Some of the major international destinations have been re-opening to welcome foreign travellers. Which are the challenges which you have been encountering? What about opportunities?
Travel is still a huge part of life, and people’s desire to explore the world, relax and visit friends and family hasn’t changed, businesses must remain on the move and events still need to be run. That said, we know the shape of recovery still differs by market and even by city. Despite all the challenges of this pandemic, our owners continue to share our confidence in our brands and markets, opening another 285 hotels in 2020 and signing one new property almost every day.
In the first six months of 2021, a further 132 hotels opened, and we signed another 203, putting our share of the industry pipeline at 11%, versus 4% of current supply. A key strategy for the business has been the growth of our luxury and lifestyle brands; taking us from InterContinental Hotels & Resorts as the keystone of our luxury portfolio, to the acquisition and subsequent growth of Kimpton, Regent and Six Senses, bringing Hotel Indigo into the fold as part of our Luxury & Lifestyle Collection and, most recently the launch of Vignette Collection.
We’re now the number two player in the luxury market in our sector and people are really paying attention to the breadth, depth and distinction of our offer for our guests and what we offer as IHG Hotels & Resorts.
How is IHG positioned to weather these challenges?
A big part of our success relies on the love and trust our guests and owners feel for our brands. We have introduced six brands in the past four years and expanded our portfolio to 17 – some of them world-famous and industry-leading, others gaining greater attention, and newer ones starting out with exciting growth ahead. Underlining their appeal, the growth of our estate prior to Covid-19 was rapidly accelerating, with 2019 marking a record year of openings. As the industry recovers, our focus remains on expanding at pace around the world, taking each of our brands from strength to strength by investing in quality, design, service and technology.
After a year quite like no other in 2020, we evolved our purpose in 2021 from True Hospitality for everyone, to True Hospitality for Good. We did this because, as we committed to doing the right thing for IHG, one another and those around us in response to the Covid-19 pandemic, we saw the power of acting with purpose and ensuring we grasp opportunities to effect positive change.
We know that how we emerge from the recovery will help shape our industry and our planet in the years to come, so we’re committed to ensuring our response recognises the many environmental and societal challenges that existed before the pandemic and will persist afterwards. Earlier this year we launched Journey to Tomorrow, a 10-year action plan of clear commitments to drive change for our people, communities and planet, aligned to our purpose of True Hospitality for Good and to the UN Sustainable Development Goals.
What about dynamic of brand communications strategies? – flexibility and adaptability to the predominantly unpredictable context.
Firstly, alongside early laying out our cleaning protocols, we ensured that those guests who were still able and needed to travel had great flexibility. We continue to adapt to the changing market and consumer demands.
We were already looking at how IHG and its brands were perceived as we headed into 2020 and we were able to invest time during recovery to these ends. In 2021, we changed from IHG to IHG Hotels & Resorts, making it absolutely clear that we’re a hotel company with a fantastic family of brands to explore. Whether on screens, billboards or in magazines, our masterbrand is now working harder for us wherever it shows up, standing out through sharper marketing, building brand preference, and capturing more demand for our hotels and owners. Since launch, our new look and feel has been described as “bold”, “fresh” and “inspiring” by colleagues, consumers, owners and media.
Marketing campaigns have gone live across many of our biggest markets, and in our hotels we are working with our owners to find thoughtful ways to update different collateral whilst ensuring not to create any unnecessary costs or pressures as the recovery continues. In line with local restrictions, we’re also running targeted marketing campaigns and promotions across different regions, including Stay Longer and Save discounts and special offers to drive more high-value business from our IHG Rewards members.
We also recognise the importance of an integrated approach, and our marketing model gives us both strength and agility; the skills and experience of our team has meant we’ve been able to move fast and pivot where necessary to deliver some amazing success stories for our brands and hotels in what has been, at times, a really challenging market.
Many hotels still operate partially. To what extent is there also a pressure on rates? Is there a potential negative impact on your brands?
Where we have hotels that have yet to open all their rooms or are operating with reduced meal periods in some restaurants, for example, we are careful that we are still able to ensure the same level of service, thanks to increased and smart usage of new training programmes which we are continually adapting to ensure new team members understand how to deliver the service expected for our different hotels and brands.
A combination of effective technology solutions and incredible revenue experts at hotel and brand level mean that we continue to offer competitive dynamic pricing which offers value but means we don’t have to sacrifice our guest experience. We are actually seeing rates at pre-pandemic levels or even above, in many locations, where demand in key holiday periods has been particularly high and there is a want for the kind of service that we can assure guests of, even in these challenging times.
To what extent do you foresee a recovery of corporate travel? Which has been your approach in terms of still targeting the corporate consumer segment?
Throughout the pandemic there were many businesses which still relied on travel and we were able to support them, and their people, keep them safe and offer a warm welcome. We continue to believe in the long-term value of all travel, including business travel. With destinations opening up and businesses wanting to get colleagues back together to rebuild strongly, relationships will continue to be key.
