After the spectacular opening of the InterContinental Marseille - Hôtel Dieu, IHG is still considering France one of its primary markets with more openings to come.

After years of relative pause in hotel development, do you feel that investors’ dynamism bounced back for the financing of new hotel projects?

The hospitality industry is constantly evolving and adapting to its changing environment which is driving investment in the hospitality industry. In Europe the return on investment in hotel assets is almost one per cent higher than on office assets over the past decade (2012 IPD index) which reflects the keen interest in our brands by the real estate community. Our Hotel Indigo brand for example lends itself well to office conversions.  

Our European strategy is clear; it is a resilient fee-based business model with a favourable geographic mix. We have a priority market and key city strategy; and Paris, Marseille and Lyon are all key cities for us. Our focus on future growth is underpinned by a high quality global pipeline and favourable industry dynamics.

 

Does the time scale for a project development be extended because of land, administrative & regulatory obligations?

It really depends on each development. In Europe IHG works with a team of highly skilled architects, engineers and specialists who provide expert assistance to owners from a hotel’s inception right through to its opening. We can offer advice on everything from the initial site selection right through to room and interior design. We rely on a full team and a wealth of experience to reduce and prevent delays.

 

Do you have the ability to shorten these delays or alleviate the constraints based on your experience and tools available for investors?  

Our expertise in managing hotels currently spans over 700 properties across the globe (as of 31st December 2013). We know how to run hotels to maximise the benefits for both our guests and our owners. Owners benefit from the robust IHG booking system Holidex and our loyalty programme IHG Rewards Club, the first and largest hotel loyalty programme with over 77 million members worldwide.

We are leaders in valorising properties for owners who benefit from a highly effective support network for franchised hotels and a real voice at the table through our IHG Owners Association.  The fact that the decision to offer free Wi-Fi in UK Holiday Inn Express hotels was owner-led demonstrates how powerful this partnership is for us.

 

Has the level of confidence in a hotel brand climbed up a notch after the crisis of 2009 and its impact on the market?

Building preferred brands is definitely the way forward. We need to keep brands relevant and differentiated to ensure that the promises our brands make - and the guest experience they deliver - evolve to meet the changing needs of travellers. We have just launched a new Holiday Inn Express campaign in the UK and Germany that embodies the brand’s ethos - Simple.Smart.Spot On.  It’s all about brand building – giving guests reasons to stay with us.

In addition, we are working hard to make our booking offer ever-more compelling and give guests reasons to book with us direct; those who do so reap the benefits. We are also leveraging IHG Rewards Club more than before.  The programme was relaunched in July 2013, offering enhanced benefits for members including free internet in all hotels, globally. Our goal is to encourage our loyalty members to stay at different hotels in our brand portfolio, increasing our cross-sell revenue.

We have 14 smartphone apps for all of our brands and for IHG Rewards Club in English, German, French, Italian, Spanish, Russian, Turkish, Hebrew and Portuguese to name a few. In fact, Apple iTunes store ratings show that the IHG app is one of the highest-rated in the whole travel industry. And we are making our channels local – we launched our Russian website last year and also launched a Russian speaking Customer Reservation Office in 2013.

 

Are you leading the two development axes for IHG; conversion and the re-branding to your brands of existing buildings; and new construction of a new offer?

Most definitely. We choose the right type of development for the right brand in the right area and with the right owner. For example for some of our new build Holiday Inn Express hotels we have utilised Turnkey Modular Hotel Construction that takes nine months as opposed to 12-14 months for traditional construction.  The efficient design and modular approach have created a win-win situation for investors by reducing building and operating costs and maximising revenue generating space.

At the other end of the spectrum we have numerous examples where we have converted existing properties into IHG hotels.  For example the conversion of InterContinental Marseille – Hotel Dieu was a building originally constructed in the 18th century as a hospital. A lot of consideration was given to how we could enhance the building’s architectural features to deliver an outstanding result.

With all of our brands we are still careful to seek out an optimised design that truly takes advantage of the building and location to deliver the best guest experience.

 

How did you achieve it in 2013 and what can be expected on 2014?

2013 was another excellent year in Europe. We opened 21 hotels in Europe and signed 50. We opened two InterContinental hotels: the 194-room InterContinental Marseille - Hotel Dieu, the fourth for the brand in France, and the 216-room InterContinental Davos in Switzerland. Three further Hotel Indigo properties (293 rooms) were opened in 2013, comprising a third hotel for the brand in Germany and the first openings in Spain and Israel.

We signed 8 Management Contracts in 2013; more than twice the average over the last 5 years and 28 deals were signed in primary European locations such as Paris.

We opened hotels representing all six brands present in Europe within the same month (December 2013) - InterContinental Davos, Crowne Plaza Belgrade, Staybridge Suites Birmingham, Hotel Indigo Düsseldorf - Victoriaplatz, Holiday Inn Express Lisbon and Holiday Inn Nola - Naples Volcano Buono.

Our results for 2013 showed an increase in RevPAR in the fourth quarter in Europe and it feels like there is growing momentum behind the hotel industry. In France, 2014 is going to be a great year for openings. We have already opened Holiday Inn Express Dijon (85 rooms) and Crowne Plaza Lyon - Cité Internationale (164 rooms). And more are to come with Holiday Inn Express Strasbourg Centre (148 rooms) in April 2014, Holiday Inn Cannes (100 rooms) in June 2014 and Hotel Indigo Paris Opéra (57 rooms) in Q4 2014.

 

IHG group is renowned for the rigor of its standards, does it slow the pace of your development?
Our owners understand that our aim is to always deliver great quality hotels; our brand standards underpin this and we are well respected in the industry because of this approach.
Through our IHG Owners Association we engage with owners as business partners to discuss anything from sustainability to OTAs, free internet and brand standards giving them a real voice and the opportunity and capability to implement change.

 

We look forward to the opening of the first Hotel Indigo in Paris, does it open the way to other projects in Paris, Ile-de-France or regional?

We are constantly looking for opportunities in France in both major cities and regional areas. France is a very important market for us.

 

How is this new concept in Europe positioned and perceived by investors?

As IHG’s boutique brand, every Hotel Indigo property is designed to reflect the local neighbourhood. From the building’s design to the hotel’s artwork and locally inspired menus, every Hotel Indigo is unique to its surroundings. Our Hotel Indigo hotels are well received by our guests and our owners.  

 

The InterContinental Paris Marceau was presented as a 'compact' concept of InterContinental, can we expect other conversions on the same model?

We look at all opportunities on a case by case basis. Our main goal is to ensure best-in-class guest experiences in our luxury hotels across our priority markets and key cities.