets, toys, cleaning articles, sheets, towels, pillows and beds, amongst other products.

In turn, in Mexico 10 volunteers sent donations of food, clothing and shelter to the areas affected by the earthquake, benefitting 150 people. At corporate level, an emergency donation campaign was organized through the Mexican Red Cross which received great support from all employees at international level.

OTHER ACTIVITIES THAT HAVE AN IMPACT ON THE COMMUNITY

COMMITMENT TO CULTURE

NH Hotel Group consolidates its connection with art and patronage as an essential part of its commitment to culture and promotes its integration into all NH Collection hotels, with a particular focus on young artists. In line with this, the Company has organized this year the III NH Collection Award for Contemporary Art ARCO 2017, recognizing on this occasion the German artist Claudia Wieser for her work “Untitled”. The sculpture, which was on public display in the VIP Area of Madrid’s Contemporary Art Fair for its duration, has now become part of NH Hotel Group’s private collection in one of the NH Collection hotels.

Convinced of the value and importance of its relationship with the artistic world, the Company has works of contemporary art in all its NH Collection hotels.

A collection featuring notable names such as José Dávila or David Magán, winners of the first and second NH Collection Award for Contemporary Art.

“AMIGUITOS ROYAL” FOUNDATION

Amiguitos Royal Foundation is a non-profit private organization whose main purpose ch is to promote child nutrition and development from pregnancy to the age of 9 in Bogotá (Colombia).

Since the integration with Hoteles Royal, NH Hotel Group supports and backs up the significant work done by the Foundation.

In 2017, the Company has two members on the General Assembly, which is made up of a total of 14 members, and two members on the Management Board, one principal member and one substitute.

During 2017 there have been 895 beneficiaries, 545 children between 0 and 9 years of age and 350 expectant and nursing mothers.

Furthermore, since 2006 the employees of NH Hotel Group meet every year to offer the children of the Amiguitos Royal Foundation a unique Christmas. In 2017, 545 children of the Foundation celebrated Christmas with gifts from the sponsors, employee volunteers of the Company, and Christmas trees made by the same volunteers.

AMIGUITOS ROYAL* FOUNDATION
Care centres	3
Beneficiaries	545 niños y 350 madres
Employee volunteers	13
NH Hotel Group participation in General Assembly	2 miembros
NH HOTEL GROUP contribution	69.714 €
Ecology Plan	568.483 €
Operation	98 €
Employee sponsor plan	6.747 €
Royal Encounters Programme	617 €

*Figures at November 2017

PLANET

Sustainability is a cross-over enabler of value in NH Hotel Group, with 3 key commitments:

• Care of its guests
• Care for the destinations in which it is present
• Care for the planet

The Sustainability Plan has defined six key targets and, on the basis of these, the Company makes wide-reaching decisions in order to achieve the targets set.

In 2017, 4 out of the 6 sustainability targets established in the Sustainability Plan have been reached. Specifically, the targets set for the accumulated Savings Indicator, energy ratio, water ratio and average satisfaction with the hotel in terms of sustainability.

Since the beginning of the II Strategic Plan 2013-2018, with baseline in 2013, the carbon footprint per occupied room has been reduced by 35%, energy consumption by 12% and water consumption by 1.3%.

MAIN ENVIRONMENTAL INDICATORS	BASELINE 2013	ACTUAL 2015****	ACTUAL 2015****	ACTUAL 2017****	IMPROVEMENT 13 VS 17	TARGET 5YP 2017	TARGET 5YP 2018
Accumulated Savings vs. baseine 2013 (€M)***	0	2,04**	6**	3**	9,85***	9	11,55
Hotels with environmental certificates	75	126	129	132	59	146	150
Energy ratio (kWh/RN)*	53,2	51,83	51,60	49,56	-6,8%	47,39	49
Water ratio (m 3 /RN)*	0,310	0,301	0,309	0,310	+0%	0,298	0,298
Carbon footprint ratio (Kg. CO 2 /RN)*	15	6,46	6,96	6,27	-65,8%	5,50	8
Average satisfaction with the hotel in terms of sustainability (out of 10)	8	8,19	8,26	8,29	3,6%	8,2	8,3

Reviewed and externally verified data.
* Data analysed correspond to comparable consolidated hotels following the Company’s comparability criteria. Source: SUSTAINFOCUS & KHALIX.
** Energy savings compared to 2013.
*** Accumulated energy savings since 2013.
**** LEnergy, water and emissions ratios may undergo variations in future reports, depending on the availability of invoices and comparability criteria.

