About six months have passed since Elie Maalouf became CEO of the Americas at InterContinental Hotels Group, and so far he’s visited more than 100 IHG-branded hotels, from Canada down to the tip of South America and everything in between. But today, Maalouf is at IHG’s regional headquarters in Atlanta, Ga., eager to discuss the company’s strong half-year results. Comparable revenue per available room increased 5.4 percent in the Americas, driven by rate growth of 4.2 percent. The company opened 96 hotels across the region (of which nearly half were Holiday Inn Express) and signed 166 hotels, an increase for the fifth year running. Maalouf didn’t discuss the recent market speculation that IHG is in merger talks with Starwood, or go into more detail about a localized issue in San Francisco, where seven Kimpton properties exited the IHG system this month due to union disputes. But he had plenty to say about IHG’s strong momentum, behind both its new and established brands.
What’s your reaction to IHG’s strong set of interim results? To be able to grow our RevPAR in the first half—5.4 percent in the Americas and 5.6 percent in the United States—and grow signings by 21,000 rooms (166 hotels) is really the result of a lot of hard work and of our consistent strategy of building strong brands, great relationships with owners, and strong commercial delivery systems. That’s our winning model we’re executing quarter in and quarter out.
How is the integration of Kimpton progressing? Since the acquisition, we have signed five new hotels, and we have opened five new hotels. We’re working closely together while still appreciating and preserving the unique character and culture of Kimpton that has been very successful since inception, bringing our strengths but maintaining their strengths.
What’s going on with Kimpton in San Francisco? It’s a local, specific one-time issue. We’re very optimistic about the growth and potential of Kimpton given the signings and openings we’ve had since the acquisition, and given the U.S. and global interest that Kimpton is now attracting since we’ve joined together. So we’re positive about the future and optimistic that our growth will continue. This will likely be the highest year of openings for Kimpton since the inception of the brand.
Hotel Indigo also appears to be doing well, with openings in two new geographic markets. The brand has 62 hotels open globally and 64 in the pipeline, with some really key properties around the world we’re opening and signing. Here in the U.S., the signing of the 350-room, 18-story Hotel Indigo in downtown L.A. with the Greenland Group from China is going to be a spectacular hotel. And in the fall, we will open a beautiful Hotel Indigo on the Lower East Side [in New York City]. So from coast to coast, we’re very pleased with the progress of Indigo. Between Indigo and Kimpton, we’re leading in the industry in the boutique segment.
What other results are you especially happy with? I’m pleased that when you look at our Holiday Inn brand family, we’ve had 500 openings in the last three years globally, and half our openings in the first half of this year were Holiday Inn Express. We already have over 30 Holiday Inns with the new open lobby concept, and we already have 42 Holiday Inn Expresses with the new Formula Blue design concept and 150 ready to execute. This is a very exciting transformation of the leading brand in its segment. I think that is confirmation of the strength of the brand and the attachment of the ownership community to it.
What are you looking forward to for the remainder of the year? We’re really building our strengths, and our brands are in a strong position, as evidenced by the signings and openings that we’re showing. Our guests are rewarding us with rate and occupancy increases, leading to successful RevPAR growth. Across our portfolio, from the Holiday Inn brand family to the success of Indigo and Kimpton, to our continued repositioning and growth of Crowne Plaza. With the InterContinental brand, there is over $2 billion being spent just in the U.S. on major hotels, from the renovation of the New York Barclay, to the new southwest waterfront hotel in Washington, DC., to the 900-room hotel in downtown Los Angeles that’s under construction right now, to the just completed renovation of the Chicago InterContinental. It’s continuing that momentum and success across our brand portfolio, making sure we’re delivering results to our owners and our key partners in our growth.
Aside from visiting more than 100 IHG hotels, what else did you do to get acclimated to the company? We have a large, strong, and loyal owner community, and I’ve met with many of our owners, from large institutional to entrepreneurial investors, families who have been investing in IHG hotel brands for generations, to deepen our partnership and get to know their experiences and their needs. We have a terrific, loyal, and hard working organization in many functions that I’ve spent a lot of time with. I’ve also spent time visiting competition to make sure we’re always leading and fresh in our offer. I’ve met with our industry associations, including AH&LA, to understand and position our industry and ourselves around the key issues. So there’s no lack of activity to get immersed in the business. But by now we’re at work, we’re past orientation, and we’re busy building great brands, great guest experiences, and great owner results. And I think you can see it in our half-year announcement.
