Less than a year after introducing a new
brand in the midscale segment, InterContinental Hotels Group is looking to
grow its stable of brands further, this time in the upscale and luxury spaces.
IHG CEO Keith Barr, who took the helm of the organization in
July, said research about its guests indicates consumers are looking for
"something other than the big-box upscale hotel." The executive
described the planned upscale offering as something "informal and differentiated,
combined with the reassurance and quality standards of a branded chain."
Barr didn't share the name of the new brand, which he
announced during the company's earnings call on Tuesday, but said it will
launch this year as a conversion brand, first in its Europe,
Middle East, Asia and Africa region and later in its other two regions.
According to STR, IHG already has three upscale brands: Even Hotels, Hotel
Indigo and Crowne
Plaza. However, Barr said the $40 billion upscale segment is expected to
grow 50 percent during the next 10 years. The conversion aspect with "limited
upfront capital outlay," too, makes it a differentiator for owners.
IHG also will form a dedicated luxury division to help its
existing luxury brands evolve and to allow IHG to revitalize any luxury brands
it might acquire. "We see a real opportunity to round out our portfolio
and add other luxury brands at a price point above InterContinental and
potentially also in the resort space," Barr said. The company will look to
acquire "one or two small, luxury, asset-light brands" that it could
"incubate and grow," according to Barr.
He said the $60 billion global luxury segment is expected to
grow by more than 50 percent within the next 10 years. Growing IHG's footprint
in this segment, Barr said, will add "halo benefits" that include
strengthening its IHG Rewards Club program and attracting more B2B customers.
The company has some recent practice in brand
launches. Since IHG announced the midscale Avid brand in October, it has signed
75 hotels into the pipeline, all in North America. "Avid sets the perfect
example of how we, over a short period of time, identified the unique
opportunity, engaged potential owners, developed a successful concept and brought
it to market," Barr said.