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The franchise model allows for rapid expansion and scalability, which is particularly helpful for a market like China, where the demand for accommodations is high.

IHG Hotels & Resorts on Thursday announced the signing of 24 new hotel projects in Greater China during its inaugural owner roadshow of the year in Beijing.

The signings mark IHG’s expansion across diverse regions: Shanghai, Shenzhen, Nanjing, Kunming, Datong, Rizhao, and Ningde,

And they include multiple IHG brands, including Holiday Inn, and EVEN Hotels, but 19 of them are for the Holiday Inn Express brand.

There are over 500 opening and pipeline hotels across the Holiday Inn Express brand in China.

IHG’s Franchise Model

All projects signed at the roadshow will operate under the franchise model, which IHG said is a strategic approach to ensure balanced development and meet diverse stakeholder needs.

IHG had earlier implemented a “Franchise Plus” model tailored for the Greater China region – encompassing Mainland China, Hong Kong, Macau, and Taiwan.

This model involves comprehensive support from IHG, including the appointment of a General Manager, to guarantee adherence to brand standards, optimize support tools, and enhance operational efficiency.

Over the past seven years, IHG’s implementation of the franchise model in the Greater China region has propelled the group’s growth in the market, the release stated.

By the end of December 31, 2023, nearly 40% of IHG’s hotels operating across the region were running under the franchise model, with more than half of the hotels in the pipeline also adopting this model.

Hilton had also revealed its plan to extend its franchise model into the upscale full-service category in Greater China, with the inclusion of the DoubleTree by Hilton brand. By October 2023, the company had unveiled 19 new franchise projects across its Hilton Garden Inn and DoubleTree by Hilton brands.

Investors and Attractive Brands

IHG aims to introduce new room designs and cost structures for the Holiday Inn brand. This, the company, said would bolster the brand’s attractiveness to investors.

IHG showcases a diverse portfolio, featuring 12 of its 19 global brands within the Greater China market, with over 1,200 openings or projects currently in progress.

The Chinese hotel market is anticipated to reach $166 billion by 2028 and the market is dominated by mid-range hotels due to its wide appeal to business travelers and budget-conscious tourists.

At the owner roadshow, IHG provided insights into emerging investment trends within the hotel industry, particularly focusing on the upper midscale segment. This segment’s appeal lies in its cost-effectiveness, adaptability, and resonance with younger consumer demographics, according to Kent Sun, chief development officer of IHG Greater China.

Sun highlighted the government’s emphasis on tourism as a catalyst for economic recovery. Sun said this helps stimulate hotel investment and intensifies competition within the upper midscale segment.

Sun said investors are also increasingly focus on this segment: “Expanding upper midscale brands with IHG aligns with the market demand for quality offerings, highlighting the group’s strong competitive position in this sector.”

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Tags: asia monthly, budget hotels, china, hilton, holiday inn, holiday inn express, hospitality, ihg, shanghai

Photo credit: Holiday Inn Express Hangzhou Airport. IHG

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