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The positivity at the annual IHG Americas Investment & Leadership Conference was palpable as high-level executives addressed the nearly 5,000 owners, general managers, and sales directors at the Orange County Convention Center in Orlando, Fla. With the theme of “Winning Together,” IHG executives such as CEO Richard Solomons and Kirk Kinsell, president, Americas highlighted the company’s recent successes and its plans for creating preferred brands by working closely with its owner and operator community to deliver strategic brand standards.
Although some uncertainty about the economy filtered into the presentations, they mainly focused on moving forward from the downturn that has plagued the industry in recent years. “Looking to the future, if I were a weather man, I’d be forecasting something like mostly sunny, but with a chance of heavy showers,” said Kinsell. “That outlook isn’t all that bad actually, but it isn’t all clear skies ahead, and it certainly isn’t as bleak as 2009.”
Kinsell referenced fluctuating oil prices, the high unemployment rate, and the unstableness of the eurozone as key factors that will still challenge the industry in the near future.
But the overall message centered on building preferred brands within the industry in order to grow market share. “We all know that customers will pay a premium for brands they love,” said Solomons. “We recognize that our brands have to be clearly defined, consistently delivered, and they must be supported by relevant brand standards. Preferred brands, delivered consistently, are the only way to maximize your return on investment.”
Larry Light, chief brands officer, emphasized the work that IHG was doing to restructure its brands and create new, well-defined standards for both hotel owners and guests. “Building brand preference is not an academic exercise,” he said. “It pays. It makes fundamental business sense. If you want to improve ROI, improve brand preference.”
Light recognized the variability within the IHG family of brands as a problem—one the company is committed to resolving. He mentioned that IHG has more variability, inconsistency, and uncertainty among its brands than its competitors. And Light stressed the importance of building and executing brand standards as the key strategy to improving guest understanding and loyalty.
“Brand standards are not suggestions,” he said. “If we do not consistently deliver on our promises, our brands lose trust. In a changing world, we need to have new standards. It is not an option, it is an imperative.”
Launching new brands will continue to be a part of IHG’s mission in the future. During the sessions, emphasis was placed on the newly launched EVEN Hotels and HUALUXE Hotels and Resorts. The company announced that it signed the first agreement for an EVEN hotel in New York City, a new-build, flagship property that will establish the health-and-wellness brand’s presence in the U.S. The property is scheduled to open in 2014.
“New brands allow us to keep up with consumer trends that are evolving,” said Jim Anhut, senior vice president, Americas brand management. “They energize everyone, not just in the corporate office. These new brands represent a huge role in our enterprise as a brand builder.”
IHG executives also took the opportunity to recognize its commitment to its current family of brands, putting emphasis on redefining the Crowne Plaza brand and making it more viable in the industry, especially on a global scale. Light also recognized the success of Staybridge Suites and Candlewood Suites. “Our extended stay brands do not get the appreciation that they rightfully deserve,” he said. “They lead our whole system worldwide in guest satisfaction. They are a benchmark in understanding their target audience.”
The leadership team also stressed the importance of working with its ownership community through the IHG Ownership Association to reach agreements and develop action plans for putting brand standards in place. To address the difficulties associated with building new hotels, IHG announced that it will now offer a 20-year licensing term for new-build properties in the U.S. and Canada. Conversion properties will retain 10-year licensing agreements.
“IHG’s relationship with the IHG Owners Association is our commitment to winning together,” Solomons told the audience. “This relationship has been critical to our success. None of us could have come through the worst of the recession as well as we did without this relationship.”
The changing landscape of the industry was also an overarching topic during the general sessions, and the executives on stage addressed the need to continue evolving in a world where social media and online reviews impact business and where increasing distribution channels continue to create customer segmentation.
“Today, the distribution landscape is dramatically different from even a few years ago,” said Laura Hernandez, vice president of distribution & relationship marketing, Americas. “Everything has changed—from how guests shop, to how they book their rooms, to how they give us feedback.”
“The world is changing, and we know it’s not getting any easier out there,” added Somons. “The way to deal with this changing world, the way to win, is to be big—to leverage what we have; to make sure we have the best possible brands and the right people to deliver the promise of those brands consistently.”
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