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To paraphrase The Sugarhill Gang, IHG has decided to focus on its mid-range hotels and motels — like Holiday Inns. (Which begs the question: How is this different from the status quo?)
Plus, hotel workers may receive their COVID-19 vaccinations sooner than originally expected.
Those were some of the day’s travel headlines that caught my eye. I thought you, too, may find them interesting.
Midscale Hotels Are the Future of IHG?
While IHG is the flag for InterContinental and, most recently, Kimpton and Hotel Indigo, Skift reports that the company will “focus on non-luxury brands.”
Considering that over three-quarters of its portfolio is made up of hotels such as Holiday Inn, Staybridge Suites, etc., I thought they were already doing that.
But it seems those brands will get more of corporate’s attention.
Cameron Sperance writes:
… [C]ompany leaders maintain their brands of hotels like Holiday Inn that typically lack full-service amenities like a sit-down restaurant will reignite the expansion trajectory. Hotel owners will prefer to run lower-cost, high-margin properties during the recovery, the thinking goes.
But as development interest returns, IHG leaders see a bulk of demand in its middle-market brands. Owners like this sector, as hotels are generally cheaper to build and operate at higher margins because they don’t have amenities like a spa or restaurant.
Only 4 percent stems from IHG’s luxury portfolio of brands like InterContinental.
I’m not bagging on IHG. I usually stay at its hotels several times a year. And most of those nights are spent at Holiday Inns or Holiday Inn Expresses. I know the company isn’t known for luxury — and I certainly don’t expect it when I stay at Holiday Inns (or similar properties).
Hearing IHG wanted to spend more time on those brands, though, raised an eyebrow. To me, it sort of sounded like Dominos rededicating itself to pizza over wings and pasta.
Elsewhere:
Hotel workers may soon receive a shot in the arm — literally.
Plane engine that caught fire on United Airlines flight over Denver has troubled history
Blockchain, QR codes and your phone: the race to build vaccine passports
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I always associated Holiday Inns with two types of travelers:
1) leisure travelers on a slight budget
2) non-executive business travelers
Post-covid, I don’t expect there to be as many low-ranking business travelers. I don’t know why IHG thinks these are the customers to go after during the recovery.
Maybe, they’re banking on leisure travelers opting to drive long-distance instead of flying. In which case, all their random hotels on the side of the interstate might become lucrative. That’s the only logic that makes sense.
Thanks for the comment. I wouldn’t be surprised if it’s both people who drive as well as families who fly. Perhaps the families take a trip to a destination like a Disney or Universal — but don’t want to stay onsite because the parks are so darn expensive in the first place.
Even before the pandemic, there are often very good returns to be made on a thoughtful limited service hotel concept. Germany’s Motel One had crazy high margins for a ‘budget design’ concept where in most cities room rates were under 100 euros a night. Hilton’s Tru and IHG’s newer avid brand seemed pretty obvious attempts to americanize the Motel One concept.
The latest generation of Holiday Inn Expresses also goes for a more modern look and remember that all of the big players largely franchise these days and it’s a lot easier for IHG to get investors to go for a ‘HIX n a box’ where you can pick from a number of stock floor plans IHG has for that brand and predictable and somewhat modest construction costs than it is to find someone willing to bite on a luxury property that might cost ten times as much to build or convert but won’t bring in ten times the profit as the HIX in a box.
I love the “HIX” term!