ENERGY CONSUMPTION

kWh/Rn

ENERGY CONSUMPTION	ENERGY CONSUMPTION 2016 (kWh)	ENERGY CONSUMPTION 2017 (kWh)	DIF 16 VS 17 (%)	ENERGY RATIO 2016 (kWh/RN)	ENERGY RATIO 2017 (kWh/RN)	DIF 16 VS 17 (%)
BU America	21.572.066	20.988.594	-2,7%	48,72	44,78	-8,1%
BU Benelux, United Kingdom, France & Africa	104.229.154	103.435.506	-0,8%	69,91	65,86	-5,8%
BU Central Europe	77.154.585	76.368.854	-1,0%	43,99	41,80	-5,0%
BU Italy	68.070.515	68.548.558	0,7%	51,77	51,59	-0,3%
BU Spain, Portugal & Andorra	92.788.515	93.047.054	0,3%	45,29	43,95	-3,0%
Total	363.814.381	362.388.566	-0,4%	51,60	49,56	-3,9%

Revised data pending external verification.
*Energy consumption data are taken from invoices and meter readings. Analysed data refer to consolidated hotels and follow the Company’s comparability criteria. Total 182 hotels.
** Ratios are calculated in kilowatt hours per room and night.

WATER CONSUMPTION

m³ /RN

WATER CONSUMPTION	WATER CONSUMPTION 2016 (m3)	WATER CONSUMPTION 2017 (m3)	DIF 16 VS 17 (%)	WATER RATIO 2016 (m3/RN)	WATER RATIO 2017 (m3/RN)	DIF 16 VS 17 (%)
BU America	110.776	142.544	1,3%	0,356	0,352	-1,1%
BU Benelux, United Kingdom, France & Africa	519.875	547.265	5,3%	0,312	0,312	0,1%
BU Central Europe	491.600	502.256	2,2%	0,251	0,244	-1,6%
BU Italy	485.980	497.638	2,4%	0,382	0,386	-1,0%
BU Spain, Portugal & Andorra	577.996	615.917	6,6%	0,307	0,317	3,2%
Total	2.216.227	2.305.621	4,0%	0,309	0,310	0,5%

Revised data pending external verification.
* Water consumption data are taken from invoices and meter readings. Analysed data refer to consolidated hotels and follow the Company’s comparability criteria. Total 106 hotels.
** Ratios are calculated in cubic metres of water per room and night.

CARBON FOOTPRINT (SCOPES 1 AND 2)

kg CO₂ /RN

SCOPE 1+2	EMISSION CONSUMPTION 2016 (kgCO2)	EMISSION CONSUMPTION 2017 (kgCO2)	DIF 16 VS 17 (%)	EMISSION RATIO 2016 (kgCO2/RN)	EMISSION RATIO 2017 (kgCO​2/RN)	DIF 16 VS 17 (%)
BU America	6.933.871	6.747.390	-2,7%	15,66	14,40	-8,1%
BU Benelux, United Kingdom, France & Africa	17.995.363	14.019.151	-22,1%	12,07	8,93	-26,0%
BU Central Europe	9.129.481	9.542.765	4,5%	5,21	5,22	0,3%
BU Italy	6.829.428	7.503.007	9,9%	5,19	5,65	8,7%
BU Spain, Portugal & Andorra	8.181.016	8.044.337	-1,7%	3,99	3,80	-4,8%
Total	49.069.159	45.856.649	-6,5%​	6,96	6,27	-9,9%

Revised data pending external verification.
*The carbon footprint is calculated according to the methodology defined in the GHG Protocol.Analysed data are of consolidated hotels and following the Company’s comparability criteria. Total 182 hotels.
** Ratios are calculated in kilogrammes of carbon dioxide equivalent per room and night

DESIGN FOR ENVIRONMENT	LOW IMPACT AMENITIES & MATERIALS	NUTRITION, WELL BEING & LOCAL TASTE
REDUCING CARBON FOOTPRINT	OPERATING SUSTAINABLE HOTELS	RENEWABLE & GREEN ENERGY

SUBSTAINABILITY PROJECTS IN THE STRATEGIC PLAN

The two specific projects to meet NH Hotel Group’s environmental goals are:

GREEN SAVINGS PROJECT

This project is focused on cutting down on the Company’s operational costs, as well as increasing energy efficiency to guarantee a saving on water, energy and other costs, such as laundry expenses.

