The InterContinental Hotel Group, the holding company of the Holiday Inn family of brands, has announced 50,000 to 60,000 net room additions by the end of 2008. Crowne Plaza, Holiday Inn and especially Express by Holiday Inn are the key brands to sustain that ambitious objective. Robin Wicks explains.
{{HTR Magazine: Have you finalized the process of positioning your three major brands?R.W.: }} Yes, they are interesting markets. We have an Express under construction in Dubai for the moment with a local partner. With that partner we have contracted to deliver up to 40 Express in the Gulf States. The opportunity for the brand is very significant and reflects the way business is moving very fast in that part of the world. In Eastern Europe, in key cities, our prime objective concerns more Holiday Inn and Crowne Plaza because, as I said, Express does need scale.Robin Wicks: }} Our objective is to ensure that our brands can offer specific propositions to a wide cross section of hotel users, particularly in our key markets. Holiday Inn, Crowne Plaza, Express, and now Staybridge Suites clearly differentiate offerings and positioning. Obviously, consumers needs and expectations are constantly changing. Brand positioning is more a journey than a destination. We are well advanced in what I think is the most comprehensive consumer brand study ever conducted in the hotel industry. We started by focusing on our three major global markets: the US, the UK and China, and we have now extended it into France and Germany. The work is still underway and the use of the information collected will be a gradual process starting sometime in the middle of next year.{{HTR: How do you foresee the development of Crowne Plaza in Europe?R.W.: }} Crowne Plaza is a global brand, firmly positioned in the upscale segment, targeted at the business travellers. It appeals to those who appreciate "simple elegance", but it is particularly targeted at the meeting and incentive market. In our focus brand we know exactly where we want to put a Crowne Plaza, although in our business some of our development is always opportunistic.{{HTR: There are already over 40 Crowne Plaza hotels in your area, have you determined a specific objective?R.W.:}} We have a strategic plan on how many hotels of each brand we would like to have on each market by when but I am not ready to share that plan with you. What we see is that the markets tend to develop faster than one expects. We are looking for scale for Crowne Plaza in Europe, Middle East and Africa and there are a lot of opportunities to grow. We are carefully reviewing every one of them to insure that it really does fit with the brand. There is an obvious gap to fill in Europe and that is Paris. It is on top of our priority list.{{HTR:With almost 300 hotels and 45,000 rooms, does the future of Holiday Inn still look bright in terms of development?R.W.:}} We think that there is a lot of room for development for Holiday Inn. It is our prime brand. Even after fifty years of existence there is no way the brand is going to retire and it will be continuously refreshed. We even see that growth accelerating in the next five years in a number of markets, both old and new. There was an intense study on Holiday Inn for the 50th anniversary five years ago, and that work will be updated by the global study that we are conducting now. It does focus a lot on Holiday Inn and we are looking forward to the result of that.{{HTR: Could the more prestigious image of Crowne Plaza be an obstacle in the upper class segment?R.W.:}} Not at all, there is a lot of room for Holiday Inn within its own space, even though somehow brands in the same family tend to overlap. The most exciting thing about Holiday Inn is what is happening now in Eastern Europe, and globally in new markets. In the last year and a half we opened three new Holiday Inns in Moscow. These hotels are really the first modern midscale hotels in Moscow and featuring new aspects compared to the older properties in the UK or the US for example.{{HTR: Celebrating 10 years of Express by Holiday Inn development, do you still privilege the constitution of national networks?R.W:}} In the last few years we focused on building scale in the UK and being very successful in that. There is a lot of demand from owners for the product that has a reputation for delivering fantastic returns. Express does depend more on building networks in key local markets. If you look at the Four Big markets in Continental Europe, which are France, Germany, Italy and Spain, we have Express developments at various stages in those markets. But there is also a demand in the Middle East and North Africa for example. We are presently reviewing whether or not there is enough scale potential to make it worthwhile, for us and for the investor.{{HTR: Do you have any project to adapt the concept to new consumer needs?R.W.:}} The product is very clearly identified even though brands develop and design moves on. Two years ago we launched a "second generation" Express bedroom, which is implemented in every new Express in the last eighteen months. The brand is remarkably consistent in different geographies. It is actually amazing how little the Express by Holiday Inn brand needs to be adapted across different markets.{{HTR:Would you be interested in launching a new concept of hotel for conversion purposes, like you did in the US by lauching Indigo?R.W.:}}We have no plan now to roll out Indigo in Europe. Although nothing is ruled out, and clearly there are big conversion opportunities in Europe, our game right now is to concentrate on rolling out our core brands in both old and new markets.{{HTR: You have always privileged the development in franchise, especially for Holiday Inn. Do you still pursue the same strategy?R.W.:}} Our group is in the hotel branding business and our business model is focused on franchising. That is what we are good at and that is where our focus will stay. Leasing and management have always been dominant business forms of operating in Europe in particular. I think there is a move away from leasing at the moment and obviously we welcome that. In some market leases are still important and in these cases we prefer to join with an investor and concentrate on developing the brand through franchising or management, if that is what is appropriate. And then concentrate on distribution.{{HTR: Do you intend to be more active in the emerging countries such as the Gulf States and Eastern Europe? Which brand would be more appropriate?R.W.: }} Yes, they are interesting markets. We have an Express under construction in Dubai for the moment with a local partner. With that partner we have contracted to deliver up to 40 Express in the Gulf States. The opportunity for the brand is very significant and reflects the way business is moving very fast in that part of the world. In Eastern Europe, in key cities, our prime objective concerns more Holiday Inn and Crowne Plaza because, as I said, Express does need scale.
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