IHG Creates New Upscale Hotel Brand

InterContinental Hotels Group yesterday announced it was establishing a brand called Hotel Indigo. The first property will open in Atlanta, where IHG's U.S. headquarters are based, by year-end. The upscale brand will be positioned below the company's existing upscale brand, Crowne Plaza, but above Holiday Inn, its midprice with food and beverage offering. With 140-rooms, the Atlanta Indigo is significantly smaller than a typical Crowne Plaza

The move shows the continuing stratification of the hotel business as suppliers try to provide a niche for every customer category, especially business travelers, based on type of trip, personal preferences and budget. Hotel Indigo is IHG's seventh brand. It is a lodging model that Marriott International evolved in the early-1990s.

Stevan Porter, IHG president of the Americas, described Hotel Indigo as a lifestyle brand intended for travelers "who desire an experience as much as a destination." While he did not use the term "boutique," much of the language is similar. The most successful launch of such a brand by a multi-brand company has been W Hotels, which Starwood Hotels & Resorts Worldwide debuted in 1998 at the upper upscale price point. Since then, upper upscale Le Meridien stumbled when it began repositioning its hotels in a more boutique, Art&Tech style in 2001. Marriott International in 2001 announced it was launching a deluxe lifestyle brand in partnership with Bulgari, the Italian luxury goods maker. The first Bulgari Hotel opens next month in Milan.

Hotel Indigo primarily will focus on conversions as opposed to new construction. IHG declined to project how many properties would open in the next few years. The company's overall portfolio comprises more than 3,500 hotels worldwide.