Energy efficiency plan

This Plan encompasses energy efficiency projects, considering that they are those that can improve the building’s energy efficiency or produce some kind of saving, including:

• Replacing equipment at the end of its useful life for equipment with greater efficiency, such as light bulbs, minibars, washing systems, heating and air/conditioning equipment…
• All investments related to control of installations such as Building Management Systems, updated counters or improvements in lighting.
• Actions on the façade that represent an improvement in cover and insulation.

Environmental certification programme
NH Hotel Group boasts an ISO 14001 certification in environmental management and an ISO 50001 certification for accommodation, catering, meetings and events services.

In addition to the Company’s global certification, there are individual sustainability certifications in 132 hotels, such as BREEAM, LEED, Green Key, Hoteles+Verdes, ISO 14001 or ISO 50001.

In 2017, the NH 9 de Julio hotel (Buenos Aires) in Argentina joined the NH Edelweiss Bariloche, NH Collection Jousten and NH Collection Lancaster as holder of the Hoteles+Verdes certification, the sustainable tourism standard of the Hotels and Tourism Association of the Argentinian Republic (AHT).

Furthermore, in Italy, the hotels NH Bologna Villanova and NH Collection Palazzo Cinquecento achieved individual ISO 14001 certifications. In France, the NH Lyon Airport also achieved La Clef Verte (Green Key) status, the main international environmental certification for tourist accommodations.

NH Hotel Group has 179 hotels that boast TripAdvisor’s Green Leaders classification, with a total of 47% of the Company’s hotels having this award.

ENVIRONMENTAL MAGNITUDES

CERTIFIED HOTELS	CERTIFICATION	2013	2014	2015	2016	2017
BU Central Europe	ISO 14.001	18	23	24	24	24
	ISO 50.001	1	1	1	1	1
	BREEAM	-	-	1	1	1
BU Italy	ISO 14.001	17	29	39	39	41
	ISO 50.001	1	1	1	1	1
	ISO 14.001	3	14	21	21	21
BU Spain, Portugal, Andorra & France	ISO 50.001	3	14	21	21	21
	BREEAM	-	1	1	2	2
	GREENKEY	-	-	1	1	1
BU America	HOTELES+VERDES	-	-	-	3	4
	LEED	-	-	1	1	1
BU Benelux, United Kingdom y Africa	GREENKEY	32	35	40	40	40
TOTAL NO. OF HOTELS CERTIFIED*		70	101	126	129	132

*The total value indicates the number of hotels. Each hotel may have one or more certifications.

Sustain Focus Platform
To keep exhaustive and rigorous control over these measurements of energy consumption, carbon footprint and water consumption, NH Hotel Group uses the Sustain Focus platform, from which the KPIs of the sustainability strategy are controlled. This is an online system to which almost all of the Company’s hotels
have access and which permits the reporting, control, monitoring and traceability of the sustainability indicators as well as the water and energy consumptions and costs.

During 2017, improvements have been made to this platform achieving greater speed and usability and optimising the information consolidation processes.

Commitment to the environment and sustainability agreements
NH Hotel Group is actively involved with a variety of initiatives that help reduce the emissions generated by hotels and the activities that take place in them. As a result, every hotel in the portfolio has carbon footprint reduction targets and a background history of data that has made it possible to show the commitment to reduction.

• Presence in the Carbon Disclosure Project

Since 2010, NH Hotel Group has reported to the Carbon Disclosure Project (CDP), an independent non-profit organization that analyses the environmental performance of companies and whose indicators are consulted by multiple stakeholders.

In 2017, the Company obtained a B Management rating, which places NH Hotel Group among the companies that are taking measures to reduce emissions efficiently and a clear indicator of its advanced environmental management.

