Quality Management System

With the implementation of different projects in 2018 and thanks to the Company’s Integral Quality Management system, perceived quality ratings among NH Hotel Group customers have maintained the trend shown in 2017. These results come from a customer-focused culture of change which adapts rapidly to the variable needs of the market.

NH Hotel Group created a Single Customer Service Center, combining Customer Care, NH Rewards and the VIP Desk, which has been consolidated in 2018, extending its capacity for response and improving the level of service.

Single Customer Service Center Tools

• SAP: TMS4 Customer Care
  This is a module that lets any interaction with customers be recorded, from the time the complaint is received. Customers can manage their complaints through multiple channels: e-mail, telephone, website, hotels, social media…The types of contact are divided into comments or suggestions, complaints, congratulations, requests, claims or technical incidents.
• Quality Focus
  Every week data is drawn from the satisfaction surveys received, identifying those managed by Customer Care.Depending on the type of comment received, the type of response varies from direct interaction with the customer, by e-mail or telephone, to a standard e-mail response for neutral comments.

In addition, in the course of 2018 we have improved our quality network with a new role known as “Quality Influencers”, quality ambassadors at NH, who provide support to the Quality Directors in the different Business Units, with the aim of improving the quality of service and satisfying customers’ expectations.

Evolution of quality measurement tools in 2018

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 Quality Focus Online that makes it possible to monitor customer reviews through internal and online channels.

Notable among the main improvements in the tool in 2018 is the integration of a new module for comparisons between NH hotels in order to identify the best and worst performing hotels. A number of technical improvements have also been made, and new features have been brought into use that improve the end user’s experience.

The Customer Care area has managed to reduce response time from 72 to 48 hours in 93% of the communications received in 2018. The target set and which it works towards every day is a maximum of 24 hours. This reduction, together with direct interaction by hotels, Managers, Guest Relations personnel and Heads of Reception through Quality Focus, has contributed to faster and more effective solutions. The Company continues in this way to focus on customers and their satisfaction.

In 2018 the Customer Care area has handled a total of 11,191 claims or contacts (whether complaints, requests, suggestions, congratulations…); this represents a 41% reduction in contacts handled by this area compared to 2017. It should also be noted that in 2018, 17% fewer complaints made through Customer Care were recorded.

To maintain the Company’s high standards in relation to quality and customer satisfaction, the heads of quality of each NH Hotel Group Business Unit visit practically all the hotels, mainly those where areas for improvement have been identified, in order to implement the necessary corrective actions.

The main tool for carrying out quality control in the hotels of NH Hotel Group through a smartphone is an app called Iristrace, which has continued to be used in 2018. Furthermore, with the intention of understanding its guests better every day, the Company has continued to use the services of Trust You, which it started to use in 2017. This is a semantic analysis tool that makes it possible to have greater visibility of what customers are saying about NH Hotel Group and which has helped to identify the main areas for improvement both in terms of service and product.

Communication with Customers

Direct contact with customers is key in order to offer them personalized services and make their experience with NH better and better. In 2018, almost 200 million e-mails were sent to customers.

Relaunch of the NH Rewards program

Generating value for our customers is part of NH Hotel Group’s DNA, and our NH Rewards loyalty program is a key tool in achieving this.

In 2018 there were more than 9 million members of NH Rewards and, with the constant aim of improving, the program was relaunched with a renewed image and with new and greater benefits to reward the most loyal customers every time they stay at the Company’s hotels.

With this loyalty program, the innovation policy and constant improvement in establishments, NH Hotel Group aims to continue to be a benchmark in the sector, not just in Spain but in all the destinations where it is present.

In 2018 a total of 133 million e-mail marketing campaigns were sent to NH Rewards members, which shows NH’s commitment to day-to-day relations with its customers. Furthermore, in line with transparency in the processing of personal data, the Company’s Privacy Policy was updated in 2018.

Responsible Guests

In its commitment to sustainability, NH Hotel Group seeks to include and engage its customers in its Corporate Social Responsibility initiatives, whether by generating opportunities to contribute socially or by promoting environmentally responsible behavior.

An example of these inclusive actions is the NH Rewards program’s UNICEF donation project, in which members donate their NH Rewards to UNICEF. In 2018 this project raised 23% more than in 2017.

