IHG Hotels Plans for New Brands

IHG Hotels Plans for New Brands

Targeting Chinese consumers and wellness travelers, two new brands from IHG Hotels are part of a formidable growth strategy By: Mindy Poder
Even Hotels, one of two IHG brands launched last year, serves the growing wellness sector. // © 2013 InterContinental Hotels Group
Even Hotels, one of two IHG brands launched last year, serves the growing wellness sector. // © 2013 InterContinental Hotels Group

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Read about 10 hotel & travel trends for the coming year.

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InterContinental Hotels Group Travel Consultant Connection

Expanding your mind and getting out of your comfort zone: they may be among travel’s greatest virtues, but few travelers aspire to do such things during their hotel stays. InterContinental Hotels Group (IHG) knows this. Last year, the company launched not one, but two niche brands in line with consumer preferences: Hualuxe Hotels & Resorts for Chinese consumers and Even Hotels for wellness travelers. These additions to IHG’s portfolio of preferred brands — InterContinental Hotels & Resorts, Holiday Inn Hotels and Resorts, Holiday Inn Express, Hotel Indigo, Crowne Plaza Hotels & Resorts, Staybridge Suites and Candlewood Suites — contributed to IHG’s steadfast plans to grow its current global hotel count, which currently exceeds 4,600 properties. Last year, IHG signed, on average, one hotel per day to its pipeline for a net rooms rise of 2.7 percent and achieved a global Revpar (revenue per available room) growth of 5.2 percent, an operating profit rise of 10 percent (reaching $614 million) and a 3.8 percent increase in revenue (reaching $1.8 billion).

IHG has plenty to celebrate this year, including its 10th anniversary as an independent company with a bright future across brands and across the globe. The Americas region accounted for nearly half of the company’s revenue, indicating a successful relaunch of the Holiday Inn brand, which was ranked the “Highest in Guest Satisfaction Among Mid-Scale Full Service Hotel Chains” by J.D. Power and Associates for the second consecutive year. Holiday Inn Express is IHG’s biggest international source of growth, with 452 properties in the pipeline for the next three to five years, including 15 in India and 12 in Indonesia. Furthermore, an increasing amount of new rooms are coming from China, speaking to IHG’s strategy to invest in developing markets in order to achieve high-quality growth. Judging from Even Hotels and Hualuxe Hotels & Resorts, the company also plans to grow its market share by pioneering targeted brands for today’s consumers.

Travel Agents
IHG’s success and expansion can, of course, mean good things for  agents who are keeping up. According to Andrew Rubinacci, vice president, distribution and intermediary sales for IHG, agents who are working well with the company have at least one thing in common: They are engaged. Since IHG unveiled its travel agent website nearly three years ago, more than 50,000 travel agents have registered with IHG’s Travel Consultant Connection.

“What seems antiquated but what is working really well is that travel agents have been opting in to get more information from us,” Rubinacci said. “We’ve done email campaigns, and we’re getting a 35 percent open rate which, if you know about direct mail, is really fantastic. Agents are highly engaged, and what we’re sending actually has value.”

In addition to receiving emails announcing property openings and agent promotions, perks of membership include access to discounted travel agent rates for personal travel; the ability to earn Priority Club Reward points during special promotional periods upon completion of IHG Agent University modules; and a streamlined enrollment to PCR for agents who are not yet members. Created specifically for travel agents, the IHG Agent University program is doing so well that IHG is considering offering the courses in other languages, with a Spanish version expected to roll out this year, and other languages to follow. Enhancements to courses are made when necessary, and travel agents can expect offerings related to IHG’s new brands, which will be offered in tandem with the debuts.

“Hualuxe Hotels & Resorts and Even Hotels are very specific to the customer’s needs,” said Rubinacci. “We will have specific interactive information on those brands so that agents can better match what the customer is looking for and hopefully make their client happy.”

Much of IHG’s current travel agent business is related to corporate travel. As a result, the trends in travel agent bookings have mimicked the overall ebb and flow of the economy.

“Our travel agent channel is still growing,” said Rubinacci. “Travel agents serve a very valuable purpose for the consumer, and many corporations still solely use agencies.”

IHG plans to invest even more in the travel agent channel. Part of IHG’s travel agent strategy for 2013 is to focus on the luxury travel agent. During the year, the company is planning to roll out services tailored for these specialized agents.

“We have plans to target luxury travel agents with additional functionality and membership-based programs — things that speak to their needs and what their clients need, which is different than the needs of the business traveler,” said Rubinacci.

IHG also plans to enhance its support for agent partners such as wholesalers and tour operators via a new web portal.

“We’re looking at the entire distribution chain and making sure it understands what IHG has to offer,” he said.

