Holiday Inn Is Fueling InterContinental Hotels’ Growth

In the global hotel industry, it’s all about lifestyle brands and boutique hotels, right?

Wrong. Or at least that’s not what’s taking place at the InterContinental Hotels Group, where the mid-market and 62-year-old Holiday Inn brand family is spearheading the chain’s growth.

Sure, IHG opened its first two EVEN properties, part of the new lifestyle wellness brand, in Norwalk, Connecticut, and Rockville, Maryland, in the first half of 2014.

And, in the first seven months of the year, IHG concluded nine signings for its locally oriented Hotel Indigo brand, with 56 properties now in the pipeline.

But the iconic, if somewhat stodgier Holiday Inn brand, coupled with brand-mate Holiday Inn Express, accounted for the opening of more 10,000 rooms in the first half of 2014 of the 17,297 rooms that IHG opened across its nine hotel brands.

IHG opened a total of 109 hotels during the first six months of the year, with Holiday Inn unveiling 42 properties and Holiday Inn Express welcoming another 40.

A Global Mid-Market Brand

IHG CEO Richard Solomons says the Holiday Inn brand family is “the only true global mid-market hotel brand,” and “more than double the size of its closest competitor.”

Speaking to analysts August 5 about IHG’s first half of 2014 results, Solomons said, “Holiday Inn continues its success and is IHG’s engine for growth as it has been for many years and will continue to be for many more.”

“Since 2010, the Holiday Inn brand family has grown its premium to the upper mid-scale segment to around 108%,” Solomons said.

In the Americas, Holiday Inn’s revenue per available room increased 7.3% to $74.63 at franchised properties in the second quarter while Holiday Inn Express’ comparable figures were a 6.5% growth rate to $79.16.

Moral of the story? Big chains need to adapt and lifestyle brands will play a larger role, but brands with solid value and reliability will pay the bills.

To be sure, IHG is doing its best from a marketing perspective to rejuvenate the Holiday Inn brand, and its Journey to Extraordinary Tumblr campaign is a case in point.