The Company also provides its guests with charging points for electric cars and an eco-friendly service to ensure that meetings and events held in the hotels have a minimal environmental impact, as well as offering the possibility of them being carbon-neutral.

Improvement in direct sales channels

The growth in business generated through the NH Hotel Group website since its relaunch continues. In the last 24 months, it has grown by more than 16%, backed by the contribution in 2018 of the nhow brand (20% more) and the Latin America region (34% more). Growth in the business to business segment is also notable, which has grown by more than 35%.

This growth has meant that for yet another year, a record has been broken in terms of the website channel’s contribution to the revenues of NH Hotel Group, with revenue per room remaining at similar levels to 2017.

Marketing of services in other channels

NH has helped to market its products through 13 sites and microsites, using more than 15 languages or language localizations.

This personalization, combined with the systematic application of techniques to improve conversion, with more than 300 experiments in 12 months, have enabled us to obtain conversion improvements on all devices (desktop, mobile and tablet) of between 4% and 14%.

NH Hotel Group app

The NH Hotel Group app and its approach go beyond being a basic service tool for customers.

In line with the Company’s innovative spirit, the mobile app is used as a key differential tool and as a laboratory, to then launch new concepts massively on multiple devices, such as the launch of the FASTPASS service described above.

Culture of diversity and equality

NH Hotel Group’s corporate culture is based on the pillars of diversity and equality.

Thus, the Company’s 17,567 employees in 2018 are of 131 different nationalities, and 13.4% of them work in different countries from their country of origin.

Furthermore, 47% of the total number of employees are women, who hold 42.5% of the total management positions.

As far as age is concerned, in 2018 the percentage of employees between 25 and 40 years old was 48.9%, while those under 25 years old represented 16.8% and those over the age of 40 totaled 34.5%.

Promoting job stability

NH Hotel Group promotes job stability, especially for women and employees under 40 years old. Thus, in 2018, 75% of average contracts with female employees for workplaces in the consolidated perimeter are permanent. Furthermore, 75% on average of employees from 25 to 40 are under permanent contracts.

Opportunities in diversity management

The salary of women at NH Hotel Group in 2018 represented 90% of the gross hourly salary for men; the average gross hourly salary is 15 euros for men and 14 euros for women.

This first analysis of the diversity of the NH Hotel Group workforce and salary differences within different groups has allowed us to confirm aspects that were already known such as the positive presence of women at all levels of responsibility in the Company.

However, it has also served to identify that in certain cases the salary gap increases as the level of responsibility of employees increases and as their career progresses. This situation offers a great opportunity to carry out an analysis in greater depth of the different groups of employees, not just women, and establish as a priority to continue with a long-term project of real management of employee diversity in all aspects, and support their professional development within the Group.

Employee engagement

Throughout 2018 NH Hotel Group continued to work in the context of the NH Engagement Commitment by implementing actions based on the results of the Engagement Survey 2016.

The teams responsible for working on engagement at each workplace carried out action plans with the aim of improving the work climate. The main actions in place at hotel level in the different business units were concerned with communication; career, training and development; sustainable commitment and
corporate responsibility.

Furthermore, at the corporate offices a third edition of the ‘Excellent Performance Recognition Program’, was launched, in the framework of the NH Engagement Commitment, to recognize and reward initiatives identified as extraordinary contributions.

Employee Engagement Survey 2018

The impact of these and other actions has been measured through the Employee Engagement Survey 2018, which was carried out in October.

As in other years, all employees of NH with more than three months’ service at the Company at the time of launching the survey, and under both permanent and temporary contracts, were invited to participate.

In this third edition of the survey has been obtained a very high participation rate (87%), which means that the results are very representative and reliable. The Sustainable Commitment score was 79, only one point lower than 2016 but still high score.

Talent and performance management

“New Time For You” Performance Management

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. In 2018 the New Time For You–NTFY– which was piloted at corporate headquarters and in several hotels in each Business Unit in 2017, has been extended to the entire company.

Starting from this year, the New TFY includes a new formal feedback procedure, the Mid-Year Review, the purpose of which is to monitor the individual development plan, identifying what is going well and what could be improved.

Participation in the Mid-Year Review in 2018 was 82% of the target employees. Regarding to the Annual Review, the participation level was 95,26% of target employees*, reaching very similar figures to last year (95.55%).

