IHG seeks broader visibility

Hotel & Motel Management, March 1, 2004 by Jeff Higley

Los Angeles -- Steve Porter knows his mission.

Porter, president of the Americas for London-based InterContinental Hotels Group, said that because of multiple name changes during the last few years (Bass Hotels and Six Continents Hotels & Resorts), the company remains an unknown entity in many U.S. financial circles.

"The biggest challenge we have is to get the company more broadly recognized in financial discussions in the [United States]," Porter said during January's Americas Lodging Investment Summit. "When large companies are brought up in discussions, we find that we're often left out of the conversation because of the location of our headquarters and the name changes. We're on the road to address these issues."

Porter said stability and action are the key elements that will bring IHG to the forefront of financial discussions. The addition of the Candlewood Suites brand last year, the launch of a new prototype for the flagship Holiday Inn brand, continued attention to technology and adding to the InterContinental brand portfolio help give the company stable footing.

"I'm pretty pleased with our brand position," Porter said. "I'm more interested in improving our InterContinental brand distribution [than adding another brand to the portfolio]."

During January, IHG announced a plan to make high-speed Internet access a brand standard at its 2,500 InterContinental, Crowne Plaza, Holiday Inn and Holiday Inn Express properties in North America by 2005. The amenity exists at its 72 Staybridge Suites properties.

A vital platform for the company's successful future is to replace 50-year-old outdated Holiday Inn properties with the new prototype, according to Porter and Kirk Kinsell, senior v.p., Americas franchising and business development.

Kinsell expects the Holiday Inn pipeline to grow quicker once developers get a good look at the new prototype. Diplomat Hotels recently opened the first new HI prototype--the 143-room Holiday Inn Gwinnett Center in Duluth, Ga.

"We're trying to rejuvenate the Holiday Inn brand, so we're telling owners of outdated properties whose contracts expire in the next three years what our plans are so they can replace themselves," Kinsell said. "They'll have the first option to build a new Holiday Inn. Fifty percent of them are saying, 'How dare you say my child is ugly,' and the other 50 percent are saying, 'Thank you for helping me plan. Let's talk.' A third of those will rebuild."

Of the 77 new Holiday Inn deals in the pipeline, 30 are the new prototype, according to Mark Snyder, senior v.p. of brand management for Holiday Inn Hotels & Resorts, North America. The balance of the pipeline is for various brand extensions such as Holiday Inn Select and Sunspree by Holiday Inn.

"If we can sign 45 more this year, that's the kind of momentum that we need," Snyder said.

The prototype costs about $72,000 per room to build (excluding land) and can be expanded to as many as 200 guestrooms, and includes the Holidome indoor-pool concept.

"The 143-room setup is the right size--it takes up about two or two-and-a-half acres," Snyder said. "When you put a hotel that size in a market, it makes an impact, but it's not overdone. Gone are the days of the sprawling Holiday Inn properties."

The prototype includes Kemm's Cafe, named for Holiday Inn founder Kemmons Wilson. An electronic menu is housed on an 8-inch-by-10-inch computer pad. Wireless technology allows guests to order without the aid of a server, although one is available.

The brand is reconnecting with its past by introducing the "great sign"--a sign that is reminiscent of the ones that stood in front of Holiday Inn properties from 1952 until the mid-1980s. Snyder said it's been 21 years since former HI president Mike Rose changed the sign, and Snyder said it's time to tinker with it again.

"We're going to get customer reaction and franchisee reaction, but we want to reconnect with the legacy and be proud of what we are," Snyder said.

Extended-stay update

The acquisition of Candlewood and the continued progress of the Staybridge Suites brand give IHG a foothold in the extended-stay segment. During February, Gina LaBarre was named v.p., brand management for Candlewood. Porter said IHG considered Jim Anhut, senior v.p. and brand manager of Staybridge Suites, to head Candlewood, but wanted to stay true to a corporate philosophy.

"We believe in a brand management philosophy that's champion led," Porter said.

Porter said the company kept Candlewood's sales organization and quality-assurance program intact. "We're focusing on understanding the growth strategies of the current Candlewood franchisees," Kinsell said. "Then we're going to offer it to our other franchisees, then go to new parties.

"It's reasonable to think that the size of the Candlewood brand could be doubled within three years," he said. "We've got a long way to go before we're tapped out."

Candlewood Suites properties cost between $40,000 and $45,000 per key (without land) to build.

jhigley@advanstar.com