• Spanish Green Growth Group

NH Hotel Group is also a part of the Spanish Green Growth Group (GECV) since 2016, the year in which this association was created as a strong platform for public-private collaboration to advance together in the battle against climate change and towards a low-carbon economy.

• #PorElClima Community

As part of its goal to lead responsible behaviour within the industry, in 2017 NH Hotel Group joined the #PorElClima Community, an initiative that started the day the Paris Agreement came into force with the aim of being part of a pioneering movement in the battle against climate change in Spain.

In its own words, this community brings together “the most innovative, those who build the new climate-friendly economy, those who act with hope and determination”. The purpose of the community is to be a driving force for society, helping and facilitating the execution of actions to stop climate change. A key matter is achieving visibility of its creation, to extend the number of individuals and entities who join in to accelerate the transition towards the low-carbon economy the planet needs.

In the Group’s hotels, customers are also encouraged to get involved during the celebration of their events, by offering them the “Eco-friendly Meetings & Events” service and the carbon-footprint calculation service for the events and meetings held. The compensation of emissions is also offered, thus achieving a smaller impact on the environment. For further information, see the section entitled ‘Green Hotel Project’.

• Earth Hour 2017 (World Wildlife Fund, WWF)

For the ninth consecutive year, NH Hotel Group joined in WWF’s global initiative known as “Earth Hour” held on 25 March, an environmental mobilization and awareness-raising campaign about climate change.

The almost 400 hotels of NH Hotel Group participated by switching off the lighting of their façades for one hour, and organized numerous activities to involve customers, giving them the opportunity to share their commitment to the planet. For example, candlelight dinners were organized with menus prepared under a low energy
consumption approach.

GREEN HOTELS PROJECT

This project seeks to offer value to customers through sustainable actions, placing emphasis on the innovation attributes that improve the brand perception.

Eco-standards: Green Basics

• Sustainable operations guide for the hotel

NH Hotel Group has an environmental management and energy efficiency system. The policies and application procedures are available to all of the Company’s hotels and departments. This guide is key in the face-to-face training courses and awareness-raising sessions for employees.

• Sustainable food

NH Hotel Group supports the local economy and culture of the places where its hotels are located by offering its customers healthy options, organic food and menus based on seasonal, local and certified products.

• Development/promotion of sustainable innovation

The Company collaborates with universities, technological institutes and suppliers on a wide variety of projects with the aim of promoting innovation, entrepreneurial initiative and education in the field of sustainable energy.

• Incorporating sustainability into commercial initiatives

Eco-friendly meetings have been organized as part of the NH meetings initiative for company events, thus enabling customers to hold carbon-neutral meetings and making up for any impact by supporting sustainable development and climate change projects managed by Carbon Clear.

In 2017 these projects included Fuel Efficient Cookstoves in Uganda, backed by the Gold Standard, which focuses on putting a stop to deforestation and the degradation of forests; and the Fuel Switch Project, backed by VCS and Social Carbon, which focuses on reducing carbon emissions in ceramic factories in Brazil.

• Green energy. Commitment to renewable energy

NH Hotel Group is committed to the use of green energy which allows it to reduce its carbon footprint. This green energy consumption with certified renewable origin is available in 99,6% of hotels in Spain, Italy, Germany, the Netherlands, Belgium and Luxembourg, covering 89% of the total electricity consumed in Europe.

In 2017, NH Hotel Group has made a commitment to green energy for the next two years in the hotels in the Italy region. It has also confirmed its commitment to use renewable energy in hotels in the Benelux region for the 2017- 2020 period.

• Sustainable mobility

Since 2014, NH Hotel Group has had a global sustainable mobility standard for its hotels, offering such services as car-sharing or bicycle hire. At present, more than 75 of its hotels offer a bicycle hire service and 54 offer battery recharge points for electric cars.

In 2017, the bid to offer electric mobility recharge services has been reinforced through an agreement reached in the Northern Europe Business Unit to increase the number of hotels with this service in forthcoming years.

During the year, NH Hotel Group has also joined in European Mobility Week, involving all the employees of its European hotels - a total of 316 - in a photography competition with the aim of promoting and rewarding sustainable mobility initiatives. Employees had to take a photograph on their journey to work that reflected a clean, shared and intelligent mobility experience.