Furthermore, this year the request for feedback for supervisors about the performance of their teams has been promoted, together with the importance of talking to each co-worker about their professional future in NH Hotel Group. In addition, the overall evaluation has gone from 4 to 5 levels, with the aim of differentiating teams’ performance more.

With NTFY, NH Hotel Group continues to work on its leadership culture, promoting more moments of formal feedback during the year, making the process simpler and more in line with the reality of its business, and making employees the leaders of their own development, offering a library of development actions structured around the 70:20:10 learning principle (70% Experience – 20% Exposition – 10% Training) available to them.

*Information regarding NH Hotel Group data considering fixed employees, global employees and expatriates with more than 3 months in the Company. Dominican Republic, Haiti, USA, China and Venezuela are excluded.

360° Assessment

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 2nd edition of the process was launched with the purpose of measuring evolution in the development of competences in this key aspect in NH Hotel Group.

A new feature this year was that the peer perspective was, made up of not only hotel managers from the same region, but also coworkers from different areas of central services.

In 2018 participants were invited to group feedback sessions arranged by the Human Resources teams, where they were given their individual results and shown how to interpret them. The results were structured as a workbook that not only compared the results between the two editions , but also included questions for reflection on each aspect. This allowed them to measure their evolution over these two years and work on a new individual development plan, taking into account the results obtained from each point of view (manager, team and peers).

Training: NH University

NH Hotel Group has always been committed to the professional development and training of all its employees as a way to put into practice the philosophy of excellence and continuous improvement that inspires its customer service vocation. The Company manages all face-to-face and online training projects through its corporate university, NH University.

In 2018, training was given to 11,556 participants in 509 different training programs, distributed over 946 face-to-face training sessions. A total of 6,160 employees out of the total of 17,567 employees received face-to-face training in 2018, which represents 35% of the total workforce. NH University continues to believe in its internal talent and used 209 in-house trainers in its face-to-face classes in 2018.

In line with the company’s training strategy and continuing with the trend of previous years, this year has seen a high ratio of participation in online training. In total, 12,718 employees received some form of online training during the year, which represents 72% of the
total workforce.

Key training and development projects in 2018

Corporate

• NH REWARDS MASTERS
Throughout 2018, the Company has been immersed in the relaunch of the new NH Rewards program. Among the initiatives included in this program, NH University has worked on 2 different actions to reinforce its importance:

– NH Rewards Masters. An e-learning course available to all employees, the main objectives of which were:

• To ensure that employees are familiar with the changes in the new NH Rewards program.

• To explain the basic concepts and procedures related to the program.

• To harmonize customer service in relation to the NH Rewards program.

More than 3,000 employees received the training and learned all about the new NH Rewards program, gaining the necessary knowledge on how to optimize relations with the company’s best customers, how to make their stay perfect and get them to come back to our hotels.

– NH Rewards Masters Challenge. Launched only for employees in the Front Office and Reservations departments who had previously completed the NH Rewards Masters e-learning course. The purpose was to reinforce the knowledge gained in the previous training by participating in a quiz format game with over 500 questions related to our loyalty program. Employees challenged their coworkers to answer correctly and quickly to win points and earn a place among the top 25 employees in the world ranking. The prize consisted of loyalty points that could be redeemed for nights at a hotel or other services at our hotels.

• E-LEARNING COURSE ON THE GENERAL DATA PROTECTION REGULATION

Due to the entry into effect of the new European General Data Protection Regulation (GDPR), NH University launched a mandatory e-learning course for all employees, in the 6 corporate languages. This training covers the basic concepts of data protection, rights and obligations that apply to all employees and other NH Hotel Group stakeholders who handle personal data in the course of their professional activity.

• NEW HEIGHTS EXCLUSIVE

In October 2018, 47 of our hotel managers who had stood out for their excellent performance participated in “New Heights Exclusive” in Madrid.

To reward their excellent performance and commitment, but also to inspire and motivate them in terms of leadership, the managers were invited to the NH Collection Eurobuilding to participate in a 2-day program organized with the collaboration of the prestigious Hotelschool The Hague.

Participants also had the opportunity to hear about new developments and future projects of the Company related to business transformation, and get up to date on matters of quality and experience.

Over these two days they were able to participate and share experiences with other managers through workshops and motivational talks.

