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Another global hotel company is joining the increasingly crowded space of hoteliers trying to convince owners of existing hotels to take on a new brand flag.
IHG plans to debut its upscale Voco brand in the U.S. with hotel openings in New York City; St. Augustine, Florida; and Columbia, Missouri, by early 2021, the company announced Tuesday. IHG first launched Voco in 2018, but growth was concentrated in the UK, Europe, Australia, and the Middle East.
Its U.S. debut continues IHG’s growth strategy by negotiating a deal with the owner of an existing property to take on the Voco brand flag, a transaction known as a conversion. But the conversion field is getting crowded — especially in the upscale, lifestyle space.
Voco was launched as a conversion brand, and IHG remains committed to that growth strategy. Two-thirds of the 28-hotel Voco development pipeline are conversions. All three of the announced U.S. properties are conversions, including the 50-room Franklin Hotel in New York City and the 64-room historic Tiger Hotel by the University of Missouri.
IHG sees Voco appealing to both the leisure and business sectors and targets owners who want “the reassurance of a big brand with the informality and charm of a boutique hotel,” said Julienne Smith, IHG’s senior vice president of development in the Americas, during a press event Tuesday.
That brand thinking may sound familiar.
Choice Hotels leaders have repeatedly touted its upscale Ascend Hotel Collection soft brand as a key conversion vehicle for growth coming out of the pandemic. Hilton has its Curio Collection, and Marriott has the Autograph Collection.
Even smaller boutique hotel companies, like California-based Proper Hospitality, are jockeying into the conversion space for growth with brands like Hotel June.
Voco is meant to be a “soft brand with hard brand elements” that could lead to a relatively affordable conversion for hotel owners across a variety of property types, Smith said.
Existing Voco properties included converting the modern, 470-room Nassima Royal Hotel in Dubai as well as the Oxford Thames, a British hotel with some components dating back to the 15th Century.
“The brand is simply recognized through signage, uniform, collateral, amenities, and artwork — making it a brand that is simple to convert,” she added.
While IHG is open to new-build Voco projects, development leaders at the company recognize capital is hard to come by for a hotel project that wasn’t already off the ground before the pandemic tanked travel demand around the world.
Conversions — even affordable ones — still take money, something many existing hotel owners are tightly holding onto due to the uncertain demand environment. But Smith said there are still capital sources like PMZ Realty Capital and Peachtree Hotel Group subsidiary Stonehill Strategic Capital willing to invest in hotel rebranding or renovation projects.
“What we’re seeing is there is some capital available for existing assets,” Smith added. “We’re not seeing a ton of capital available for new development, particularly if that capital wasn’t already in place pre-Covid. But we do see opportunity.”
[UPDATE: Following publication, this story was updated to reflect IHG’s latest development pipeline numbers for Voco.]