Dive Brief:
- InterContinental Hotels Group will launch a new midscale brand aimed at conversions, CEO Elie Maalouf announced in a first-half earnings report on Tuesday.
- IHG reported that H1 2023 RevPAR was up 24% compared to the same period last year and has exceeded 2019 levels for four consecutive quarters. Also during the first half of 2023, IHG opened more than 21,000 rooms globally — 40% more than in the corresponding half last year — across 108 hotels, and signed 239 more into its pipeline.
- IHG’s as-yet-unnamed new midscale brand will increase the hotel company’s standing in the segment, which is worth $14 billion in the U.S. Openings for the brand will primarily be conversions, which Maalouf called “a major growth opportunity.”
Dive Insight:
Conversions, which accounted for approximately 40% of IHG’s openings and signings globally in the first half of the year, will play a key role in the development of IHG’s new midscale brand, Maalouf said in his first earnings call since becoming IHG Group’s CEO.
“We’re proud of our industry-leading position in upper midscale with Holiday Inn and Holiday Inn Express,” Maalouf said in a statement. “Our aim is that this new conversion brand will become the first choice for guests and owners in the midscale segment.”
Maalouf added that more than 100 hotels have already expressed “definitive interest” in the new brand.
Maalouf credited “buoyant” leisure travel demand and strengthening business and group travel for the company’s RevPAR improvements. Though the greatest RevPAR improvements came from Greater China, where H1 RevPAR was up 94% year on year in a reflection of easing travel restrictions, H1 RevPAR in the Americas region was also up 11% year on year.
Of IHG’s new signings in the first half of 2023, more than a quarter were across its six luxury lifestyle brands — a segment the company plans to grow in.
Maalouf noted that, in H1, IHG continued investments in its enterprise platform to drive results for guests and owners. The IHG One Rewards program, he said, saw enrollments jump by 60% since its launch a year ago.
Marriott has also deepened its footprint in the midscale segment this year. The company acquired the City Express brand portfolio from Hoteles City Express earlier this year, as well as announced a new midscale extended-stay brand in the U.S. Competitor Hilton, meanwhile, announced a lower-midscale extended-stay brand in May.