Common development project between Northern and Southern Europe

• CROSSING NH BORDERS
The first exchange program that NH Hotel Group offers to employees who work in the Northern and Southern Europe Business Units. In a pilot version, six employees from Spain, Italy, Belgium, Germany and The Netherlands participated in exchanges lasting for 3 months.

Northern Europe
Central Europe

• R.U.N.
The first training focused on executive chefs and F&B managers, covering culinary trends, F&B management skills, SAP skills, Coperama food and beverage trends and a suppliers’ market.

• JUMP & PDI Northern Europe Business Unit
In 2018 we renewed the content of the JUMP and PDI programs for the Northern Europe Business Unit. This was also the first year in which all candidates in Northern Europe joined the same program in an international group.

• Sales Academy
Following the example of JUMP and PDI, the Sales Academy was launched to prepare sales employees who showed great potential for the role of regional sales manager. The modules are similar to the JUMP and PDI modules and include leadership, communication, presentation skills, department-specific information and networking.

• HR Roadshow (Recruiting Refresher)
An HR Roadshow was organized in Germany and Austria to train managers and supervisors in interview selection skills as well as a Human Resources open day so that all employees in 6 different regions and cities could personally connect to Human Resources and hear about trends on development and new job opportunities.

• NH4U Stay Day
This is the second time that this Business Unit have organized an information day for Azubis who are completing the studies in the hospitality industry after 3 years. They met with several hotel managers and central services managers and obtained information on opportunities and development possibilities at NH.

• Azubi Welcome Day
The Azubi Welcome Day was organized for the first time at regional level in 3 locations for all new Azubis in 2018. They obtained a first impression of the company and enjoyed a teambuilding activity.

Southern Europe
Italy

• NHew Manager
A talent development program designed to identify, train and support participants to be General Managers by offering them the best employee experience through a one-year program that combines classroom learning and on-the-job training in addition to individual coaching.

• New Hod
A talent development program designed to identify, train and support participants to be Heads of Department, offering them the opportunity to grow professionally through classes on technical and soft skills, on-the-job training and individual coaching.

• F&B Event
A new training experience that has been organized for the first time in Italy and consists of a mixture of inspirational talks on the world of F&B, both in a classroom setting and in workshops for chefs and maîtres on innovations and tips for everyday tasks.

• Ambassadors Day
An event for hotel Ambassadors in Italy aimed at acquiring more skills in their fundamental role through a work and fun session, useful methodologies and tools for their role and clarifying the missions of Ambassadors in NH Hotel Group.

• Dynamic Networking for Sales and GMs
A type of training for General and Sales Managers that consists of transferring networking skills. The aim is to promote professional growth and strengthen the personal brand and the NH Hotel Group brand through networking devices and techniques.

Spain

• MENTAR
The second phase of the MENTAR program, which started in 2016, was completed in 2018. MENTAR is a manager development program divided into three training phases: the Introduction to Management Phase (IMP), Corporate Training Phase (CTP) and Management Training Phase (MTP), all of them based around a process of corporate mentoring.

This mentoring program seeks to generate a learning relationship between mentor and mentee where shared learning becomes a tool for transformation and an end in itself.

NH Hotel Group’s definition of mentoring: a methodology that acts as transformation lever that facilitates and accompanies a learning process in which a person (mentee) directs his or her development guided by the experience of another person (mentor) and based on the NH Culture.

The MENTAR program allows us to identify talent and potential and therefore to prepare and develop future hotel managers, both in technical and skillset aspects. The estimated duration of the program is a year and a half.

The mentees are heads of hotel departments or employees of Central Services with experience in operational and/or administrative teams who have undergone the selection process. The mentors are the Business Unit managers who voluntarily wish to be part of the program and meet the established requisites.

A team of Directors is responsible for managing and directing the program, suggesting improvements and carrying out follow-up.

America
Mercosur

• NH Service Standards: Housekeeping
This program is meant to train housekeeping employees on good practices in the industry and specific features of this service at NH Hotel Group.

The training was designed along two lines: one consisting of a training from housekeeping managers in Argentina and Uruguay (where there were also other in-house trainers from HR, Procurement or SAP among others), and the other one, which covered the training of all basic housekeeping staff in Buenos Aires, around 170 people.

