InterContinental Hotels Group hasn't been as acquisitive as some of its peers in recent years and it's clear that Chief Executive Richard Solomons doesn't intend to follow the crowd.
Since InterContinental Hotels Group (IHG) announced its deal to buy Kimpton Hotels & Restaurants it has stayed relatively quiet, while rivals such as Marriott International and AccorHotels have been pretty active in the market.
Speaking at Skift Forum Europe in London Tuesday, Chief Executive Richard Solomons said that IHG’s growth strategy was to only look to go into areas where the company had “white space,” pointing to Kimpton, in the boutique segment and wellness brand Even Hotels. IHG launched Even Hotels in 2012 and acquired Kimpton in 2015.
Solomons outlined one area in particular that could be explored in the future.
“We can see opportunity in the mid-market where Holiday Inn is very big but in some markets is saturated, and target something maybe to a slightly different customer. And there’s probably a few other gaps but right now we’ve got 1,500 hotels in the pipeline.”
He added: “I think our brands are very attractive so we’re not desperate to add new brands.”
Solomons also hinted at a difference in opinion over the direction some of his competitors are taking.
“It is interesting, if you go back three or four years, the big five as we then were — Starwood, Marriott, Hilton, Accor and us — had broadly similar strategies. I think we were better at some things obviously but broadly it was about focusing on the brand, and global growth. Since that time strategies have changed,” he said.
“I don’t really want to talk about their strategies — some I don’t understand, some I don’t necessarily agree with.”
He added: “For us we’re a hospitality business, not just hotels, we’re hospitality. We want to be great at that and we don’t want to be distracted into other businesses…”
We’re not at war with online travel agents
Solomons also dismissed the supposed conflict between hotel companies and online travel agents, saying that they were both simply routes to market for different customers.
“There’s a lot of talk about online travel agents and the big hotel companies. We launched Your Rate, which is a preferential rate for IHG Rewards Club members and the other hotel companies have gone on and done something similar and it’s being couched in some of the press and some of the stock broker analysts… as a battle and we don’t see it as a battle at all.
“We see it as different routes to market. What’s the most appropriate route to market for our customers and for the owners of our hotels? And the reality is generally intermediaries, particularly the big digital intermediaries, are very expensive. They’re expensive to access, so we only want to access them when they add value and generally again in our business online travel agencies are very good for price sensitive, non-brand or leisure travel, which we couldn’t target anyway.”
What Does the Future of Lodging Look Like?
Get the latest news about hotels and short-term rentals delivered to your inbox once a week.
Photo credit: InterContinental Hotels Group Chief Executive Richard Solomons (left), in conversation with Skift CEO Rafat Ali at Skift Forum Europe in London April 4, 2017. Russell Harper / Skift