Mid-market key to InterContinental growth in the Americas

8th Jul 2016
Mid-market key to InterContinental growth in the Americas

InterContinental Hotels Group has pointed to the booming “mainstream” sector as the key to its growth in the Americas.

Covering the mid-scale and upper-mid-scale segments, IHG chief executive Richard Solomons said the Holiday Inn and Staybridge Suites brands would be the pivotal to the group’s success in the region.

“Travellers coming from developing markets, where the volumes are, they will be in this mainstream market,” he explained.

“While the City of London and Wall Street tend to fixate on the upscale sector, the fact is most people are mid-market travellers.”

Solomons argued value for money would be the key driver when selecting where to stay, with IHG’s portfolio of brands well positioned to attract travellers to North America.

This applied to both business travel, where corporations are looking to make savings, and the leisure sector, where price was paramount, Solomons added.

IHG currently operates 22 per cent of the rooms in this category in the Americas and has 27 per cent of the pipeline of future hotels, illustrating its importance.

At the same time, InterContinental made 58 per cent of its gross revenue in the Americas last year, while 64 per cent of the group’s inventory is located in the region.

This equates to some 377,000 rooms spread over 3,427 hotels.

In an effort to maintain its position IHG has also removed 225,000 rooms from its portfolio since 2004, culling underperforming properties.

In the longer-term Solomons pointed to rising GDP, an aging demographic and concurrent rise in disposable income, and the globalisation of travel as positive factors for the growth of IHG in the Americas.

IHG chief executive for the Americas, Elie Maalouf, explained that while the Americas incorporated 22 countries, the group was focused on the United States, Canada and Mexico.

These three nations combined accounted for 96 per cent of IHG’s revenue in the region, he said.

Maalouf also pointed to the growing Holiday Inn Express, Holiday Inn Resort and Holiday Inn Vacation Club brands as significant developments for the company, expanding its portfolio in the mainstream sector.



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