DURHAM, England—Executives at InterContinental Hotels Group during an earnings call Tuesday unveiled further details about the launch of the company’s previously announced brands.
The first new brand will be an upper-upscale product tailored to the Chinese traveler. The second will be a midscale offering primarily focused in the United States, for which IHG will invest up to US$150 million during the initial three-year launch phase.
Both brands will launch during the first half of 2012, said CEO Richard Solomons.
“We know that branded hotels appeal to guests,” he said. “This is why big, branded players like IHG have been winning and will continue to win market share.”
CEO, InterContinental Hotels Group
Solomons didn't provide any further information, including the names of the new brands.
The new offerings represent IHG’s continued focus on preferred brands, which Solomons said are “critical to IHG’s success and our ability to drive growth in market share.”
The company’s relaunch of the Holiday Inn and Holiday Inn Express brands, for example, are still yielding dividends in terms of higher revenue per available room, increased guest satisfaction and more interest from investors. The company signed 32,477 new rooms in the Holiday Inn brand family during 2011, compared to 55,424 total rooms system wide, according to company earnings.
Holiday Inn and Holiday Inn Express have RevPAR premiums to the upper-midscale segment of 4 percentage points and 9 percentage points, respectively.
IHG executives are now taking a similar approach with the repositioning of the Crowne Plaza brand. The first phase is underway and involves tackling issues of consistency and quality throughout the system, Solomons said. The company already removed 11 properties that were below standard and plans to remove another 30 within the next few years.
The next phase will call for IHG to infuse capital to get Crowne Plaza into the right locations, building brand awareness and showcasing it properly, IHG’s chief said. During the third and final phase, IHG will unveil new brand hallmarks; the announcement is scheduled for the first half of 2012, with roll out to follow in 2013 and completion during 2015.
“The long-term outlook for the branded hotel industry remains very strong,” Solomons said. “We will exploit this by continuing to deliver high-quality growth.”
During the call, CFO Tom Singer also shared some news about the pending sale of the chain’s iconic InterContinental Barclay in New York.
“We have negotiations under way with a potential buyer for the property in New York, and we’ve granted them exclusivity. … I would infer from that it’s positive we have an interested party and negotiations are progressing.”
During 2011 IHG completed the disposal of Hotel Indigo San Diego, Staybridge Suites Cherry Creek in Glendale, Colorado, Holiday Inn Atlanta-Gwinnett Place in Duluth, Georgia, the Holiday Inn Express Essen in Essen, Germany lease and a hotel asset and partnership interest in Australia. Proceeds from these sales totaled US$142 million, which was 22% above book value.
IHG finished 2011 with a 6.2% increase in RevPAR and an 8% increase in revenue to US$20.2 billion.