While travel’s recovery has been largely powered by leisure, business travel has quietly resumed. In August, we released financial results for the first half of the year and, among the findings it was notable that major companies are focusing on destination-driven corporate gatherings versus large-scale conferences and events. In the US this year, Chicago, Phoenix, Philadelphia, and Atlanta have seen the most groups & meetings business. Shanghai, China, rounds out the top five cities as urban markets continue to drive recovery in China. In Europe, Paris, Berlin, and Munich are also seeing a revival in groups & meetings business with the entertainment industry leading bookings alongside government/military, transportation, and media and publishing.
Has the perception of luxury changed? Do guests have different expectations? What about the desirability factor?
The definition of luxury travel is as varied as the guests who come through our doors. For some, it’s all about making connections – with others, themselves, nature, and for others, it could be about discovering news destinations and culture. We are continuing to build and nurture an unrivalled portfolio of leading brands, innovating and finding new ways to help people connect, celebrate cultures and experience the world. As we grow our Luxury & Lifestyle collection, we’ll accelerate our growth and meet increasing appetite from Luxury & Lifestyle travellers for one-of-a-kind stays, backed by the reassurance of IHG’s trusted reputation and leading loyalty offer.
The founders of brands like Kimpton and InterContinental were pioneers in the field, and we’ve taken that spirit and built upon it through the years, moving and evolving to anticipate the needs of our guests and to stay ahead of the competition. This year is the 75th anniversary of the InterContinental brand, and we’re celebrating in the true spirit of the brand, by offering exceptional experiences and continuing to open beautiful hotels in inspiring destinations to the modern luxury traveller. The rise in luxury travel ahead of the pandemic was being driven by travellers being more inclined toward unique experiences that demonstrate their worldliness.
The affluent guest wants to be a traveller, not just a tourist, which means seeking experiences that can’t be found in a guidebook and give them a chance to meet the locals etc. This is what we have always strived to do and this, and the people who help us deliver it so spectacularly, is why guests and owners keep coming back to us. In Europe we have opened Kimpton St Honore to tremendous success and we recently signed InterContinental Resort Canj – Montenegro – a destination that continues to grow as a luxury centre, where we already operate the Regent Porto Montenegro. In Asia we are opening Regent Phu Quoc and Regent Bali Canggu next year.
What about development? Are you seeing any specific trends in terms of new luxury branded properties?
Nestled within our exciting and fast-growing hotels and resorts portfolio is a world-class branded residences offer designed to benefit the world’s very best backdrops – everything from the super-yacht marina of Regent Porto Montenegro and the idyllic island retreat of InterContinental Phu Quoc Long Beach Resort, to the breathtaking tropics of Kimpton Seafire Resort + Spa. IHG has more than 400 Luxury & Lifestyle hotels and resorts globally, with almost 50 world-class residences open or in our pipeline, and we’re adding more outstanding properties all the time to meet pent up demand in the world’s most sought-after urban and resort destinations.
Resorts also present a significant opportunity – especially as guests are looking to be surrounded by more space and nature. Our collections vary from family offerings in popular destinations to emerging locations where a smaller, more intimate product is required.
While still being exclusive, luxury is no longer just an expensive possession or pure opulence. Instead, less is more in the travel industry today as people are looking to escape their hyper-connected and stressed environment in favour of meaningful, out-of-the-ordinary experiences, whether that means fresh air, waking up to birdsong, pioneering wellness, homegrown food or immersing in the local culture and community. As some guests look likely to continue to wish to disconnect when staying with us, we are factoring in the need for even more space in future builds and construction projects which also highlights the continued popularity of our Suites offering.
The acceleration of digitisation and mobile solutions will be one of the legacies of the pandemic. Ensuring seamless and flawless luxury service now requires a carefully crafted balance of technology and humanity. We’re bringing in new tech, but always want to ensure that technology is enhancing and simplifying an experience but never taking away from the need for human safe interaction, warmth and personalisation.
We have designed the hotel room of the future, partnering with Josh.ai, to create a voice-controlled smart room at the Kimpton Rowan hotel in Palm Springs, CA. IHG is the first global hotel company to deploy Josh.ai – which builds upon its award-winning presence in the world’s most advanced residential properties – and is the only AI on the market committed to privacy, data security, and natural interactions with connected living spaces. It explores the potential of guest interaction with their environment and employs connected devices that are borrowed from luxury smart homes across the globe.
Kimpton has been expanding outside the U.S. with more upscale positioned properties.
International growth has been a key focus for IHG Hotels & Resorts since acquisition of the Kimpton brand in 2015. The opening of Kimpton De Witt in Amsterdam in 2017 marked the first Kimpton outside the US. Since then the brand has grown significantly to a total of 24 signed and opened hotels outside the US. Most recent milestones include the signing of Kimpton Mallorca last year and the openings of Kimpton Vividora Barcelona and Kimpton Clocktower in Manchester, UK in 2020, as well as the recent opening of Kimpton Paris St. Honoré in the vibrant Parisian Opera district.