Rubinacci understands that agents are already occupied with taking care of customer needs, but he does hope that agents who primarily book air will consider booking both air and hotel through their GDS. He also stated that travel agents have access to all of the best rates available to the general public. The company is growing rather rapidly though, which is why IHG remains focused on providing agents with the tools to keep up, best match clients with properties and make bookings with ease.

Even Hotels
Of the two new IHG brands, Even Hotels presents the better opportunity for travel agents, as it will be an attractive option for business and leisure clients in North America. Though other major hotel brands, including Starwood’s Westin brand and a number of luxury and destination spa properties, also focus on guest wellness, IHG considers Even Hotels a pioneer for the industry, touting the brand as the first to offer a holistic wellness experience under one roof at a mainstream price.

“As someone who travels a lot, it is sometimes really hard to be well on the road,” said Rubinacci. “But if you go on a business or a leisure trip, you don’t have to give up taking care of yourself.”

The first property signed for Even Hotels is its flagship 230-room, newbuild in New York. The IHG-managed hotel, located in midtown Manhattan at 219 E. 44th Street, is scheduled to open in late 2014, but agents will likely be able to book an Even property as early as this year. IHG expects that the first Even hotel will open in 2013, though the location has not been announced.

In the next five years, IHG aims to sign 100 Even Hotels in the U.S. under managed and franchised agreements, in line with the group’s asset-light strategy and initiative to grow its U.S. market share, which currently represents the majority of IHG’s rooms. IHG plans to announce additional locations over the next few months. Key markets for the brand are major U.S. cities currently serving a high concentration of IHG guests, including New York, Washington, D.C., and San Francisco.

IHG was also interested in taking advantage of the growing wellness sector, according to Kirk Kinsell, president of the Americas for IHG. The new brand is the result of more than 18 months of research in which IHG analyzed emerging trends, conducted extensive studies and interviewed more than 4,000 customers. From the research, IHG deduced that a growing number of clients — as many as 17 million travelers — want to maintain their balance and wellbeing while traveling and that, so far, their needs have been unmet by today’s hotel options.

To address wellness holistically, the brand is prioritizing four areas: eating, sleeping, exercising and working. Menus will focus on organic and fresh ingredients for nutritionally balanced and energizing meals available all day. Properties will include an open-air marketplace and bar; signature smoothies and fresh juice; and free flavored filtered water available to fill up and take back to the room. While specific examples are not yet available, it’s likely that the brand’s food and drink program will provide balance and options — after all, Even will be serving alcoholic beverages alongside its fresh juices.

The properties will also strongly focus on the ease of incorporating exercise during stays. Guestrooms are designed for in-room workouts with amenities including a fitness wall and exercise balls. The hotel gym’s spacious, bright look will lure travelers from their rooms and into its dedicated cardio, strength training and mat exercise areas as well as group exercise activities. Even properties will also feature a “Wellness Wall” for team members’ fitness recommendations and tips. Guest service will also incorporate fitness — personalized advice on fitness options is one unique perk offered by the brand.

Unlike fitness-focused hotels, the brand’s approach to health prioritizes a sense of peace and rest. Guestrooms aim to relax and revitalize by design, featuring natural fiber, high thread count linens, naturally derived bath products, glass-enclosed showers with hand-held showerheads, calming LED lighting on dimmers and antibacterial wipes.

It’s not a destination spa though, and the Even Hotels brand hopes that its customers will be in the right mindset to achieve great work. Eliminating unnecessary stress, Even properties are enabled with fast, free, high-speed Wi-Fi Internet, multimedia ports, easy access to outlets, ample desk space and social spaces throughout the hotel.

Hualuxe Hotels & Resorts
IHG, which entered the Chinese market in 1984, is already the largest international hotel operator in China with more than 160 hotels across 60 cities. Hualuxe Hotels & Resorts, also launched in 2012, is part of IHG’s greater strategy to grow market share in China with 15 Hualuxe properties in the pipeline. The first property is expected to open by 2014.

Identifying the emerging trend of Chinese consumers turning to products and services with international provenance but pride in China, IHG sought to create what it calls another industry first: an upscale, international brand tailored to the tastes, traditions and sensibilities of Chinese consumers, specifically business people who are going global. The hotel experience will incorporate the philosophy of Yin and Yang, Chinese etiquette, the importance of rejuvenation, status recognition and access to spaces that reflect local customs and heritage. IHG projects that in the next 15 to 20 years the brand will be in more than 100 cities in China, and it may eventually get rolled out to major cities outside of China so Chinese travelers have a homegrown hotel option.

Hualuxe is further proof of IHG’s investment in profitable markets and preferred brands that evolve to meet changing client preferences. And if IHG is meeting clients’ needs, then it’s meeting agent needs as well.

“Agents don’t need to go anywhere else,” said Rubinacci.

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