As part of its strategy to become a pure-play hotel company, InterContinental Hotels and Resorts (IHG) recently sold off the majority of its European assets, returning the proceeds to its shareholders. Its focus is now geared towards hotel management, franchising and building the IHG brand globally through targeted growth.
Richard Hartman, Managing Director of Europe, Middle East and Africa, believes the group is on track to add 50-60,000 rooms to its portfolio by the end of 2008. He tells BTN how this can be achieved, whilst emphasising a triple bottom line approach:
BTN: How does IHG develop hotels responsibly?
Hartman: Last year we employed our first SVP Corporate Services and Corporate Responsibility, David Jerome, who is spearheading our activity in this area
We have also recently launched a new model Holiday Inn that is more cost efficient to both build and run offerings savings of some 30 percent and using fewer materials and thus having less of an impact on the environment both at building stage and the ongoing operation of the hotel.
BTN: You worked as CEO of IHG’s Asia operation and now Europe and the Middle East—what challenges have you seen for this region?
Hartman: Destinations such as Qatar are stepping up and making their mark on the global stage and InterConti is investing in cities including Doha and is committed to supporting them in their progression. Emerging markets include Kuwait and KSA, where IHG already has significant presence but is also increasing its room capacity throughout the next few years as confidence in the destinations grow.
There is a need for a wide variety of accommodation options for an increasingly discerning traveller. The emergence of globally recognised regional airlines such as Emirates has also boosted the tourism industry for the MENA region. The accessibility of destinations here is at an all time high. Equally the entrance of low-cost air carrier brands has brought with it a new type of visitor in both the leisure and business travel sectors. The main challenge in the MENA region, which reflects a global trend, is one relating to employment.
BTN: You’ve overseen the transition of over 100 owned or leased hotels to management and franchise contracts. How has this process gone for IHG?
Hartman: Our focus now is building our brands and continuing to have the most robust system delivery platform in the industry. We have researched the key elements of a world-class franchise business proposition and have built this into our investor offering. When you run a franchise model the key way to build your business is by growth and we have stated our target to add 50-60,000 rooms to our estate by the end of 2008 - I am glad to say we are on track to do this and our growth is matched by our customers’ confidence and belief in our brands.