Customer satisfaction with sustainability

NH Hotel Group measures customer satisfaction in terms of sustainability, an indicator that at the end of 2017 scored 8.29 out of 10, surpassing the target set for the year.

This measurement is donr using the Quality Focus Online Tool, which enables the user to monitor the rating given by the customer by following reviews shared through internal channels and online channels.

THE 10 NH HOTEL GROUP HOTELS WITH THE BEST SUSTAINABILITY RATING

	HOTELS	ASSESSMENT
Spain, France, Portugal y Andorra	NH Collection Victoria	8,86
	NH Collection Santiago	8,74
	NH Collection Palacio de Avilés	8,70
	NH Ciudad de Zaragoza	8,65
	NH Collection Palacio de Tepa	8,64
	NH Puerta de la Catedral	8,63
Italy	NH Collection Porta Rossa	8,77
Central Europe	NH Collection Wien Zentrum	8,69
America	NH Queretaro	8,68
	NH Centro Histórico	8,68

Specific sustainability actions in hotels

NH Hotel Group hotels take part in actions aligned with the Company’s sustainability vision, focusing attention on the local environment and encouraging their customers and neighbouring communities to play a role in sustainability.

• Southern Europe Business Unit

In 2017 the restaurants of the Group’s hotels in Spain joined “La Gran Cadena” project in collaboration with Ecovidrio. This initiative of the prestigious Roca brothers seeks to raise awareness of the importance of adding every possible support to glass recycling. Thus, the Company’s establishments have now established separation of this material at origin, reinforcing their commitment at national level.

In turn, the hotels in Italy took part in the 13th M’illumino di Meno, an initiative promoted by Radio2 Caterpillar. This initiative, held on 21 February 2017, seeks to raise awareness about saving energy through a campaign in which the main action involved switching off internal and external lighting, as well as shared information. Both employees and guests of 51 hotels were able to join in this initiative.

In this same region, NH Hotel Group hotels also took part at national level in the 8th edition of European Waste Reduction Week, from 18 to 26 November 2017. The awareness-raising campaign reached employees and customers of the 51 hotels in this country.

• Northern Europe Business Unit

Aware of the limited space in cities for biodiversity and of the critical situation of bees in Europe, in 2017 a new hotel joined the list of those who offer a space to care for a beehive.

This initiative is in line with the Group’s commitment to be active in the communities where it operates. There are now 5 hotels that host bees on their roofs with no danger to customers. Thus, the NH Vienna City (in Vienna, Austria) joined the NH Berlin Alexanderplatz (Berlin, Germany), NH Potsdam (Postdam, Germany), NH Köln Altstadt, (Cologne, Germany) and the NH Barbizon Palace (Amsterdam, The Netherlands), which also has an urban vegetable garden.

Furthermore, the NH Conference Centre Leeuwenhorst (Noordwijkerhout, The Netherlands) won the National Green Team Award 2017. This competition, organized by Green Key, involved the participation of teams from accommodations that have been awarded this certification at national level. The subject chosen for 2017 was “the wastage of food leftovers and circular economy”.

In addition, for the second year in a row, Green Key NH Day was organized. In it the persons responsible for maintaining and implementing environmental initiatives in the hotels get together to share experiences and debate results, objectives and new initiatives being carried out in their work places.

• America Business Unit

Among the great number of initiatives carried out, of particular note are the urban vegetable gardens and the advances in waste management.

URBAN VEGETABLE GARDENS

NH Collection Royal Medellin (Colombia) cares for an organic vegetable garden where aromatic herbs such as parsley, thyme, mint, rosemary, peppermint, basil or oregano are grown on a small scale. These herbs, pesticide-free and with a high nutritional value, are used in preparations in the kitchen.

The hotel takes care of the green area surrounding it, favouring the habitat of numerous animal species and thus maintaining the connection and transit area between natural areas. This green area is open for guests to enjoy, as well as favouring the mitigation of noise and pollution emissions.

NH Collection Royal Hacienda (Bogotá, Colombia) also has a small herb garden in its exterior gardens, where aromatic plants are grown such as camomile, mint, peppermint, thyme, oregano and bay leaf, which are also used in the hotel kitchen. Additionally, 50 additional species of ornamental plants were planted in this garden last year.

