- Which of IHG’s brands will be a focal point in 2020?
There are important plans in place for all our brands in 2020. Over a number of years, we have carefully grown our portfolio in high-quality markets and segments, making sure that each brand offers something different for our guests and third-party hotel owners.
Picking out a few specifics, we have fantastic new room and public space designs going into our Holiday Inn Brand Family hotels in Europe and across our Americas business, which are delivering richer guest experiences and stronger returns for owners. There’s also some great work happening with Crowne Plaza to ensure we best serve today’s modern business travellers, which we’ve showcased through new flagship properties in cities such as Hamburg and Paris.
One particularly exciting development has been the momentum we’ve seen behind our new upscale conversion brand voco since its launch in July 2018, which now has 33 signings across 16 countries in our Europe, Middle East, Asia and Africa region. It’s a highly flexible brand, looks great, and is proving really popular with guests and our owners, with lots more deals in discussion.
voco is one of five brands we have either launched or acquired since late 2017, so there’s lots of work happening to make sure we capitalise on the excellent growth potential we see for each one. Six Senses is one of those brands, which we acquired in 2019 to round out our offer at the very top end of luxury. This is a world leading brand in wellness and sustainability with an award-winning estate, and we have already added to that with some excellent signings including London, the Loire Valley and the Galapagos Islands.
- Do you think there are too many hotel brands across the industry?
It’s a good question and one we get asked a lot. We’ve seen all the major players bring new brands to market in recent years, with strong take-up. There are probably three reasons for that.
Firstly, consumers are increasingly favouring stays with branded hotels – whether that be for the breadth of choice, greater consistency, or for loyalty points and rewards. Secondly, for owners, this is a really attractive industry that is consistently driving significantly high returns on their investment. And thirdly, there remain gaps in high-growth markets where consumer needs aren’t being met or there is appetite for something a bit different.
I think for IHG, we have grown in a very strategic way, repositioning our portfolio across mainstream, upscale and luxury to fill gaps in our offer and create a more comprehensive range for both guests and owners overall. We’re seeing that play out successfully in a number of ways; from strong take-up of new brands and a more attractive loyalty programme for our members, to lots of interest from new and existing owners in building a more varied hotel portfolio with us.
The trick is to ensure that new brands are distinct, relevant and competitive for both owners and guests, and that in parallel you are prepared to evolve and enhance your entire portfolio over time, in line with changing expectations and new technology. A great example of that is our Holiday Inn Brand Family. This is one of the most iconic brands in the world, but that’s not enough on its own. We continue to consistently invest in enhancing the brand family, and as a result demand remains strong with a record level of openings in 2019. The same can be said for InterContinental Hotels & Resorts, the world’s biggest luxury hotel brand, which is still growing strongly alongside important renovations that will keep our existing estate fresh and modern.
- All hotel companies have a footprint in the communities they operate in. How do you view your responsibilities in that space as a global business?
Our purpose at IHG is to provide True Hospitality for everyone, which includes the thousands of communities we operate in. As we continue to expand our business at pace around the world, ensuring the actions we take help us grow in the right way is vital. This is a topic we’re discussing with an increasingly broad set of stakeholders on a much more regular basis. Our colleagues, guests, hotel owners, suppliers, investors and partners all expect companies to make sustainable choices and use their scale as a force for good; and that’s absolutely how we see it for IHG.
At an operational level, we have systems in place to help our hotels manage their energy, waste and water. We have also made important commitments around issues such as plastic, including eliminating plastic straws and becoming the first in our industry to commit to switching all hotels from bathroom miniatures to bulk-size products. We use an average of 200 million of these tiny products a year, so this move will significantly reduce our waste. We are also seeking ways to build more sustainable practices into our brands, such as more efficient hotel builds or using bedding made from recycled plastic bottles.
But when you think of our scale, we know we can go much further, and so we are always looking to identify opportunities to work with specific hotels and industry partners to trial new innovations. It’s also very important to us that we show our local communities what a great career you can have in hospitality, so we work with young people and those from disadvantaged backgrounds to build skills and boost job prospects. We do that through programmes like our IHG Academy, or with partners such as Junior Achievement Worldwide. Last year, we also introduced two days additional paid leave for corporate colleagues to volunteer for causes that are close to their heart.
Our global reach means that our hotels can sometimes be located in areas where natural disasters hit, so we also work with charities to provide assistance to local people and our colleagues, and to support disaster preparedness efforts.
- What are some of the challenges facing the hospitality industry?
Hospitality is a people business. But as the industry continues to grow, it becomes more competitive to attract the right talent, whether that is for a GM role, front desk, kitchen or housekeeping. Having spent more than 25 years working in the hotel industry, starting in kitchens, I’m passionate about the opportunities a career in hospitality can afford, but I think as an industry we could still do a better job of telling that story.
A key part of that has to be ensuring our culture reflects the type of industry we want to be. At IHG, I chair our Diversity & Inclusion Board, which we created to make sure we are open and transparent about where we are today, and what we should prioritise. That includes having more women in senior leadership roles, greater diversity among our teams, flexible working programmes, support for colleagues with disabilities, and expanding employee networks that provide workplace diversity for communities like LGBTQ, Baby Boomers and GenXers. These are topics regularly discussed on the agenda of both our Board and senior leadership team.
It’s steps like these that keep us diverse in our make-up, our thinking and our approach to create equal opportunities for everyone. We know we also need to engage with young people much earlier. I mentioned our IHG Academy programme and excellent partnerships like JA, which through our First Look programme is giving people invaluable work experience opportunities and helping inspire a career in our industry.
We definitely still have more to do as a company, but as an industry we need to be asking ourselves: Are we diverse enough? Can anyone from anywhere make it to the top if they have the right drive and talent? The talent of tomorrow is judging us on criteria such as this, as part of the decisions they make on where to start a career. Given the pace at which our industry continues to grow, we have to make sure we represent an authentic and attractive proposition.
Keith Barr will be In the Room and participating the global CEO panel discussion “Re-Defining Hotel Performance” on Tuesday 4th March at 10:40. In this session, CEOs of some of the largest global brands will discuss their views of what is performance in today’s hospitality, and their strategies to achieve it.