InterContinental Hotels Group plans to add another all-suite hotel brand to its portfolio later this year as it looks to take advantage of increasing guest and owner demand for those accommodations.
IHG already has the Staybridge and Candlewood Suites brands in what it calls the mainstream segment but CEO Keith Barr clearly feels there is room for another.
On an earnings call with analysts on Tuesday, Barr used language synonymous with the alternative accommodation sector in describing where the new brand will sit.
“The all-suite segment of the Americas upper midscale market has grown in scale by around 70 percent over the last four years, which speaks for itself in terms of the clear demand from both guests and owners,” he said.
“Appealing to travelers looking for a design-led, authentic experience on what are typically longer stays than your normal transient guests, we estimate there to be an $18 billion pool of guests in this segment.
The as yet un-named brand will sit at a price point below Staybridge Suites in the upper midscale range and will mainly focus on new builds.
Under Barr, IHG has launched new brands Avid and Voco. It has also expanded its presence in the luxury sector buying a 51 percent stake in Regent Hotels and last week announcing a deal to buy Six Senses.
However, it looks like the Six Senses acquisition, will mark the end of the shopping spree.
“If something else came up, and it was a very, very attractive and it was very small, then we’d probably evaluate it. But I think it’s relatively unlikely in the very short term,” Barr told analysts.
IHG saw its annual pre-tax profit fall 26 percent to $485 million. The drop came about largely because of a $146 million deficit in its System Fund, which manages spend on marketing, loyalty and technology with IHG splashing out more than the previous year.
The company also incurred $104 million worth of “exceptional” charges, compared with a gain of $4 million last year. This number included an $18 million litigation cost for a lawsuit filed against IHG in the Americas region; and $56 million in reoganization costs, which included $25 million in consultancy fees and severance costs totaling $18 million.
Total revenue increased 6.4 percent to $4.3 billion.
Global revPAR — a key hotel industry metric — increased 2.5 percent during the year and analysts at investment firm Exane BNP Paribas called the performance “reassuringly solid.”
Shares in IHG were up slightly following the release of the results.