These urban gardens increase the gastronomic value of dishes and reduce their negative environmental impact, by reducing the need to transport these products.

PROGRESS IN WASTE MANAGEMENT

The hotels have waste separation systems in place (paper, glass, used oil, plastics…), through which materials are recovered for recycling and subsequent valuation

At NH Collection Bogotá Teleport Royal, NH Collection Royal WTC Bogotá, NH Bogotá Metrotel Royal and NH Collection Bogotá Hacienda Royal, this system has managed to achieve a recycling ratio or more than 60% of the waste generated. The usable waste is managed by recycling co-operatives.

For example, NH Royal Terra 100, also in Bogotá, Colombia, separates unused soap to revalue it in other products. Thanks to the collaboration with a processing company, this product is turned into soap for pets, and following its chemical processing it is also used for vegetable compost.

In addition, a number of hotels in this continent separate PET lids and caps with the aim of collaborating by donating them to associations and foundations in the community for social purposes. The team at NH Coatzacoalcos, Mexico, collaborates actively with the City Council’s recycling programme, promoting the recycling of paper and plastic bottles.

RESULTS FOR 2017 AND OBJECTIVES FOR 2018

ENVIRONMENTAL INDICATORS

Revised and externally verified data.
*Figures for 2007-2012 of comparable Hotels according to 2013 criteria.
*Figures for 2013, 2014, 2015 and 2016: figures have been restated according to consolidated and comparable results.

RESPONSIBLE BUSINESS

DIALOGUE WITH STAKEHOLDERS

NH Hotel Group maintains a constant and fluid dialogue with its stakeholders, through multiple channels and formats, with the aim of keeping the Company up to date on new demands and needs, and to respond better to stakeholders’ concerns and opinions.

In recent years, social media have become essential for relations with customers and society. For NH Hotel Group, other channels are also very important in assuring stable relations with its stakeholders, such as satisfaction surveys with customers and employees, and regular meetings and encounters with other stakeholders, such as shareholders, suppliers, employee’s representatives and third-sector agents.

RESPONSIBLE ALLIANCES

GLOBAL COMPACT

NH Hotel Group adhered to the United Nations Global Compact in 2006 and follows its 10 principles and the Sustainable Development Goals – SDG - as a reference framework for designing the Company’s Corporate Responsibility strategy and management.

WORLD TRAVEL & TOURISM COUNCIL (WTTC)

This prestigious international forum for the travel industry includes the main companies of the business community at global level and works with governments to create awareness about the travel and tourism industry.

INTERNATIONAL TOURISM PARTNERSHIP (ITP)

A global platform that brings together the international leaders in Corporate Responsibility within the hotel sector. In 2017, ITP and its members have continued to work on their most ambitious plans to establish four common goals related to carbon emissions, water scarcity, human rights and youth unemployment.

The purpose of the agreement in these areas is to complement the individual targets set by the Companies in the belief that only through collaboration and working together can the most significant impact be achieved on these responsible aspects which are the most pressing issues facing the industry at the moment.

YOUTH CAREER INITIATIVE (YCI)

In 2017, NH Hotel Group has continued its participation in Mexico City with this alliance for the training and professional development of disadvantaged youth, together with the leading chains that are part of the ITP. This year, a total of 32 young people have participated in the programme, at 5 of the Company’s hotels.

SERES FOUNDATION

NH Hotel Group has been a trustee of the SERES Foundation since 2016, to further its strategy of becoming a leader in social responsibility within the tourism industry. SERES Foundation encourages businesses to commit to the betterment of society through responsible actions aligned with the Company’s strategy and generating value for all.

PRESENCE IN SUSTAINABILITY INDICES

FTSE4GOOD

FTSE4GOOD is an index created by the London Stock Exchange to help investors include environmental, social and corporate governance (ESG) factors in making investment decisions. NH Hotel Group became part of this index in 2013 and renewed its presence in 2017 thanks to the responsible management of the business and the improvements made.