Tell us more about Vignette, the most recently launched brand by IHG.
We launched Vignette Collection, our new Luxury & Lifestyle collection brand at the end of August with two properties: Hotel X, a five-star hotel, dining and lifestyle destination in the centre of Brisbane’s Fortitude Valley, Australia; and The Aquatique hotel, a vibrant property in Pattaya, Thailand. Vignette Collection complements both our voco conversion brand in the upscale space and our existing Luxury & Lifestyle portfolio, which already spans more than 400 hotels and 100,000 rooms.
As a collection brand, it appeals to owners of world-class independent Luxury & Lifestyle hotels seeking to quickly benefit from IHG’s powerful technology and revenue systems, operational expertise and loyalty offer, without the need for high upfront costs or compromise on a property’s unique character, style or name.
With conversions growing to represent a quarter of our signings in the past 18 months, there’s a clear opportunity to go even further with Vignette Collection, which will operate in a market worth more than $100bn, and where there are currently more than 1.5 million independent rooms. We expect to see the estate grow to more than 100 hotels over the next decade.
Are guests still concerned about the safety and hygiene measures taken at your properties to counter Covid-19?
The Covid-19 pandemic has made cleanliness a top priority for our leisure guests and business customers, and while the safety and wellbeing of those who stay with us has always been important, all of our hotels are delivering an enhanced IHG Way of Clean programme.
We remain focused on what matters most: ensuring clean and safe hotel stays; helping our owners navigate local market challenges and capture demand as conditions improve; and continuing to invest in our brands, technology and loyalty offer to help IHG excel as the industry returns to full strength.
Do you see newly opened or newly renovated properties as boasting an advantage in perception, nowadays?
Many of us are looking forward to planning those epic adventures which were put on ice for so long. People are still craving the new and unknown, perhaps more than ever, keen to experience something unique. Hotel design and experiences continue to evolve and our guests want to stay ahead of the curve. Our upcoming openings will not disappoint.
InterContinental Barcelona will offer three destination restaurants and bars and a luxury spa, on the site of what was the Crowne Plaza Barcelona. The hotel is undergoing a complete transformation to align with the InterContinental brand’s aesthetic of discreet luxury and global sophistication. We’re especially excited to unveil the 180m² Presidential Suite and 17 junior suites.
Rome is one of the world’s most visited destinations where we have not one but two incredible openings there next year; both in key locations and both with incredible history. Six Senses Rome will open in early 2022, set around the Palazzo Salviati Cesi Mellini on Piazza di San Marcello. It was built in the 18th century by Tomaso De Marchis, who adorned it with windows representing the epitome of Baroque motifs for Cardinal Mario Mellini, the palazzo was protected by the Roman municipality and UNESCO-listed.
InterContinental Rome Ambasciatori Palace is set to open in late spring 2022 on the iconic Via Veneto in the Ludovisi area of the city close to the Villa Borghese. The existing property will be restored to create a sense of discreet, modern luxury for visitors and locals alike with 160 rooms and suites, a panoramic rooftop, restaurant, bar, and a spa. Designed in the early 1900s by architect Carlo Busiri Vici in the neo-renaissance style, the palazzo building was originally home to ambassadors staying in Rome.
We have three key openings in the next 6 months for InterContinental in Middle East and Africa – a really important growth market for us, with InterContinental Luanda Miramar, makes its debut in Angola as the first Internationally branded luxury star hotel; InterContinental Ras Al Khaimah Mina Al Arab Resort & Spa welcoming guests to the U.A.E.’s northernmost Emirate, covering an area of 43,770 sqm on a headland surrounded by protected coastal wetlands; and InterContinental Durrat Al Riyadh Resort & Spa, located within the distinguished neighborhood of Banban, Riyadh and boasting on 154,000m² of lush green oasis.
In Asia, we’re bringing the Regent brand to Vietnam. Regent Phu Quoc will open next year along the pristine white sands of Long Beach with views of the calm waters in Bai Truong’s Phu Quoc Marina, off Vietnam’s southwest coast. Also in Vietnam, InterContinental Grand Ho Tram will offer 543 rooms, an array of restaurants and bars, spa, a multitude of retail stores and direct access to Vietnam’s top golf course – The Bluffs. Our second Kimpton property in Thailand – Kimpton Kitalay Samui will be one of the first two resorts to open under Kimpton Hotels & Restaurants in South East Asia alongside Kimpton Naranta Bali, on the southeastern corner of the island, alongside Nusa Dua beach, also coming soon.
It’s also a big moment for us in Australia, with our first Kimpton there – Kimpton Sydney – opening later this year, with 172 unique, design-led rooms and suites in a heritage-listed 1930s Art Deco revival of inter-war period architectural wonder. Further south, outside Melbourne, InterContinental Sorrento Mornington Peninsula (formerly Hotel Continental) will have a new, luxurious lease on life when it opens in March 2022.
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