This initiative was then replicated in the four cities in which NH is present
in Chile.

• Leadership, Communication and Teamwork
This initiative was born after the Business Unit’s HR department identified the need to train their leaders in certain management matters, Through 4 different sessions, 100% of the middle managerment of Buenos Aires had the opportunity to gain skills on: Leadership, Communication, Teamwork, Conflict Resolution and Negotiation over the course of 2 days.

This training included preliminary work prior to the course, which generated a high level of awareness of the issues fostered in the classroom learning.

• Mercosur FOM Training
All the Front Office Managers from Argentina, Uruguay and Chile were brought together in 2018 for a specialized training program. Beyond the specific learning objectives, it proved to be a great opportunity for valuable networking and knowledge exchange among peers.

• Mercosur Chef Training
In 2018, all the Chefs from Argentina, Uruguay and Chile met and received a special masterclass from a renowned NH Hotel Group chef, Txema Remola.

The chefs also visited different breakfasts of the chain’s hotels to propose improvements and carry out an internal benchmarking.

• PILLS: A NEW TRAINING CONCEPT

This year a new in-house training methodology has been developed in the America Business Unit: “pills” or express training.

At an hour-long (maximum) Skype meeting, several in-house benchmarks provided training to different audiences on a range of subjects.

Each pill was offered at least twice at different times of day in order to provide alternatives to the audience. These items originally arose as a response to a lack of awareness of the TraNHsformation Plan KPIs, but it was later decided to extend the methodology to other matters.

Mexico

• SIGNING OF THE NATIONAL CODE OF CONDUCT

The National Code of Conduct for the protection of children and young people in the travel and tourism sector (NCC) seeks to offer guidance to the industry on the prevention of and fight against situations of people trafficking, with special emphasis on child exploitation.

For this purpose, personnel at several hotels in Mexico obtained accreditation in the National Code of Conduct.

To obtain NCC accreditations, hotels must comply with 6 guidelines:

1. Establish in a company document its commitment against child exploitation.
2. Raise awareness in and/or provide training to at least 80% of employees on the prevention of child exploitation.
3. Establish an Action Protocol in alleged cases of child exploitation.
4. Set up collaboration networks for the prevention of child exploitation.
5. Inform customers and suppliers of the child protection commitment.
6. Submit a final report on the activities carried out (including evidence of implementation).

Colombia and Ecuador

• MANAGEMENT SKILLS
After identifying the need of training leaders in management-related matters, the decision of providing 3 workshops, of 24 hours each, was taken. These workshops were organized as follows: 8 hours of in-house training on different matters and 16 hours provided by People Excellence on management tools. The sessions were focused on offering managers the necessary tools to put in practice a better administration of resources and at the same time strengthen their planning and strategic thinking skills.

Flexibility and work-life balance: New Way of Working

The NH Hotel Group culture continues to progress towards a more flexible and collaborative model, in which individuals can enjoy greater facilities in relation to time management, and do their work in environments adapted to their activities and with the necessary tools.

This project, which is called ‘New Way of Working’, is structured around three lines of action:

• Redefining and adjusting physical office space according to employees’ needs
• New technological equipment and systems that facilitate flexibility
• New flexible working culture both in terms of hours and workplace

Accordingly, the NH Hotel Group corporate offices created the role of the Mayors, whose aim is to facilitate change management, communication, employee engagement and answer questions. Thus, a total of 7 Mayors represent each of the districts or areas of the offices (Commercial, Marketing, Resources, Operations, Finance and Communication) and have the following functions:

• To represent their area at weekly meetings of the Enhgagement Team, responsible for the NH Enhgagement Commitment in the corporate offices.
• To channel possible requests, suggestions or proposals for improvement generated in their respective areas and convey them to the Human Resources Business Partner (HRBP).
• To propose new Action Plans, with both local and transversal measures, based on the results of the Engagement Survey.
• To reach a consensus on the proposed measures with two sponsors – relevant executives in the Company – to obtain their feedback and seek their support in presenting the Action Plan.
• To submit the Action Plan to the CEO and the Management Committee.
• To carry out a follow-up of the implementation of the different measures in their districts and, if necessary, propose corrective measures.
• To check up on the working environment on a weekly basis.
• To sound out how the different measures launched by Human Resources are perceived by their coworkers.