On the occasion of IHG’s second quarter earnings report in early August, HOTELS Magazine had the opportunity to chat with IHG’s President of the Americas Kirk Kinsell to talk about the state of business, mobile bookings, as well as plans for the recently sold Barclay in New York and the evolving Crowne Plaza brand.
In summary, IHG reported in August that RevPAR gains in the U.S. was sitting at 6.6%, led by 8.5% revenue growth for Hotel Indigo and 8.3% for Candlewood Suites. Kinsell was quick to highlight the opening of the first two Even Hotels, nine new signings for Hotel Indigo and multiple dual-branded developments with the first being a Crowne Plaza-Staybridge Suites cooperative in Atlanta.
Here are some highlights of HOTELS’ conversation with Kinsell:
HOTELS: How do you feel about the current performance report?
Kirk Kinsell: We had a good strong quarter and good start to the half yea. We are focused on driving preferred brands, trying to repurpose our balance sheet with the disposal process, using capital to build our brands, launching new brands like Even and reminding people if you took IHG as a whole we would be one of the top Internet retailers among all sectors in the U.S. These startups in the tech world in the hotel space get a lot of press, but they really aren’t all that defined yet.
HOTELS: IHG reported a 46% increase in mobile bookings. How do you account for that?
Kinsell: You account for that based on the quality of app, increased use of mobile and its reflection of consumers. The smart phone is really the replacement for the vacancy no vacancy sign. It’s a key to our priorities in terms of how digital platforms and our technology is a driver to our success.
HOTELS: What will be your next move with mobile?
Kinsell: Making it a more productive tool. As guests approach our hotels, they should be able to use it to set their arrival times so the hotel is ready for them. They should be able to link to other ways to improve their guest experience, and we should be able to accommodate other requests at the property level all the way through checkout.
HOTELS: What do you attribute the renewed strength of Hotel Indigo growth?
Kinsell: We experimented with a few locations and found that the strength of the brand is more urban and near urban, and less suburban. Over past few years, our distribution strategy has focused on more dense markets with a more intense cultural experience. We have looked more at the guest profile and what they want to experience when on property. Our beverage and food strategy has enhanced the guest experience and brands with a more refined B&F experience attain higher average rates. For owner, that flows more to the bottom line and helps support the rest of the investment.
We also launched Hotel Indigo globally and have been very successful. We have used the same neighborhood story and continue to be design led, but we are not being led by design for design sake, and that has been successful for the brand, as well.
Consumers have found Hotel Indigo more to their liking today than what it was when it launched 10 years ago. It developed out of that launch and now it is more of a branded boutique.
HOTELS: What’s new with IHG’s plan to re-launch Crowne Plaza?
Kinsell: We are going through a three-year re-launch. The first year we effectively pulled everyone together and developed the same version of the truth in terms of where we were, what was good and what was bad. What was bad needed to get fixed or needed to go out, and we are working through that. Then there was a set of enhancements we put through being put in place now, whether it be linen programs, fitness stations, or food and beverage elements.
Now, we are working with the owner community to find a longer-term vision for the use of public areas. We may be last to the party in terms of how the competition has addressed public areas, but we will learn from that. I don’t think some our competitors have done as well understanding this particular traveler who is traveling for success in their day is not defined by ‘I work and then I play.’ It is more, ‘I work, I play, I play, I work and work, and play.’ It is the flow of their day. The way we are thinking through public areas and use of meeting space will be more reflective of that style of how we live our lives on a daily basis. As we move toward our brand conference (in October), we expect to have more to define that.
HOTELS: IHG sold an 80% interest in the InterContinental New York Barclay, while retaining management. What can you tell us about the planned refurbishment?
Kinsell: We are committed to the refurbishment, dotting the Is and crossing the Ts on costs. We are working with the broader stakeholders such as the local community, contractors, unions, colleagues and guests, and expect to start construction in earnest by the end of the year, closing the hotel during the process.
One of the classic things about that hotel is the era in which it was built. We will update the hotel and bring back that style. It will have an updated nouveau heritage look and feel and will benefit from its original architecture and style. The bigger thing about positioning the hotel strategically in the market is that it is an H shaped building, and there are some inner areas there that allow us to come in and build out inside the building two ballrooms (5,000 sq. ft. and 3,000 sq. ft.). It helps support both meetings and groups business, but more importantly the social catering and banqueting important in the marketplace. That will be a big difference in how the facility will be utilized.
HOTELS: How do you feel about the state of business?
Kinsell: We feel very optimistic. The underlying performances have been showing that across the brands. If fact, that has been true across the world. There are some hot spots, but IHG also has some places performing very well to make up for that. Global economies where we are focusing are strong with developing business and opportunities for growth both in terms of new rooms, occupancy and rate.