ETHIBEL EXCELLENCE INVESTMENT REGISTER

This index comprises leading companies in Corporate Social Responsibility in different sectors. Being part of this index highlights the good performance of NH Hotel Group above the average in the sector, and promotes Socially Responsible Investment (SRI) amongst investors and funds.

CARBON DISCLOSURE PROJECT (CDP)

CDP’s Climate Change Programme recognizes the efforts made by leading global companies to help stop climate change. In 2017 NH Hotel Group has obtained a B Management rating, placing it among the companies that are taking further steps to reduce emissions effectively.

To find out more about NH Hotel Group’s commitment to help stop climate change, consult the section entitled ‘Planet’ in this report.

RESPONSIBLE VALUE CHAIN - SUPPLIERS

NH Hotel Group bases its business on a responsible value chain and on fluid communication with its stakeholders. In this regard, the Company’s relations with its suppliers are based on a bilateral, transparent and effective dialogue that facilitates the development of tools and solutions that are both sustainable and innovative.

The Procurement Department of NH Hotel Group has met the goals of the five-year Strategic Plan and, specifically, has reached the milestones set for 2017:

• Compliance with Procurement’s commitment to the Operation, absorbing inflation in most countries. Where this milestone was not reached, increases were below 50% of inflation.
• TraNHsformation Plan. The Procurement Area is part of this strategic plan that affects some areas of the Company at global level, with the aim of improving processes, procedures and goals (Procurement to Pay Process).

PROCUREMENT POLICY

The consolidation of NH Hotel Group’s Procurement Policy has made it possible for all tender processes to be carried out based on the same criteria of equality of opportunity, transparency and rigour. The Awards Committee has participated in a total of 14 tender processes, mostly for hotel refurbishments.

NUMBER OF SUPPLIERS BY BUSINESS UNIT
BU Benelux, UK & SudAfrica	3.209
BU Central Europe	3.723
BU Spain, France, Portugal & USA	4.713
BU Italy	1.668
BU America	1.686

*Variations 2016-2017 are the result of the volume of refurbishments/investment concentrated in 2016.
**Figures for Spain include HQ (Corporate)

SUPPLIER CERTIFICATION

Code of Conduct

During 2017, a total of 372 new suppliers at global level have adhered to the Code of Conduct. At December 2017, 1,496 Ethical Codes have been signed with active suppliers.

Environmental commitment

LSince 2015, the Company has had a Supplier Rating module in the Electronic Business Platform. In this module, all suppliers included in the Electronic Business Platform are assessed using a series of parameters associated with environmental management, commitment to the fight against climate change, carbon footprint reduction, responsible consumption of resources and utilization of recycled materials.

Innovation and transparency: Electronic Negotiation

The use of the Electronic Business Platform in most tender processes makes it possible, through the RFI (Request for Information) option offered by the tool, to pre-assess all the suppliers submitting offers, analysing their legal, financial, environmental, operational and labour situation. This makes it possible to minimize possible risks that suppliers could generate in future operations with the hotels

SAP MATERIAL MANAGEMENT

After continuing with the implementation of the SAP MM module in all of the Group’s Business Units, NH Hotel Group continues to be engaged in its strategic TranHsformation Plan in order to ensure the on-going improvement of the participating areas. The Procurement Department has not only participated in this process but has also managed to meet its targets in terms of compliance rates. In addition, in 2017 electronic Billing has been successfully extended to all of Europe.

COPERAMA: CONSOLIDATION AND INTERNATIONAL EXPANSION

Coperama is the central procurement centre for NH Hotel Group hotels, which has been driving the Company’s growth since 2010. The consolidation of Coperama Italia, the creation of new Coperamas (Central Europe, Mexico and Colombia) and the start of the activity of Coperama Holding, have been the Company’s main expansion actions in 2017.

With these new operations, the process of outsourcing all the NH Hotel Group Procurement departments which started in 2010 with the creation of Coperama Spain is now completed.

Situation of Coperama (Spain, Benelux & Italy)

Accordingly, the situation of the establishment adhered to the different Coperamas is as follows:

		ASSOCIATES
	HOTELS	RESTAURANTS	OTHERS
Coperama Spain	487	115	195
Coperama Benelux	46	4	0
Coperama Italy	15	7	5

The total number of stablishments is 870, of which 544 are hotels.