IHG Owners Chair Offers Advice to New Franchisees

Kerry Ranson, 2015 chair of the IHG Owners Association, first joined InterContinental Hotels Group in 1999 as an area director. Though he left the company to join the startup team of HP Hotels in 2002, he remained an active regional committee member who advanced to become an executive member of the association’s board. Now, as president and COO of Expotel Hospitality Services, Ranson continues to lend his expertise as an owner and operator.

What led you to the hotel industry? I was on my way to law school, and a buddy of mine asked if I wanted to go into business. We had both been in the restaurant industry, so we started our own private label microbrew beer business. While that was fun and great, I was probably too young to take on the responsibility and I got nervous. So I cashed out on that and went to work for the Ruby Tuesday restaurant chain. From there, I got an offer to work with Steve Wynn and Mirage as part of the opening team at the Beau Rivage Resort in Biloxi, Miss., so that ushered me to the hotel side of the hospitality business.

Why did you get involved with the IHG Owners Association? As a franchisee it’s worth it because when you’re involved with the Association, you’re directly enhancing the value of your asset. Because we’re so deeply involved, as new things come out down the road, we are able to provide counsel on whether something works or doesn’t work from the point of view of an actual owner versus someone reinventing the wheel from an ivory tower.

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What IHG brands does Expotel have experience with? The sweet spot for me has been the Holiday Inn and Express brands and the Crowne Plazas we’ve done in the right markets at the right times over the years. We currently have a Crowne Plaza in Milwaukee, and we’re building a Holiday Inn at the New Orleans airport.

What advice would you offer a first-time franchisee? For the type of asset you’re building, consider whether there is a platform built to support the income you would need to make on the consumer using the brand. If a stay at a particular brand or franchise has an average rate of $80, but I need an average of $110 a night to get a decent internal rate of return, well I know doggone good and well that I can’t put that franchise flag on my asset and expect to actually succeed.

How important is it to collaborate with the brands? Whether it’s IHG, Hilton, Starwood, or Marriott, if you’re going to purchase a franchise, you have to work with the brands. If I’m paying franchise fees, then we better be taking advantage of the systems out there. You can’t just turn the reservation system on and expect them to do all work for you. You’d better intimately know the tools that are at your disposal and you’d better be using them. The only way to do that is to be in direct communication with those brands.