Dive Brief:
- As teased by CEO Elie Maalouf during the company’s Q2 earnings call, IHG Hotels & Resorts today launched Garner, a new midscale conversion brand, designed to provide guests with an affordable, amenity-rich option and owners with higher returns.
- Catering to “value-driven travelers,” Garner hotels will give “owners and guests what they’ve been missing in the midscale space,” IHG SVP of Global Marketing Mainstream Brands Jen Gribble said in the brand announcement. The hotels will include flexible lobby designs with digital check-ins and a 24/7 front desk team, all-day snack availability in the Garner Shop and complimentary hot breakfast services at an affordable price point.
- Garner is the result of owners’ expressed desire to work with a high-quality conversion brand at a lower price point, especially in the midscale segment, which in the U.S. represents a $14 billion market today, IHG’s release detailed.
Dive Insight:
Garner will provide a development alternative in the midscale space, compared to IHG’s new-build midscale brand, Avid Hotels. Additionally, Garner will offer a lower conversion cost per key for owners than IHG’s upper midscale brand Holiday Inn Express.
IHG developed Garner based on direct feedback and insight from owners. The new midscale brand will provide owners with access to IHG’s global sales organization, as well as low-cost distribution systems and lower procurement costs, according to the company.
“We have already received more than 100 definitive expressions of interest in Garner, which demonstrates the strong potential in the segment,” Maalouf said in a statement.
Garner will be ready to franchise in the U.S. by early September, and IHG will work with owners at each property site to evaluate the level of renovation required. The first brand hotels are expected to open by year-end.
IHG plans to expand the brand globally, opening 500 hotels over the next 10 years and 1,000 hotels over the next 20 years in the U.S. alone. Expansion plans for the midscale brand come on the heels of significant growth for the segment, which is set to grow to $18 billion by 2030, according to IHG.
IHG is expanding across other brands as well. In the first half of this year, the company opened more than 21,000 rooms globally, up 40% year over year, across 108 hotels. IHG also signed 239 hotels into its pipeline in H1, according to a company earnings report.
Marriott International is similarly capitalizing on the growing midscale segment. In June, the company entered the U.S. midscale segment with an extended stay brand, similarly designed with owners in mind, to provide a cost-effective build option. Last week, Marriott announced the official name of the new midscale brand, StudioRes.
