Monday, June 24, 2024

IHG to announce new luxury lifestyle soft brand

InterContinental Hotel Group, owner of Crowne Plaza and Holiday Inn, is launching a brand targeting the luxury leisure market in a bid to keep pace with rivals as travel begins to recover, according to a statement put by the company.

“We are excited to announce that we’ll soon be launching a new luxury & lifestyle collection brand to provide further choice for guests and owners. Over the last four years we’ve added five new brands to create a portfolio of 16, each targeting a specific segment and enhancing our market reach.

“The addition of a collection brand will provide high quality independent hotels access to the many benefits of IHG’s system, whilst retaining a property’s distinctive identity. There are currently around 1.5 million independently run rooms in the market segments we are targeting, and we expect the collection to attract more than 100 hotels within 10 years.” said Keith Barr, IHG Hotels & Resorts’s chief executive officer.

The recent surge in Covid cases caused by the Delta variant saw a drop in bookings as domestic bookings for air tickets and hotel rooms in the US slowed down. But it added that bookings from domestic customers worldwide had generally held up and that whenever travel restrictions were lifted sales rose. Barr said that 50 per cent of the group’s portfolio was outperforming 2019 levels, thanks to holiday demand.

Of its 5,994 hotels, 84 remain closed compared with 300 at the beginning of the year. Barr warned, however, that although prophecies about a permanent reduction in business travel were “greatly exaggerated”, he did not expect a full recovery until 2023 at the earliest.

“We opened 132 hotels in the half and signed 203, both sizeable increases on last year. Our focus on the quality of our estate remains extremely high, and we’re making rapid progress with the review of our Holiday Inn and Crowne Plaza portfolios to ensure the consistency of these leading brands and that they are well positioned for future growth. With the actions we are taking, and a pipeline that represents more than 30 per cent of our current system size, we expect to return quickly to an industry-leading level of net rooms growth.”

The brand saw a significant improvement in demand over the course of H1, resulting in RevPAR  reaching 43 per cent vs 2019 and 20 per cent vs 2020.

“Trading improved significantly during the first half of 2021, with travel demand returning strongly as vaccines roll out, restrictions ease, and economic activity rebuilds. It has been great to see our teams welcome more and more guests back into our hotels, with domestic leisure bookings leading the way, particularly in the US and China.

Revenue recovery was slowest in Europe, the Middle East and Africa, despite the rapid roll out of vaccines in Europe, with revenue per available room — the industry’s preferred metric — 65 per cent below 2019 levels in the region, compared with 16 per cent below 2019 in Greater China and 26 per cent lower in the Americas in the six months to the end of June.

“What we recognized was that through Covid a poorly maintained hotel was not seen as a safe hotel,” he said.

“The actions we have taken during the last 18 months position us well to exceed our pre-pandemic level of growth and profitability. While there is a risk of trading volatility in the balance of the year, and discretionary business trips, group bookings and international travel will take time to fully recover, we are confident in the strength of IHG’s future prospects,” added Barr.

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